Most of us start our small business because it allows us to work on something that we are passionate about, whether it is baking cakes, selling books, helping people keep their swimming pools clean and beautiful, or what have you. With this much passion, it is really a shame that we have to spend so much of our time trying to keep track of seemingly insignificant scraps of paper.
Receipts and invoices can take many different form, which just adds to the confusion. It seems like every business has their own favorite form. They can be purchased at an office supply store, custom printed, generated by computer software or even sent electronically in an email. The result is a file cabinet (or sometimes a shoebox) filled with hundreds of scraps of paper. It may look like so much trash, but the information on those scraps of paper are vital to your cash flow and the health of your business.
An invoice is a notice from a seller to his customer that money is owed for a product or service. A receipt is also a notice, this time telling the customer that the payment has been received. Sometimes an invoice can become a receipt if the seller marks it â€œreceivedâ€. Since you are giving invoices and receipts to your customers, as well as getting them from your suppliers, a huge amount of information is building up.
A huge step in managing all that information (and taming that drawer full of paper scraps) is to convert all those bits of paper into electronic data. This is relatively simple if the seller is using an electronic form to generate the invoices and receipts, but what about paper? Just scan the document and save it as an electronic file. You can use a desktop scanner in your office, or simply snap a picture using your smartphone. There are plenty of apps that will convert a picture of a piece of paper into a useful document.
Some people still prefer physical paper receipts because they are more real . However, if the ATO is willing to accept a scanned document as real, so am I! Once all of that paper is converted to electronic documents (it is a good practice to scan the paper receipt as soon as you can after you get it, before it gets lost), you will have several options to make the most of the data. We have had great success with Receipt Bank, which also integrates with other services like Xero and Quickbooks Online. Together, they make records accurate and give our clients more time to dedicate to their core business.
What could be better than more time to dedicate to your passion?