Bookkeeping Frustrations: How Did I Pay For That?
Keeping track of your receipts ...
Posted by Alison Mead on 05/10/2020 @ 8:00AM
I thought I would share with you one of my own common bookkeeping frustrations so you can learn from my experiences. This will help you whether you do your own bookkeeping or if you outsource ...
Getting all your receipts mixed up when you're doing your bookkeeping has an easy fix!
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When you are sorting through receipts for a business or going through the bank feeds, make sure you mark your spending against the correct accounts. This is particularly important when you use multiple payment methods.
In my experience it is rare for a business owner to only use bank transfers to pay for everything, so when you spend money in your business make it obvious to yourself how you spent the money.
"This will help you get your records correct and save you time!"
It could be a debit card, business credit card, personal credit card or even cash. When you get a receipt, just look and see if it's obvious how you paid for the items and make a note on the receipt if it isn't. This is especially needed if you are the sort to empty out your bag once in a while and find a handful of mixed-up business and personal receipts.
When you pay by card, some receipts have the last 4 digits of the long card number printed on them (if you are lucky). For my bookkeeping clients who use a variety of cards, I keep a note of which account each 4 digit number relates to then I can ensure I mark the receipts or invoices as paid to the correct account.
It is also quite common to accidentally pay for something personal on your business account, and vise versa. You can save both you and your bookkeeper time by noting on the receipt that the item is personal spending and it can be adjusted for.
Any personal spending receipts don't need to be uploaded to your accounts package, it is just treated as if you as a business owner have taken money out of the company. I often keep a director's loan account to manage these transactions as sometimes you may pay for things on behalf of the business, and you need to be paid back and vice versa.
If you can do it for each and every receipt, it will save you time and effort if you use separate bank accounts for business and personal spending and you are consistent in how you use them. In my own business, I have put sticky labels saying 'main account', 'personal account' and 'emergency spending' on our cards, so we are clear when to use them.
When I have entered all the invoices and receipts for a month and have finished reconciling the bank accounts, I will always then go back and review the outstanding bills left unpaid at the end of the month to check they have all been marked as paid as expected.
"It may be you spot something which you paid cash for or paid on a personal card in error!"
So, there is my quick top tip for managing your purchase invoices/bills and receipts in your bookkeeping. It really will make your life easier, and that of your bookkeeper if someone else is looking after your accounts.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more, it may be a great idea to give me a call on 01604 217365 and let's see how I can help you.
About Alison Mead ...
Alison loves bookkeeping and supporting bookkeepers. She has been helping clients to be better bookkeepers in Sage 50 for over 24 years and has been Xero Accredited in accounts and payroll for a number of years too.
She specialises in a very unique hand-holding method of training, helping bookkeepers and business owners to use their accounts software as and when they need support in setting up and producing their invoices, reports and financial information.
Alison combines her role at Silicon Bullet with her Forever Living network marketing businesses and is often to be seen at business networking meetings as she likes to keep busy.
You know what they say: if you want something done well ask a busy person!
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