Keeping receipts for 4 years….HOW??
Do you at times feel like you are drowning in paperwork?
Do you have folders and in trays and filing cabinets filled with receipts, invoices, bills, statements…..or a combination of all of those?
So what if I told you to rewind to 4 years ago and find me a receipt to prove a purchase…could you do it? And if you could do it how long would it take you?
Now those questions are not designed to stress you out (so calm down….breathe). But this is what the ATO can do…come knocking at any time and perform an audit on your business information.
So I want you to start thinking about your systems for your paperwork so that if you ever are subject to an audit – the process is streamlined, quick, efficient – and you pass with flying colors.
Need some help with your systems – this is what we love so book a strategy session now.
Here are some of my tips that you can start to think about immediately
- Paper fades…and it fades quickly. Some smaller receipts (think petrol receipts, officeworks receipts, supermarket receipts) fade generally within 3-6 months. And the ATO want you to keep receipts for a minimum of 4 years. Well those numbers just don’t add up now do they? My advice – keeping just a paper copy won’t suffice. In 4 years time the receipts will be illegible and the ATO can deny those claims. Don’t risk it.
- Photocopying receipts is an option. But lets be honest – it is not a great option. Firstly – it is time consuming. Somebody has to physically copy the receipts and save them somewhere – in a manner that will enable you to be able to find them at a later stage. If you store them in folders – 4 years worth can soon add up so you then have storage space issues as well. This may be an option when you first start operating, but it won’t last long before you outgrow this system.
- Scanning. Most printers now have an inbuilt scanning function – so even if you work from home this could be an option. However, like the photocopying issue above – someone still has to put the receipts in the scanner and choose to save them on your hard drive or external drive. This means naming the files in a consistent manner so that anyone in the business can find them if they require.
- External Scanning Company. There are various add on programs that can do the scanning for you. Companies like Receipt-bank or Shoeboxed. You can send or email or upload receipts to these programs and they do the scanning for you. Depending on your accounting system – they can even link and transfer the transactions across. Used properly, these systems can really streamline the paper for you – and are completely ATO compliant.
- Accounting System functionality. Many cloud based accounting systems are now providing the functionality to attach copies of receipts/invoices to the transactions. Depending on your software, there are limits to file types and file sizes – but it could be an interim solution to free you from the piles of paper taking over your desk.
So I just wanted to let you know there are options….and lots of them.
The trick is to work out what is best for you, best for your business, best for your staff to handle and manage.
Whatever system you choose – it should streamline your paper, be ATO compliant and be easy for every staff member to adhere to.