Small businesses spend hours upon hours organizing their receipts. Here we’ll talk about how digitalizing receipts can reduce your workload while keeping you on good terms with the taxman.
Take a picture
Today, it is easy to find a scanner. Wait, you can find a lot better than a simple scanner! Why not use your mobile phone to take a picture of your receipt? Just don’t forget to take a picture of the back whenever there is relevant information such as terms and conditions.
Here at Keepek we are developing a mobile application that will do the entire job for you. The basic idea is that you snap a picture of your receipt, and then we do the heavy lifting for you. If you want to be included in our beta list just drop us an email at firstname.lastname@example.org with the subject “beta user for android application”.
Discard your paper copies
Once you’ve taken a picture of your receipt, you can get rid of your paper copies. The taxman will accept that in most cases. The HMRC says “records may be preserved on optical imaging systems, and the originals discarded, provided that what is retained in digital form represents a complete and unaltered image of the underlying paper document. “
What is life without exceptions? There are certain records that you must keep in their original form. These include:
- Dividend vouchers
- Bank interest certificates
- Construction Industry Scheme (CIS) vouchers – (these vouchers were used before the current scheme was introduced in April 2007)
Building a storing system for your digital receipts, and expenses in general, is necessary. You can store them by date, by employee, by business trip, and/or by category. For instance, you can create yearly folders, then monthly subfolders, then save receipts in each subfolders by business trip or by category.
This simple file system can work as long as you have a limited number of receipts. When you start getting hundreds of them, things get complicated. Keepek is built to tackle this exact issue. The platform allows you to process and then sort thousands of receipts by date, supplier, employee, category, and/or report. You can even use your own tags. Another benefit is that you can allow a third party such as your accountant to remotely check your records.
Backups are your friends
Often new business owners are surprised to learn that they have to keep records of their receipts and invoices for many years. As a consequence, a robust back-up system is needed. Obviously, you can’t rely only on your laptop because it may not last that much. The HMRC says”You don’t need to keep the vast majority of your records in their original form. If you prefer, you can keep a copy of most of them in an alternative format. For example: scanned PDF, files saved on a CD-ROM , and files saved on an optical imaging system.“
Well, you get the point. Scan or snap pictures of your receipts, use a sorting system, and don’t forget backups. Alternatively, you can try an online expense management system.