7 Reasons You Should Keep Track of Receipts Admin March 8, 2020 Lifestyle, Lifestyle How to Receipts can feel like clutter. If you shop at CVS, you deal with some of the longest receipts available from retailers today. Do you really need that piece of paper reminding you of the money you just spent? If you made a small purchase and paid cash, hanging on to the receipt can seem like an unnecessary task that adds more paper to your life. What if you need to return something? If you run a cannabis business, receipts are essential to tracking your business expenses and filing your taxes. Whether for personal or professional reasons, you need receipts—even if you don’t want the stash of paper. Here are seven reasons why you should keep track of receipts. 1. The Return Most retailers require proof of purchase before they’ll accept a product return. The best way to prove you purchased an item from a store or supplier is to show them your receipt. You don’t want to get stuck with something that doesn’t work, especially if it’s an expensive item. Make a habit of keeping all receipts through the end of the eligible return timeframe—just in case you need to take it back to the store. 2. The Taxes The IRS (Internal Revenue Service) requires receipts for any items or services that you claim for your annual taxes. Whether it’s a personal expense or something for your business taxes, you need to save your receipts. Your accountant needs your receipts to prepare your taxes Without receipts, you could also run into issues if the IRS decides to audit you or your business During an audit, you’ll need to show proof of purchase for every expense claimed on your taxes. The best way to do that is by showing a receipt that names the item and provides the time and date of the purchase, and the amount you paid. If you plan to claim an item on your taxes, be sure you keep the receipt long enough to do your taxes. After you file, make sure you hang on to those receipts for as long as the IRS requires. What About the Paper? Keeping paper receipts year after year can stack up! When it comes to filing your taxes, digital receipts work just as well as the paper version! You can keep the paper pile to a minimum when you scan receipts and save digital copies. 3. The Warranty If you plan to take advantage of a product warranty, you’ll need the receipt to do it. Warranties can help extend the life of major appliances, equipment, or other significant purchases. However, if you can’t show the receipt, that often voids the warranty. Avoid the expense of replacing a product that the manufacturer could have repaired or replaced—if only you still had that receipt to activate the warranty. Keeping track of receipts is worth it! 4. The Budget If you have a household or business budget, your receipts help you keep track of spending. Maintaining an annual budget is an excellent way to live within your means or maximize business cashflow and money from investors. It’s easy to get off track with your personal or business spending if you don’t have a record of how much you spend. Keeping up with your receipts gives you a paper trail (or a digital record) of weekly, monthly, and annual spending that you can compare to the budget you’ve set for yourself or your cannabis business. There’s no arguing with receipts! Your outgoing cash is there in black and white to help you stay within your budget. 5. The Reimbursements If your company reimburses you for travel or other company-related expenses, they probably require receipts before they replenish what you spent. Any time you travel for work or purchase something business-related (with your boss’s permission), hang on to the receipt. Provide a copy of the receipt to your employer for reimbursement. Keep a copy for yourself! You’ll need that receipt to confirm that the amount of reimbursement you receive matches what you spent while on company business. 6. The Credit Card Bill Credit card hacking and fraud is a significant problem these days. It can feel like a losing battle to keep your privacy intact and your credit or debit card safe from criminal activity. Holding on to your receipts is an excellent way to help keep an eye on your credit card expenses. When you get your credit card bill every month, compare each transaction to the receipts from the same month. If you see a charge on your credit card bill that doesn’t match one of your receipts, you could have a fraudulent charge. In this case, not having a receipt can help you dispute a charge with your credit card company. However, without tracking your receipts from credit card purchases, you won’t have the information you need to verify the monthly charges each month. 7. The Proof of Payment If you’ve ever had to put a deposit down for a business renovation project, you understand the risk of partially paying for work that hasn’t yet begun. You’ve probably done plenty of research to choose a reputable company to replace your HVAC system or remodel your kitchen. However, there’s still a significant amount of trust that goes into paying for work or materials before your contractor gets started. What happens when your contractor gets off schedule or claims that you never paid him to start the work? Your receipt is the proof you need to take someone to small claims court or force your contractor to complete the job they agreed to do. Stay Organized to Keep Track of Receipts! Organizing receipts is critical to help you keep track of receipts. Find a system that works for you and stick with it! Create different envelopes for different types of receipts. Once a month, go through each folder and reconcile the charges from your credit and debit cards to make sure your receipts match your expenses. Was this post helpful? We hope you’ll check out more of our articles! Leave a Reply Cancel ReplyYour email address will not be published.CommentName* Email* Website Save my name, email, and website in this browser for the next time I comment.