3 Smarter Ways to Save Receipts and Your Sanity

paperless Jun 07, 2019

Has this ever happened to you? You purchase something for your business, and you have no idea what to do with the receipt. So you collect them. Or you toss them.

Have you ever thought about how many receipts you receive in a week, a month, a year? They are annoying, take up space in our wallet, file folders, or the dreaded receipts box. Alternatively, many of them collect in our email.

 

Receipts are important to keep, however, the IRS does not require them. However, if you face an audit, you will need to prove the expense. The easiest way to justify an expense is with the actual receipt.

Yes, It's Annoying

Why It's Important to Save Receipts

Saving receipts can be a pain, yes, I know. However, if you have a system and a process, you can save a receipt in about 15 seconds. But why should you save receipts in the first place?

Have you ever approached tax time, scrambling to update your bookkeeping software? Did you have questions about expenses and what they were for? Could you find the receipt for reference? Was it easy to find?

Did your tax accountant ask for receipts and you couldn’t find them, or you deleted or tossed them? Wow them next year when you send them a zip file of all the receipts they need that only took you 5 minutes to gather!

Go Digital!

You can save your receipts and be paperless. Having receipts filed away in a digital folder makes it so much faster to find the receipt for reference when you are updating your accounting software.

If you need to return an item you purchased to a store the receipt is often required. I’ve had cases where I needed the order number from the receipt to be able to return something I ordered online. Moreover, the receipt will tell you when you bought the item and if it is in the return window.

Another reason to keep a digital copy of your receipts, an audit. Did I hear you suck in your breath, did your stomach do a flip flop? An audit is nothing to be afraid of unless you are hiding money or your bookkeeping is a hot mess.

In an audit, you will need to prove you made the expense you deducted on your taxes. The simplest way is to have a digital copy of the receipt. That is all you need.

You can use a bank statement; however, that means the auditor gets to see everything on the statement, you can’t black out other charges. This is not my preferred method of tracking expenses. Also, do you keep all your statements?

When it comes to saving your receipts, my number one recommendation is to save them all digitally. The IRS does not need to see a physical receipt. So goodbye box of jumbled paper receipts!

You may be thinking, but I have all my receipts saved in my email. How about the paper receipts? And do you want to leave it to chance that you will be able to find the receipt you need? I never keep receipts in my email. I’ve had too many emails disappear.

Setup Your System

Step One: Setup your digital files

I use Dropbox for all my files. You can also use Google Drive. I DO NOT recommend saving anything directly to your computer. Dropbox syncs to my computer so I always have the files I need and they are backed up in the cloud automatically.

All you need to do is create a folder called Receipts 20XX. It’s that simple. Each year I add another folder with the year. Because I have so many year’s worths I have a parent folder called “Receipts” and all the years under that.

Here is my file structure.

 

Step Two: Decide on a naming convention

My days in corporate accounting have seared this one into my brain. By having a naming convention that you stick with, it will make finding receipts so much easier. Just like saving them all to the same place.

The naming convention I use for receipts is as follows: date (YRMODY) / Vendor Name / Invoice # (optional) / $Amount. Here is an example of one of my receipts: 190220 Canva $12.95.pdf. 19 = 2019, 02 = February, 20 = the 20th of the month. The beauty of this is that your receipts are in date order.

I’ve been through almost a dozen corporate audits (the kind required by law of a public company). Since the IRS no longer requires paper as a backup, I learned very quickly how a good naming convention allows you to find what you need rapidly.

How to Save Receipts

There are many ways you can save receipts to make it fast and easy! To save receipts you need a place to house them. The tools you can use are Dropbox or Google Drive, your phone or a desktop scanner.

You don’t have to buy any equipment to save your receipts digitally.

When you have a receipt in your email, all you have to do is save the email as a .pdf. Easy peasy.

MacMail:
Select the email you want to save, click File -> Export as PDF. You can choose to save your file in Dropbox or Google Drive. This will require you to go into either program and move the saved receipt to the Receipts folder. I often do this about once a week. If there is more than once receipt I can move them all at once.

Gmail:
Open the email, click on the printer icon in the top right corner. When the window opens, change the destination from your printer to Save as PDF. Just like in MacMail, you will need to move the saved file to the Receipts folder.

Don’t keep your receipts in your email! Emails disappear and accidentally get deleted. Do you want to search through hundreds (or thousands) of emails to find the right one?

How to Save Paper Receipts

You went to a coffee shop to work or bought some office supplies at Target. Isn’t the natural reflex to immediately toss the receipt? Don’t! You can quickly capture the receipt and save it, and then you can toss it.

Your cell phone has everything you need to save paper receipts. All you need is the Dropbox or Google Drive app, or use your phone's camera.

Dropbox:

  • Open the app click on the + Create at the bottom of your screen (it’s in the middle).
  • Select Take Photo
  • Snap your picture and check Use Photo
  • In File Name rename the file
  • Upload To and select Choose a Different Folder
    Search until you find the Receipts folder and select Set Location
  • Then you will be back to the Save Settings screen and select Save in the top right corner.
  • The great thing is that the next time you snap a picture of a receipt, Dropbox will remember the folder you last selected.

Google Drive:

  • Open the app and select the + in the bottom right corner.
  • In the new window select Use Camera
  • Snap a picture of your receipt and select Use Photo
  • The app will process the image then a black bar at the bottom of the screen will say Locate, click on the Locate, it will be in blue
  • You should see your image in the list of files
  • Click on the 3 dots on the right side
  • Scroll down to Move and click it
  • Select My Drive and scroll until you find the Receipts folder and click it
  • At the bottom right of your screen select MOVE HERE
  • Your new receipt image is save

Google Drive has more steps than Dropbox, but if this is your file storage system of choice, then it is worth it.

The Camera on Your Phone

The third way to save paper receipts is with your phone camera. I can only speak to the iPhone way of doing this, sorry Android users.

  • Snap your photo of the receipt.
  • In Photos, select the photo you want to move and, in the bottom, left corner choose the Send To icon (box with the up arrow).
  • Select either Dropbox or Google Drive. You may have to enable them. Scroll to the right, click on the three dots and enable the app.
  • Once you’ve done the step above, the following steps are almost identical to the ones above for each app.

Another app you can use is Genius Scan. This is great because it will straighten out the paper and take a great image. You can connect Dropbox and Google Drive to the app to save there.

Saving your receipts doesn’t need to be complicated. Decide where you want to keep all your receipts and how you will name them. Sticking with one method means it will become second nature and will take very little of your time.

Remember, pick a system that simplifies your life, you will use and keep up with. Going paperless with your receipts is a quick and easy way to start simplifying your business and life! 

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