How to keep track of receipts for a business

It’s smart to always stay organised when you’re running a business. You should keep records of pretty much everything, because you never know what you’re going to need. That means tracking sales, invoices, expenses, and keeping track of your receipts. 

We’ll focus on tracking receipts in this article and provide you with some handy tips on how to organise your receipts. We’ll also look at how Countingup can help you keep track of them. The topics we’ll be covering include:

• Identifying your receipts
• Categorising receipts
• Why tracking receipts is important
• The benefits of keeping digital receipts
• Tracking receipts with Countingup

The first step in keeping track of your receipts is making sure that the document you have is actually a receipt. Although this might sound simple, running a business involves a considerable amount of paperwork. So when a lot of that paperwork is digital, it’s easy to get confused about which document is which. 

One of the common mistakes is not knowing the difference between receipts and invoices. The key thing to remember is that you’ll receive an invoice before you pay anything, but you’ll only get a receipt after you pay. Think of invoices as a request for money, and a receipt as a confirmation of that payment. 

If you know that you’ve got receipts, but you’re having trouble identifying where they’re from, take a look at your other financial records. For example, if you have anything that shows your company cash flow — the movement of money into and out of your business — you can use this as a list of business-related purchases. Those purchases will match specific receipts, and you can organise them using the cash total or dates provided.

Once you identify your receipts, you should organise them further by separating them into categories. These categories can be anything you choose, but in accountancy, the standard way of organising business expenses is to use these four categories:

• Operating expenses
• Non-operating expenses
• Capital expenses
• Cost of goods sold

Operating expenses are any regular payments or purchases that you must make to keep your business running. It’s important not to include any purchases related to your products in this category. Although they’re a necessary part of your business, you should categorise them as part of the cost of goods sold. 

When you receive a receipt for any kind of rent or utility bill, mark it as part of your operating expenses. Other examples that belong in this category include receipts for equipment repair and office supplies.

Any payment or purchases you don’t need to make regularly for your business is a non-operating expense. Receipts for these expenses can vary quite a lot. For example, say you’re relocating your business by moving into a new property. Every receipt related to that move would be a non-operating expense, from the price of renovations to the new property to the cost of moving your equipment out of the old building. 

A capital expense is any purchase you make for your business that’s a long-term investment, such as purchasing expensive equipment or a business-related property. A receipt for a capital expense might need to be kept for a long time, as your equipment will be used in the business for several years.

This may be the biggest category if you have a business that sells products. Any receipt from a purchase relating to your products goes into this category, so everything from purchasing raw materials to make items,  or the cost of renewing stock.

Bookkeeping is important to any business, and it’s essentially just recording where money is spent and where it comes from and receipts help you keep track of these movements. 

Tracking, organising, and categorising your receipts is especially important when you’re filing taxes, as you can save money by claiming purchases as business expenses. 

For example, say that your business makes £50,000 in revenue in a year, and you claim £10,000 in business expenses. You’d only have to pay taxes on the remaining £40,000 profit, which significantly reduces your tax bill. Keeping track of your receipts is one of the best ways of totalling up how much you can claim back as expenses. 

Finally, keeping receipts is important in case the government audits your business. The government does this to check if you’re paying the correct amount of tax, and it involves examining your accounts for any mistakes. 

You should try to avoid audits, but if you can’t, you’ll need to prove that you really did spend £10,000 on business-related purchases. Having your receipts available as proof will help protect your business and your finances in this situation.

Countingup, the two in one business account and accounting app, is one of the best ways to track your receipts because it uses a receipt capture tool. This feature allows you to take a photo of a paper receipt which you can then store with all your other financial records, in case you need to examine the details of that expense in future.

The tool also sends receipt capture reminders when you complete a purchase with a Countingup business account card, so that you never forget to photograph and digitise your receipts.

Countingup’s business current account offers built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Click here to start your three-month free trial today.