How should I record, store and back up my receipts?
As a business owner, you will no doubt have allowable expenses that you can claim against your tax liability at the end of the year.
Depending on the nature of the business you run, the costs you claim will vary, but they all must meet the rules set out by HMRC. Importantly, they all must be available if HMRC decides to carry out an audit of your firm, so you need to ensure you record, store and backup your business expenses properly.
When your employees make purchases on behalf of the business, they might use their own money, company credit cards or petty cash. All of these will require tracking, and you will need to record how the money was spent, what it was spent on and where.
For this, you’ll need to rely on your employees completing claim forms and returning these, along with receipts, to you or your finance team for processing.
This can lead to accounting delays if forms aren’t returned on time, receipts are missing, or the information included in them isn’t accurate. It can also lead to significant issues, including having to pay back money to HMRC, if these inaccuracies aren’t discovered until you have an audit.
Soldo can help you to mitigate these issues by streamlining your processes for employee expenses, removing the need for them to use their own or petty cash and reducing the reliance on company credit cards (which can become expensive if you are charged transfer fees).
Our prepaid cards are accepted at over 30 million locations, including 1.5 million cash machines. You can give them to employees and instantly add money, so they never have to use their own funds. Learn more about one of the best prepaid cards for small businesses here.
Our admin dashboard then allows you to obtain real-time information as to what is being spent where and provides reports to help you better track your company’s expenses.
One of the main ways to evidence business expenses is through receipts, which – given that they are paper-based most of the time are easy to lose and likely to get damaged.
This is true not just for the employee claiming the expense but for the finance team having to process and store the paperwork. If you are a business owner, you must keep receipts for six years. If you are a sole trader, it’s five.
The good news is that HMRC doesn’t require you to keep physical copies; electronic versions are fine provided that they are legible. This means that you can take a photo or scan them in. Remember, whether you scan in or take a picture of your receipts, copy both sides if the back isn’t blank.
Many firms now look to save paper by printing double-sided receipts, or there may be information such as a head office address you need down the line. Also, write what the expense was for clearly on the receipt. This will help you remember why you spent money six years ago if HMRC does audit your business.
Back up receipts
Once you have scanned a receipt or taken a photo, you need to store the copy safely and securely. This may be on your in-house IT system, in the cloud, or through an app.
If you use your in-house network, make sure it is backed-up, so you aren’t at risk of losing the data. For the cloud, consider Google Drive or Onedrive, both of which are easy to use and can be accessed through the web.
If you are using Soldo’s prepaid cards, you can store receipts securely on our system, which includes automatic back-ups. This can be done as soon as an employee spends money by using our mobile app. They take a photo and upload it to the system. Your finance team can then reconcile it to the spend on the individual employee’s card.
Soldo helps you streamline your expense process, saving you time and reducing the likelihood of costly errors. Our expense management solution provides accurate, up-to-date information that you can use to manage your company’s expenses better.
If you would like to know more, visit us here or to contact Soldo for further information and advice.