Keeping all of your receipts is PERFECT, it’s great, and I’m so proud of you. But, I’m sorry to break it to you, it is not efficient, will cost you a lot of money, and you will get the death stare from your accountant when you walk into their office. It’s a good thing I love shoeboxes filled with receipts 😉 No death stares from me.
Just because I won’t give you the look and turn you away doesn’t mean you should continue down this path. Receipts piling up cannot tell you how much you have spent in advertising, how many late fees you’re being charged, or whether you have enough money in the account to pay those bills.
What it will give you is…
- A huge headache. Come on, I know that the thought of, “I’ll do it next week,” or, “It won’t take me that long at the end of the year,” has ran through your mind more than once. What always happens? The stress level builds because you know it needs to be done and then you end up having to file for a tax extension at the end of the year. Since you can’t catch up on a year worth of transactions you pay someone an arm and a leg to do it for you. Not fun!
- Bad financial decision. I know you don’t want to hear this, but without your reciepts properly categorized in accounting software (like Quickbooks Online), you cannot run financial reports, leading to uninformed financial decisions. Read my blog post on the importance of financial statements.
- Big tax costs at the end of the year. Haven’t been paying your sales, income, or payroll taxes? You’re in for a load of trouble with all the fees that will be piled on. You can’t pay your income taxes if you don’t know what your quarterly net income was.
Please, I’m not trying to give you a heart attack, I just want you to be informed. The good news is that you can start changing all of this right now. It is never too late to get back on track, but if you’re not sure where to even start I have created a Simple Bookkeeping Checklist for you 🙂 Please take advantage of it.
With (tough) love,