Keeping track of those receipts

Receipts are a pain and it can be easy to let them spin out of control. But no matter how new, old, big or small your business is, good record-keeping means hanging on to your receipts.

But which receipts should you keep? Where should you keep them? And for how long? Let's answer those questions and a few more shall we...

What is a receipt?

A receipt is a paper or digital document a business gives a customer who makes a purchase or payment. It includes the customer’s payment amount, the date they paid and any remaining balance.

Receipt vs invoice

The main difference between an invoice and a receipt is that the invoice is a request for payment, whereas the receipt acknowledges a payment.

An invoice is given before the purchase so you or your customer knows how much needs to be paid. It also outlines all important details of the sale.

A receipt is given as a proof of payment, an equally important document when it comes to claiming business expenses during tax season.

Supplier invoices

These invoices are essential for businesses because they keep track of the money that the business owes to its suppliers. Without these invoices, it would be hard to keep track of expenses and payments, which can lead to confusion and mistakes.

On any business purchase over R5000, a supplier invoice and receipt must be kept for tax purposes. So make sure to ask your suppliers or merchants for an invoice as well as a receipt.

What types of receipts should I keep?

Keep receipts for your business-related expenses:

Examples:

• Travel
• Office supplies & stationery
• Meals & Entertainments

It’s also a good idea to keep receipts for any item you might need to return, as well as receipts for any item that has a warranty.

On any business purchase over R5000, a supplier invoice and receipt must be kept for tax purposes.

Informal receipts

If you buy anything for your business from an informal business or seller who doesn't have digital or printed receipts, as long as you get a proof of purchase, you will still be able to claim the expense for tax.

Handwritten receipts or invoices

Handwritten receipts or invoices that come from a manual book (which you can buy at any stationery store) are perfectly acceptable as long as the purchase value is under R5000

Seller doesn’t provide you with a receipt

In this case, you will need to create a document.

Both of these scenarios will need to have the following details on it for it to e acceptable for tax:

- Document must include the words "Receipt" or "Invoice"
- Seller’s Information: Name, address, and phone number (if possible)
- Description of Goods – Details of items purchased
- Total amount you paid
- Your information: Name and address.

If you are registered for VAT, you will need to get a full tax invoice from the seller for any purchases over R5,000. For purchases between R50 and R5000, an standard tax receipt or invoice will do. No tax receipt or invoice is required for amounts R50 or less.

How long should I keep receipts?

The recommended time for keeping all receipts is 5 years, which is especially important if your receipts are for business-related expenses that you plan to claim on your taxes.

How do I store and organise my receipts?

The easiest way to organise receipts is to upload and add your receipts directly to the corresponding expense in your cloud-based bookkeeping software, helllloooo stub 😉.

In stub you can easily upload and attach your receipts to your expenses for safekeeping. You can do this by selecting an expense and then clicking on the add receipt button. Or you can simply drag and drop your receipt onto the desired expense. Told you, easy!