Guest Post: contributed by Jennifer Hazen of What a Business!
Are you having trouble managing those crumpled receipts, hard copy bills and invoices? Do you dread it and avoid it?
You are not alone. I used to feel the same way too.
Twenty something years ago, I was handed a box with a year’s worth of receipts, bills and invoices. The request: to organize the paperwork into a proper system and tally up all the expenses for the accountant.  Back then, I lacked basic bookkeeping knowhow, compounded by a fear of mathematical formulas.
Looking back over all these years, I consider that first assignment a blessing in disguise. It made me challenge certain assumptions:
  • I confronted a longstanding belief that I didn’t really have an aptitude for math
  • Learned a new skill called Bookkeeping 101
  • I realized that even though the job was daunting and out of my comfort zone, I could complete it.

Since then, I’ve spent countless hours helping clients get “out-of-their-shoeboxes” – the prep work for their bookkeepers or accountants. My most recent epiphany:  Have I been doing them a disservice by doing the work for them? Maybe.

By having someone else organize it, they may not know how much they are spending and what are their biggest expenses and bills? Receipts and bills hold the key to receivables/payables – and the bottom line.
So here’s a Top Ten List of easy tips to get you organized in 2012. Because if I can do it, you can too!
1. When you make any kind of purchase for your business, or eat out in a restaurant with a client, take an extra moment and borrow the cashier’s or waiter’s pen. Write down the purpose and type of expense on the receipt on the spot– i.e.: meal with client, including the client’s name or office supplies. It’s easier to remember what you bought today rather than next year.
2. Check out this practical tip from Leigh Mitchell, founder of WomeninBizNetwork, here.
3. Buy an accordion folder like this one and keep it handy. Drop bills, invoices and receipts into it, by month (Jan-Dec). Or set it up by account type (credit card, bank statements etc…) and attach corresponding receipts and bills to each statement.
4. Open the mail, as it comes in. Toss out the empty envelopes.
5. If out of sight means out of mind, set up a bill payment centre, or use a bulletin board to pin up your bills to be paid.
6. Buy a red pen or a ‘PAID’ stamp and write the date paid and the cheque number on bills or invoices.
7. When paying for items by credit card, staple the itemized receipt to the corresponding credit card receipt to avoid accidental double entries in your books.
8. Make sure you keep receipts to back up your purchases. Credit card statements alone are not good enough at tax time.
9. Try not to mix business and personal expenses. (Think Peanut Butter. P for Personal; B for Business.) Best practice is to use separate credit cards for each. If you do mix them up, identify those items with the letter B for business expenses paid by a personal account and P for personal expenses paid on a business account, to separate them out.
10. Schedule a weekly or bi-weekly block of time to do the above and pay bills.
Here’s one more:
11. Look into QuickBooks, Simply Accounting, Freshbooks or Wave Accounting, as a better way of handling things, in the near future.

Have a question or comment, please do post it here.

Image: patpitchaya / FreeDigitalPhotos.net