Master the Mess – Managing Tax Receipts

It’s a scene that’s played out in millions of Australian homes and small businesses every year post June 30. Joe or Joanna Citizen, realises he or she may be eligible to claim thousands of dollars in expenses back from the taxman, but only if they have receipts.

Tax Receipts

Cue frantic searching through desk drawers, filing cabinets, glove compartments, handbags and shoeboxes. Typical result? A meagre fistful of crumpled, ripped or completely faded receipts.

Just as there are many ways to skin a cat, new technology offers many ways to cure your record-keeping headaches.

The paperless office

Many business owners have now embraced cloud-based accounting software. The three heavy hitters are MYOB, Xero and Quickbooks. However, there are plenty of other options such as Pocketbook, Reckon and Saasu.

Accounting software can do all sorts of wonderful things, such as send invoices and generate profit and loss statements. One of its less trumpeted but most practical applications is keeping track of business expenses.

Xero, for example, has a ‘Xero Touch’ app. Once downloaded, it allows users to take a photo of a paper receipt they’ve received with their phone and have it automatically added as an expense claim. Quickbooks offers something similar, along with an impressive graphic display of all recent expenses on its dashboard.

These systems were designed to make it as straightforward as possible for business owners – and their bookkeepers and accountants – to keep on top of the finances. What that means in practice is that once you install one of these systems and get into the habit of photographing receipts (or uploading them some other way, such as by scanning them) you’re spared the end of quarter/financial year headaches. All the necessary data is waiting on the system for your accountant to work his or her magic. So you can just sit back and wait for that refund from the ATO to arrive.

From shoebox to Shoeboxed

If you’re not a businessperson and don’t need high-powered accounting software, there are number of mobile apps that will scan and organise receipts. Some good ones, such as the free app OneReceipt, are yet to make it down under. Others, most notably Shoeboxed, are being enthusiastically adopted in this part of the world.

With Shoeboxed there are multiple ways to upload receipts. You can email and scan them, or even snail mail them in reply-paid envelopes, but most users photograph them with their mobile phone.

The ATO has also joined the action, releasing a basic but free app called myDeductions which records work-related expenses.

While having an expense-tracking app as well as accounting software will be overkill for most taxpayers, it’s simple to sync them. For example, you can use Shoeboxed to record your receipts then have that data automatically forwarded on to your MYOB, QuickBooks, Reckon, Saasu or Xero software.

Don’t miss the digital bus

Many of the apps and software products mentioned above offer a one-month free trial. After that they typically cost $15-$35 a month. Given all the time and heartache they’ll save you and your accountant, it’s a small price to pay for what they offer. (And, remember, you can claim it on tax!)

Plus, while nothing online is completely invulnerable to hackers, if you’re putting your financial data in the cloud via a reputable accounting software provider, state of the art cyber security comes included.

Lisa Greig, Business Services Managers at Taxpayers Australia, says that everything is headed online, so people may as well get with the digital program sooner than later. Using cloud-based technology can assist with efficiency and mean accurate information is stored for tax purposes.

“And because it’s in the cloud your accountant can access it anywhere at any time, whether they need it to prepare a tax return or just want to determine the real time tax position of your business”, she says.

Call us if you would like to talk about the best record-keeping solutions.

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