Is it just me that’s fed up with being asked in shops if I want a receipt?
I am loving the ability to pay in a retail outlet contactless with my debit or credit card but I’m not sure why now we are always asked if we want a receipt rather than just being given one automatically. Surely we still want proof of purchase if we need to take it back or simply to prove that we haven’t left the store without paying. If we are business owners then we must have those receipts to show these are justifiable business expenditure and if we are VAT registered then we need a VAT receipt to show the HMRC that we can claim the VAT back on those purchases.
Anyway, rant over. As bookkeepers, we work with many business owners and we know that keeping track of those receipts can be a pain or inconvenience. Sometimes receipts get left in pockets, wallets, vehicles or in a pile on the desk or stuffed in a draw or simply go missing. Then when doing their own bookkeeping or are being asked for these by their bookkeeper, it can then be difficult to locate them.
In this blog, I wanted to cover some of the ways which business owners can keep a better track of those receipts and save time and money. How much time do you spend in your business looking for receipts? If you are VAT registered, if you aren’t keeping a track of these receipts then you are quite simply losing money because you aren’t able to claim the VAT back without these. So it’s really worth putting into place a simple process for this in your business.
Make sure that if you are making a business purchase that you do request a receipt when you are making your purchase. If you are VAT registered – make sure that this is a VAT receipt which shows the VAT registration number and the breakdown of the VAT which can be claimed. We find many business owners will get a receipt but it may just be the credit card receipt and doesn’t show what has been bought or the VAT information needed.
If you are making a purchase online, you need to apply the same approach. Check that the receipt or invoice is providing the information that is needed for your bookkeeping. There are some retailers where you specifically need to press a button to request a receipt or invoice.
If you are in a retail outlet and they ask you if you would like the receipt emailed to you then that’s great – do say yes to this but I would also make sure you leave that outlet with a receipt anyway. If you don’t then actually receive that email with the receipt on then at least you still have the receipt you took with you and you haven’t got to waste time going back to them for it.
It’s just a case of remembering to do this when making a business purchase which I appreciate can be a challenge sometimes if you are in a hurry.
If you are out and about collecting receipts during your working week, try and keep them all in one place rather than several places as this will save you loads of time having to look for them. It may be you have a folder which you keep in your vehicle or office which you can keep them in so they don’t get lost.
If you know that you are not good at this, have someone either in your business or at home, that routinely asks you to produce these receipts on a weekly basis and to empty your pockets, wallets, vehicle so that they can locate them in one central place for you.
If you have receipts from purchases you have made online, you may also decide to print these as you make the purchase and simply add these to your folder.
Talk to your bookkeeper or accountant about using a Receipt scanning app on your phone. There are lots now on the market that you can use and this means that as soon as you have made your purchase, you simply take a picture of the document using the mobile app on your phone or tablet and that way you know it has been dealt with and that you have captured the information.
With some of these apps, the receipts will go into a software which will extract key pieces of information from the receipt and this information can then be published in your bookkeeping software. This is a massive time saving in the bookkeeping time needing to be spent. An example of this is a software which we know well which is called Receiptbank.
Other apps will allow you to send the information straight into your accounting software. For example, if you have Xero software, they have an app which you can use to scan the receipt and it will go directly in.
These apps will also help you with purchases that you make online. You can simply email these to your software as soon as you’ve made the purchase.
Not only does this approach allow you not to lose track of your receipts, but when then processed in your accounting software, a picture of your receipt will also be attached to the relevant transactions in your accounting software so that you know where to find them and so that you can show the evidence to the HMRC should you need to that it is a justifiable business purchase and that VAT was appropriately claimed.
These are easy to set up and can really save you time.
If you know that you aren’t currently good at handling receipts in your business, I urge you to make a change and adopt some of the approaches talked abous above. It really will save you both time and money.
If you would like some help with this or to talk about how you can improve how you handle your receipts or bookkeeping processes, please don’t hesitate to get in touch for a free and no obligation chat about how you can make this a whole lot easier for yourself. Please contact firstname.lastname@example.org or Tel: 01462 455455.