- Is there an EASY way for a small business of 1-3 people to save receipts? Yes! At ColvinCPA, we are constantly searching for apps and technology that can make life easier for our clients!
- If you use Xero accounting software, the simplest solution is called Xero Expenses.
- Xero Expenses costs an additional $30/month on top of your existing Xero subscription.
- How do you use it to process a traditional paper receipt, like a restaurant receipt? With your phone, in about 10 clicks.
- Click 1: Open the app on your phone.
- Click 2: The “+” button.
- Click 3, 4 & 5: The “take a photo” button. Snap the photo. Approve the photo.
- Click 6: Type in the amount paid.
- Click 7: Type any note such as Lunch with Sue about guest podcasting.
- Click 8: Type where the money was spent.
- Click 9: Type the account to record it to. For example, meal expense.
- Click 10: Send. This sends the receipt into Xero.
- How do you use Xero Expenses to process an electronic receipt in your email. With your computer, in about 10 clicks too.
- Click 1: Open your Xero software.
- Click 2: The “business” button.
- Click 3: The “expenses” button.
- Click 4: The “new expense” button.
- Click 5: Print the receipt to pdf and drag & drop it to the Xero screen.
- Click 6, 7, 8, 9, 10: Same as above.
Pros: All of your documentation is in Xero for you and will stay there forever. Even if you cancel your Xero subscription, you can always re-subscribe to open and look up transactions in the event of an audit.
Cons: It costs money ($360/year). It takes time (about 30 seconds per receipt once you get used to it). The biggest issue we tend to run into is when clients don’t process their receipts routinely enough. So when we work on reconciling your accounts and the receipts are not there to guide us, we hit a wall. If you decide to implement this plan, we strongly recommend that you COMMIT to processing all of your receipts at least once per week.
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Disclaimer – Everyone’s tax situation is different. You should always consult your tax advisor on tax matters to ensure you are in compliance.