Why Do We Need Receipts ?
Every business needs to keep records of the expenses done at the time of business hours. Receipts are a type of invoice to reimburse the amount if you are an employee and helps in IRS deductions. As the world is turning towards the digital age you can create the receipts digitally through receipt makers for any business whether you are employee in a delivery company, café, restaurant, owner of a petrol business, or any other business. You can create the receipt of the expenses
Business receipts help in storing the records for three years which helps in tax deductions and it is helpful in creating and drafting the receipts through emails to the client. Receipts also help at the time of the auditing. Receipts are helpful in providing proof in case of fraud charges about the expenses.
One can easily create the digital receipt through his phone or other digital device and can easily maintain the records by installing the receipt makers that will save his time and effort. These Apps provide a documented receipt template to enter specific expenses in no time.
Receipt makers eliminate the risk of loss or damage to the receipt as the receipts will be created in the device and are safe and secure to use, he can get the access on his fingertips and use it anywhere.
In addition to exhibiting ownership, receipts are significant for various other reasons like they are useful in returning some damaged items back in a certain timeframe. They are used for a warranty purpose and for taxes as IRS demands receipts for specific expenses. Receipt plays a crucial role as an important document while filing for returns. There are different types of receipts that can be generated by the businesses:
- Gross receipts like invoices, cash register, receipt books, cash and credit sales, forms 1099-MISC
- Receipts of making purchases of raw material and the amount paid which were important for running a business that includes purchase documents, proof of payment, amount, canceled checks.
- Credit card statement
- Miscellaneous expenses receipts
Reasons to keep the business receipts
Business receipts ensure huge savings on taxes and are easy to create by using a business receipt template. Individuals need to save the business receipts for various reasons:
Individuals who work independently or for the company need to create the business receipts of the expenses during business hours. This will help in getting the reimbursement from the company by submitting it to the accounts department.
PURCHASE AND WARRANTY PROOF
Receipts are crucial if you are buying major appliances like jewelry or electronics which are crucial and can ruin. Receipts help as proof and for warranty as long as one owns the item. This system helps in identifying the buying habits of the clients who are buying major appliances like computers, peripherals, and electronics and use them for business sales.
AUDITING, RECONCILING, AND BUDGETING
One needs to keep a record of receipts to know how much the expense is. Receipt helps at the time of auditing for reconciling every single penny. Receipts also help in framing and maintaining the income and spending for day-to-day business which will be needed by the auditing team at the time of preparing the financial reports.
Receipts are important to get a refund for taxable income. One should keep the receipts like medical expenses, children’s expenses, work-related receipts about the reimbursement, and self-employed expenses. One should save the receipts to save his hard and core money from taxation.
Small business owners normally have a higher rate of taxation than large businesses. They need to keep receipts in order to pay the higher amount and get the benefits of exemption during the financial year.
Why is record keeping essential?
Everyone has to save and store the receipts properly to strengthen the operations in the business. There are a few benefits of keeping records:
MONITOR THE GROWTH OF THE BUSINESS
Records help in keeping a check on the income and receipts of the business. It also gives information about the products they are selling and it will give crucial information about the ability to succeed in a business.
PREPARATION OF FINANCIAL STATEMENT
Receipts help in preparing proper financial statements including balance sheet and profit and loss account. It also helps in identifying the source of various income and expenses towards different vendors that lead to the separation of non-taxable and taxable income and actual deductions.
Business receipts help in saving tax as well as keeping a record of the income and expenses of the business. It helps in keeping track of the growth of the business and identifying their sales products. Receipts are important documents and can be maintained on paper or digital to submit during the financial year.