It is common for people to quickly say “no” when they are asked whether they want a receipt or not. But businesspeople should always ask for a receipt, regardless of what they are purchasing, especially if it is related to their business. Corporate lawyers in Orange County, California strongly advise good corporate record management to avoid problems, particularly with the IRS. Diligently collecting all receipts is part of good corporate record keeping. Learn a few tips about receipts and corporate record management by reading through this article.
1. All Receipts for Business Related Expenses Should Be Kept
This is very, very important. When tax time comes, the IRS requires that all small businesses in California have a receipt to support certain expenses made by your business. It does not matter if you are paying cash, using your credit card, or issuing a check; if you are making a purchase that is related to your business, it is imperative that you ask for a receipt.
2. Label All Your Receipts
There are lots of small businesses in Orange County, California that issue receipts with incomplete details. The only information you’ll find in many of these receipts is the amount that you paid and the date that you made the purchase. These details are not enough, and are not very helpful when you are trying to manage all of your corporate records properly. It is very important that you label your receipt with the details, such as the exact item you purchased, and for what purpose you bought it. Not only will you avoid problems when auditing comes, but you will also be able to keep track of your expenses.
3. Have All Your Receipts Scanned
There are times when the IRS might ask for documentation, and audit you up to 6 years back. It would be an issue if the receipts you’d collected from before had already faded by then. You can protect your business from any unnecessary legal problems if you have your receipts scanned. You can further back up your receipts by not only saving the file in your computer, but also by keeping a copy in a flash drive. Another cool way to have a digital copy of your receipt is to take a picture of it through your smartphone.
4. Do Not Depend on Credit Card Statements and Cancelled Checks
Credit card statements and cancelled checks are important for proper corporate record management in CA, but these are insufficient if you do not have the receipts. The IRS auditor will want to see the details of your expenses, and without receipts, you cannot adequately prove your statements.
5. Avoid Using Cash For Business Expenses
Many corporate lawyers in CA advice using cash for business expenses. Expenses made using cash are difficult to track, because cash is very easy to spend and almost always tedious to reconcile with receipts. It is more efficient to use debit cards and credit cards. Back them up by never forgetting to ask for a receipt.
Small Business Tips
Running a business is not as easy as many people may think. Having to deal with corporate records and other legal problems can be an additional burden. Make your business life easier by having a corporate attorney in Orange County, CA assist you with your company. There are various business attorneys in Orange County that are very competent, and readily able to help you in the legal aspects of your business.