by Maria Lahiffe
Do you keep your receipts in a shoebox? Managing your financial records is a bit like a trip to the dentist… few people enjoy it, but it is really important, especially around tax time or if you get audited. Here are some tips to do it right.
Even if it is for a couple of stamps, get a receipt. You’d be surprised how quickly little expenses can add up. Also, always look at your receipts as you get them. Sometimes a receipt doesn’t print out properly, or some information may be missing. Fill in the missing information BEFORE you leave the merchant.
Use your smartphone to take a picture of each receipt as you get it. That way, if it gets lost, you have a backup. Also, as you’ll learn later, there are services which will organize your receipts for you (for a fee), who can work with photos of receipts.
Keep on top of the Canada Revenue Agency’s requirements for document storage, which change every few years. Here is the most recent version at the time or writing this post. This version is dated 3 Jan 2017.
Don’t just throw everything into a shoebox! Set up a system of accounts, even if it is just a few account categories to start. Here is a good list to get you started. Set up an accordion file on your desk with headings for each separate account, then put in the receipts as you get them.
If you’re really, really bad at filing your receipts, consider outsourcing that function. Maybe hire a part-time bookkeeper or else use a service like shoeboxed.com to do your organizing for you.
A bookkeeper costs money, but good record-keeping is actually cost-effective in the long run. On the proactive side, it gives you an understanding of how you are spending your money, which your board and your funders want to know. On the reactive side, audit fees are very expensive, if you every get caught with your books not up-to-date.
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