They say only two things are certain in life: death and taxes. For a lot of people, there is also a third: the pain of keeping track of every receipt for tax purposes.
How many times has your bookkeeper, accountant or finance manager asked you for a receipt and you have had to scramble to find it or have needed go back to the supplier to get a copy, even though you swore you’d put it somewhere safely.
Do you ever think to yourself: “I’ve got better things to do than this”? You are probably right! Receipt tracking and paperwork is a waste of your time, time that you could otherwise be investing in the growth of your business or doing the things in life that you enjoy.
Thankfully there are now some cool software programs and apps that can take the pain out of tracking your receipts. And live bank feeds can take care of the rest.
The backbone of cloud accounting is the functionality of the live ‘bank feed’, where your bank transactions are automatically imported into your software daily. This eliminates most of the tedious data entry associated with traditional bookkeeping.
Keeping on top of the books can be hard and time consuming. But what is even harder is making good business decisions without real-time and accurate financials. If you want real-time financials, you need a real-time (cloud-based) accounting package such as Xero.
We need to be realistic about the efficiency gains of using cloud technology. Although your bank transactions can be automatically imported into Xero or a similar program, your financial data can still be inaccurate for two reasons:
- Bookkeeping errors: errors in matching your bank transactions correctly to bills, invoices etc. or incorrect coding of GST. Making a systematic error with your account and/or tax coding can quickly throw your financials out of whack, as can incorrect treatment of transactions. Learning the bookkeeping basics goes a long way. Take the time to get the right training or ask your accountant for help.
- No documentation: By law you are required to keep proper written evidence for business expenses that are deducted from your taxable profit. Keeping these source documents within your accounting software means all your information is in one place and is easily accessible. However, it is incredibly time-consuming to scan each individual receipt and then attach it to the respective transaction.
Receipt-keeping add-on apps such as Dext (formerly known as Receiptbank) can help by automatically pushing your receipts through to Xero, where they can be matched to the correct transaction.
Bookkeeping on cruise control
If you have ever been on a long road trip, you know how helpful it is to switch on cruise control so you can worry less about maintaining the right speed and focus more on steering the vehicle. Using a live software package, coupled with a receipt-keeping app, is the cruise control of your accounting toolbox!
The core benefit of using a receipt-keeping app is that you can ditch the scanner and forget about manually dragging and dropping your receipts in to your accounting software.
The top two reasons for using a receipt-keeping add-on are:
- Your receipts are read by an intelligent machine (and often double-checked by a human) and the information is recognised via optical character recognition (OCR). This means you must enter a lot less of the data in your receipts (ie date, amount, tax invoice number etc.)
- The receipt-keeping add-on is automated to learn ‘rules of thumb’ for allocating your expenses to their corresponding expenses categories. For example, you can teach the app to allocate every digital receipt for Google to your computer expenses account category.
If you are falling asleep behind the bookkeeping wheel because of boring manual data entry, it’s time we had a chat about how paperless receipt-keeping solution can shift you into cruise control.
Get in touch so we can chat about your receipt handling systems. If we catch up over a coffee, it’ll be our shout (and we will scan the receipt!)