Are you consumed with clutter of the receipt kind?
Despaired by office disorganisation?
Or embarrassed by the enormity of facing your accountant?
Don’t feel overwhelmed any longer: there is hope of facing the tax man head on with confidence and it’s not rocket science!
Here are seven steps to ensure tax time is no longer the lowlight of your year and when June 30 looms you will be sorted (in more ways than one).
1. As the scouts say: Be prepared! The first step is to set up a filing system for your receipts that works for you. Concertina file, plastic sleeved folder or even the ole shoe box – you must make it easy for yourself to easy store receipts otherwise it won’t happen. And remember to regularly clean out your wallet.
2. Like Santa: keep a list and check it twice. What sort of things can you claim – petrol, donations, dry cleaning? And what paperwork does your accountant need – share certificates, bank statements, group certificates? Make sure you update the list each year as your situation changes.
3. Sort the paperwork into categories that works with the way your brain works so if you have to quickly find a receipt you can put your hand on it. Is it by month, type of expenditure, different projects?
4. Habit. Make sure you do this on a regular basis – either once a week or when you clean the receipts out of your wallet. The more you do it, the more it will become a habit and you will stick to it. Even keep a plastic zip lock bag in the car to empty receipts in as you get them so they don’t get lost.
5. Make it electronic. If you really wish to be organised and keep your accountant happy you could try entering your deductions into a spreadsheet once a month. This way at the end of the financial year it will be a much more simple process to calculate the year’s expenses and your accountant will be thrilled. Another idea is to check out the plethora of smart phone apps that can take photos and organise all your receipts and even record voice memos.
6. Advice. Speaking of your accountant, why don’t you ask them for advice on the best way to categorise your documents? They know all the tips and shortcuts that are allowable. For example I was entering each individual receipt for petrol into my spreadsheet when my accountant suggested I just add them all together each month and put it in as one lump sum. Hours saved!
7. Storage. Develop a storage system for your old receipts – remember you may have to keep them for up to seven years and you never know when you may be audited (as I was when I was still at university with a part time job!)