Is your quarterly Business Activity Statement (BAS) a massive annoyance? You frantically search out receipts in assorted boxes and envelopes, yet you still seem to be missing some?
Tax law in Australia states we should possess all receipts and invoices for expenses claimed as tax deductions. And GST law states that we need to keep invoices for all transactions over $75.
Then we need to keep them for 4 years in case a return is assessed. The paperwork often fades and takes up needed space in your home.
That’s a lot of paperwork.
Well now, there is an answer. Think electronic.
You don’t have to have an electronic accounting system but with the solution I’m about to provide, you’ll see how simple it is to use! Cloud applications have made recording and storing your receipts a simple, streamlined process.
There are many several ways to record them:
- Phone/Tablet App
- Snail mail (Yes, you really can post them!)
These programs not only store your document in an easy to retrieve system but they also use OCR (Optical Character Recognition) to pick up the important information from the invoice or receipt, such as:
- Supplier Name
- GST Amount
- Due Date
They’re then automatically coded to the relevant expense account. How easy is that?
Sometimes the program needs a little guidance so it can “learn” where your expenses belong (i.e. a Bunnings receipt could be for a home or office repair). Once it’s recorded, the system will remember it.
There are several options to share the info once it’s been coded:
- Export to a cloud based accounting program like Xero.
- Export to a spreadsheet with links to the PDF’s of the original information.
- Export collated information & PDF of the original information into a PDF.
- Download individual receipts, if required.
So why is this so awesome?
- All of your receipts are stored in one safe place. No more searching or storing boxes of paperwork.
- More space is freed up in your household. (How much room are receipts and invoices taking up in your household now?)
- You can reduce the time it takes to prepare your BAS by 95%.
- Your accountant can view information more quickly and readily, meaning a more accurate, painfree job.
So what’s so great about cloud bookkeeping programs, namely Xero? Xero is a cloud accounting and bookkeeping program that simply put, makes your life much easier.
- You can set up automatic bank feeds. Since your bank pushes through an electronic version of your transactions daily, you can reconcile as often as you’d like.
- Your invoices are automatically matched to the bank transactions. If you push your bills through an electronic receipt-processing program (like Shoeboxed or Receipt Bank), they’re automatically matched by Xero by the name and amount on your bank statement.
Let’s say you purchase fuel at BP and upload the receipt to Receipt Bank via the app. When the transaction shows up in your bank feed, Xero matches it and suggests where it belongs. You simply click “okay” and the whole transaction is reconciled. No more typing in the date, name, amount and account code.
- You can easily set up recurring transactions such as rent or loan payments. Xero will automatically code them. This means the right loan payments go to the right account every time.
- You can access your information anytime and anywhere on any device. Your accountant and bookkeeper can access your files at the same time. Easy access and no cumbersome file transfers.
- You never need backup again.
- You never need to upgrade since it’s automatically done overnight. You’ll just receive a message in the morning detailing the update.
Not convinced yet? Let’s recap:
- No paper storage
- Up to 95% cut off your tax processing time
- No upgrades
- No file transfers
- A happy accountant
- A happy ATO
We recommend both Receipt Bank and Shoeboxed with Xero. Contact Victoria at Bookkeeper Hub for more information.
Subscribe to Bookkeeper Hub for your bookkeeping needs by February 28 2017 and you’ll receive a free invoice setup service so your Xero invoices are arranged just the way you like them.
Photo credit: librariansarah via Visualhunt.com / CC BY-NC-SA