Below are several tips to keep track of receipts for expenditures and a place to share your ideas on this tedious but essential chore.
In any audit whether internal or external, one of the first things an auditor is going to check is your receipts and invoices.
There should be some kind of documentation for all disbursements.
Here are 8 tips to keep track of receipts...
Tip #1: Always get a cash receipt.
Get into a habit of always asking for a receipt. Even if you purchase something used off an individual...get a written receipt from them.
Keep Track of Receipts Tip #2: Always look at your receipt.
Get into a habit of looking at your receipt as soon as you get it. Sometimes your receipt won’t print off properly. Fill in any missing information. Always write or circle the date on it too.
Tip #3: Keep track of receipts.
Have one special place to put your receipts as soon as you receive them. For some people this may be a compartment in their wallet, purse, or checkbook. For others it could be a pocket in their day planner, a compartment in their laptop bag, or a special place in their vehicle....just as long as you get in the habit of putting your receipts in that same safe place every time.
Keep Track of Receipts Tip #4: Take a picture of the receipts.
If possible set up a free account in a good online organizer/online storage such as Google Drive. If you have a smartphone, install your organizer on your phone...then take a picture of the receipt as soon as possible and file in appropriate place in the app. You can share folders in Google Drive, so everyone can instantly upload receipts to the same folder. Even better...get a good receipt management monthly subscription such as Hubdoc, Expensify, or Receipt Bank that you can upload AND categorize all receipts.
Tip...Check with your country's regulations to see if a scanned or photocopy receipt is acceptable in an audit. Even if you are required to keep original receipts...having a picture of it is a good back up to have as those receipts fade over time.
Keep Track of Receipts Tip #5: Require receipts from everyone.
This is one detail of our church secretary’s job that she states gives her the most stress. Getting receipts from everyone that is sent out to pick up things for the church. Every staff member and/or volunteer should give you receipts for purchases within a certain time frame. If they are a little forgetful where they put those receipts...have them ask the cashier to tape the receipt to the merchandise. Whatever it takes to get that receipt!
Have everyone with a smartphone take a picture of the receipt as soon as possible and send it to the appropriate person as soon as possible. That way if they forget to get the receipt to the secretary or appropriate person right away...they have the photocopy receipt to enter expense.
Tip #6: File your receipts promptly.
Every day or at least once a week...take those receipts you have put in that special place or received from other people and file them.
Do not just stick them in a desk drawer. If you have a very small organization, you can file them in an accordion file separated into the 12 months.
To keep track of receipts you can staple or tape small receipts on to copy paper and write out to the side: when, where, and why you purchased that particular item. Then file them into a file system that works best for you.
Some small churches or nonprofits organize their invoices and receipts in a series of file folders labeled by the month and year such as “Receipts July 2010”. You can keep this month and even last month’s on your desktop for easy filing and data entries. How you set up your filing system is up to you.
Keep Track of Receipts Tip #7: Enter your receipts into your accounting software often.
Most important tip! Don’t let those nicely filed receipts stack up. Enter them into your accounting software at least once a month...weekly would be better. I put a small red check mark in the corner of the receipt to indicate that I have entered it into the accounting software.
Tip #8: If you use an online accounting software such as QBO or Xero, many receipt management software like the ones I mentioned in tip 4 "integrate" with the software. So you can take a picture of your receipt, make sure the software chose the right expense account, and then "auto add" right into your accounting software!
It is imperative to safely store all your receipts and important documents. See how long you have to keep those documents: Records Retention Schedule
The following great tips were provided by FreeChurchAccounting's wonderful readers:
1. I have a large binder with 12 pocket folders for each month, and I put everything from receipts to bank statements payroll information etc. for that month, then at the beginning of the next month I reconcile.
I also send out an e-mail reminder in the beginning of the next month to everyone that has purchasing rights, that receipts are due by the 5th of that month, and so far it works well. I ask everyone to write on their receipts what Ministry is the purchase for, or for what event.
My response: The binder idea is perfect for small churches and organizations. I like the emailing idea! If the purchaser is like me...sometimes I just simply forget. An email with a due date is a great prompter for those required receipts.
2. Our church uses Wufoo so that members or contractors can submit receipts electronically. Set up isn't hard and is flexible. Note - I'm not affiliated with Wufoo at all, other than a very satisfied customer. (submitted by Phil, Durham, NC)
My response: Thank you, Phil. I knew you could send invoices through Wufoo, but did not realize you could send receipts through it as well. I notice you can send registration forms and payments through them also. Might be a good resource for church camps!
3. I think these are some good ideas. I have several churches and Nonprofits as clients. No matter how small they need to keep an organized filing system. A nonprofit also needs to have the receipts for the 990.
Everyone should familiarize themselves with the IRS record keeping guidelines.
I would also suggest if you are scanning receipts make sure it is an IRS approved method. (submitted by Lorra Brown, Arlington, Texas)
My response: Great tip! Thank you!