For those who self manage, Do you scan every receipt?

Question

All my 2020 and 2021 expense records (receipts, utilities bills, Insurance etc) all go in a folder in the garage never to be seen again. I am about to start using Quickbooks to track everything better and get more organized. Just wondering if it is worth scanning everything so I can find every expense from years past on a hard drive.

Bruce Woodruff · Answer

No I don't scan receipts. Should I? Maybe......life is too short to waste it like that IMO. A few seconds here, a few seconds there and by the end of your life you've spent 5 years scanning receipts.

I'm more of a throw 'em in the bag guy, they'll never be needed anyway...

Everything is a card or check purchase and gets uploaded into the accounting program.

Theresa Harris · Answer

I am my accounting/bookkeeping software :)  I don't have that many receipts unless I have a turnover or buy a new place.  When it comes to tax time, it is pretty simple and I can do my taxes in about 30-60 minutes.  I have a small notebook where I write down repairs or other bills, so I don't have to go through all of the receipts at tax time.  I'm in Canada, so it may be different in the US with tax forms.

David M. · Answer

@Joseph McCrillis

Yeah...  One pdf file per year per property.  The thermal paper receipts will fade away in about a year or two.  Yeah, it feels like a waste of "seconds" doing it, but its just one of those "good practice" things to have.  If the IRS does audit me in 3 or 6 years, I at least have the proof to backup my claimed deductions.  I guess others might say its better to save your life's time and if they come asking you might just have to pay some extra tax.

I do my own bookkeeping and don't rely in important bank and credit card statements.  Besides, those statements miscategorize and don't indicate what was purchased and I don't mark for what.  That's what my bookkeeping is for...

Mohammed Rahman · Answer

Hey @Joseph McCrillis - it depends on what your scale is. Are you worried you'll be audited by the IRS and have to show all your receipts?

I use QuickBooks self employed and try to scan most of my receipts. Of course I don't scan everything, but because my QB is linked to my cards and accounts I can generate a P&L whenever I need one.

Bruce Woodruff · Answer

Doesn't your accounting software/bookkeeping do the same thing?

David M. · Answer

@Joseph McCrillis

@Theresa Harris Yes, I agree...  With long term rentals, there really aren't that many bookkeeping entries or receipts...  You should be sitting back and just receiving rent and making your monthly payments.  I just use Excel to sum up my few income/expenses by the US IRS tax form (Schedule E) so I just copy/paste them over come tax time.  So, I don't need any other software, and Excel gives me maximum flexibility to calc anything I want and how I want!  :)

Kevin Sobilo · Answer

@Joseph McCrillis, I have a hanging file folder for the receipts for each property. However, I rarely need to use them.

I pay everything from business accounts for my LLC, so my bookkeeper is able to enter every expense from those transactions. Many are self explanatory, but those that aren't I use tags in my online banking to indicate what they are and anything that I miss she just asks me about.

So, although I can find every receipt, I almost never need to.

Mike S. · Answer

I don't have anymore any paper receipt. Every single receipt is scanned and saved in the proper folder on my computer. The paper original then go to a temporary basket that is shredded every month (they are just kept for a few weeks in case or store return).

It take almost the same time to scan and name the file than finding the proper paper folder to put it in.

At the same time I am also imputing the data into my excel books and even put a hyperlink to the receipt file.

The day when I am looking for a specific receipt, I am saving not only tens of minutes, but also a lot of aggravation as I can locate any receipt in a few seconds. It has happened many times when looking for warranty information. And if I have an audit, I just need to click on my book links and the receipt pop up.

You of course need a proper digital backup plan for all your data, but it is no different than if a flood, a fire or rodents destroy your paper archive.

Last but not least, when I am not home or traveling, I can still access all of them from my laptop.

I am doing the same with all my bank statements: I am downloading them religiously every month. Some banks will only let you access the last two years of statements, while other will cut your access immediately after you close the account. So I have every single of them in my own computer folders.

JD Martin · Answer

Nope. I put everything into paper folders. I use the same credit card for virtually everything so I can always pull up a transaction on a statement if I need something instantly. I log everything into Excel spreadsheets. Most of my materials come from Lowes, which logs all of my purchases for the past 7 or 8 years online in case the thermal receipts fade away. If I'm not doing a rehab I don't have many receipts anyway.

Basit Siddiqi · Answer

Take a photo with your phoneSave the photo into a folder on your phone called receipts

For those who self manage, Do you scan every receipt?

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