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Don’t Forget Those Cash Receipts!

Do you buy business items with your own non-business funds i.e. your cash? Do you include these purchases in your accounts? Surprisingly, some of our clients don’t think that they can or should include cash receipts in their books. This is not the case!

The point of this post is to alert clients (or those of you processing your own books) to the fact that you need to keep all of your receipts for items purchased via your own funds. Remember by “cash” I mean any personal funds so these can be cash, personal credit card, personal savings/cheque account etc.

Okay so you’ve got a heap of these sorts of receipts – what’s the best way to handle them? Here are my 5 steps to getting organised with cash receipts:

  1. Empty your wallet or bag of all receipts every week and keep them in an easily remembered and accessible place.
  1. Make a time during the week or before your hand over your data to your bookkeeper, to go through these receipts. Organise the receipts into these groups: “Credit Card”, “Cheque Account”, “Savings Account” and “Cash”.
  2. Scour each receipt for items you believe are business-related and mark them with a highlighter pen. Make notes next items which require special attention especially if you think the bookkeeper needs to be made aware of special circumstances regarding particular transactions. Mark items that you think might be business-related but aren’t sure if they are – your bookkeeper will be able to assist you with these items and you never know, an item that you thought would not be tax deductible, just may well be!
  3. Attach each group of receipts to their respective bank statement/s to make the bookkeeping process easier.
  4. Gather the “cash” receipts together and place in an envelope and mark the envelope “Cash Purchases”. This will alert the bookkeeper to the fact that these receipts are not connected to any bank statement you may provide.

So don’t forget your cash receipts people! Not only do they help to paint the picture of your business “story” but they often include items which are tax deductible, there-by helping to reduce your overall tax debt. Also, if you are registered for GST, then they assist in reducing your BAS liability – every little bit helps! It’s so easy to forget those receipts swimming around in the bottom of your bag or squished into the corner of your wallet! Try utilising my tips above and see if you can’t just get a little bit more organised! Remember, good record keeping will make your bookkeeper’s job easier which in turn will save you dollars on bookkeeping fees!

  • Good post Louise.

    I always try to ensure I take receipts straight out of my purse and put in the inbox in my office – although I have found a few straggler tucked away in my bag. It certainly is amazing how much a few dollars here and there adds up to!

  • I do too Bridie. I hate getting them out of my husband’s wallet though – my goodness so many! How does he fit the thing into his back pocket? Lol!

  • Hi Louise,
    Good tips for staying organized. Amazing how fast the ink on the receipts fades if they stay in the wallet long!

    • Thanks Chris. That’s true – they do fade. Apparently we are supposed to take photocopies of these receipts and keep the photocopies as they don’t fade at the same rate. Alternatively, we can scan the receipts and keep electronic copies. This is a lot of work and I’m not sure how many people can be bothered to do it!

  • Hi guys, of course we’re going to say we can help here. Just sign up to our Magic Envelope service, shove those pesky bits of paper in the envelope, seal and send and we’ll do the rest. Integrate with all the usual suspects in terms of accounting packages. More info on https://www.shoeboxed.com.au/how-it-works/ or give us a call 1300 00 1333. Have a great weekend – do NOT spend it sorting receipts … we will 🙂