Episode 73: Receipt Tracking for Creative Entrepreneurs: Beyond IRS Compliance

Welcome to the Creative Minds Smart Money Podcast, where we turn financial confusion into creative confidence. I’m Samantha Eck, bookkeeper and fractional CFO for creative entrepreneurs. Each week, I’m sharing my financial expertise and actionable strategies to help you build a thriving creative business.

Plus, you’ll hear from industry experts who bring fresh perspectives on growing your business beyond the numbers. Because building a successful creative business starts with strong financial foundations. Your next chapter starts now.

You’re listening to the Creative Minds Smart Money Podcast. And today’s topic is another essential core topic that I haven’t talked about before. I don’t know why I haven’t talked about before, but one that I think is very, very, very important and that I should have talked about a long time ago, and that is receipts and why they do matter more than you think.

A lot of people will just say, who cares about receipts? You know, I don’t need them. But especially if you are buying something physically in a store, if you are going and buying coffee, receipts are going to be so, so, so important. So important, okay? But let’s really dive into why the receipts are important and why they’re just, again, more than just compliance and really get into everything that we need to just talk about receipts.

Like, what do we need to know? What is the good information, Samantha? So obviously there is the very classic amount of people who have a shoebox full of receipts. They save every scrap of paper, but they don’t actually look at them or they don’t actually analyze the receipts and know what’s going on. So keeping receipts isn’t the same as using receipts.

Premium bookkeeping and premium services, because receipt tracking is a premium service because there’s so much that goes into it that is more than just like matching it up to a transaction. It turns that pile of receipts into power, okay? So in terms of receipts, what does the IRS actually say? Let’s talk about the basics, okay? So first of all, the IRS does require receipts for over $75, especially for meals, travel, and anything that’s deductible. That does not mean that you should not just throw away receipts that are under $75.

This means that they require them for anything over $75. That does mean that if you have something small, you should still send in a receipt to your bookkeeper. You should still keep the receipt, but it’s not as vital as ones that are over $75, okay? A receipt isn’t just a piece of paper.

It can be a digital confirmation, can be an invoice, can be itemized statements, things that you get digitally, anything like that. There’s a bunch of different ways that you can prove that it is a business expense, okay? So why are receipts more than just compliance? First of all, receipts are proof if the IRS ever asks questions. So if you ever get audited and they’re like, hey, is this a business expense? If you have a receipt, you can prove that it is a business expense, right? Like you have verifiable proof.

And I often tell my clients, hey, if you have a physical receipt, like write down exactly what it was for on that receipt so that if the IRS ever comes by and they’re like, hey, can I see this? You actually have physical proof, okay? So then obviously receipt is also going to be categorization clarity. So a charge that just says Amazon could be a number of different things. It could be office supplies.

It could be inventory. It could be client gifts. It could be a Christmas present for your grandma.

I don’t know. But receipts are going to make that difference, especially if you’re a bookkeeper, a receipt is going to be able to show them, oh, hey, like, you know, that was for a printer. I know that that’s an office supply.

I’m going to write that as such, okay? And then of course, receipts are going to help with cashflow awareness. They show exactly what you bought and why it’s not just some sort of lump sum. So if you have an Amazon order that has office supplies and inventory, we’re going to be able to separate those out to give you that deeper clarity and deeper understanding of your numbers overall.

So what is the premium difference with receipts? There’s obviously the shoe box method. So you can have a box that you just toss receipts in. That does mean that there’s no insight clarity.

And of course, it is a giant mess of tax time if you need to, like, dig through them and figure out kind of what’s going on. But you can also have that premium service, which a bookkeeper can have, which organizes your receipts into a system. You know, we’ll have them scanned or keep track of them, attached to transactions.

That’s going to make categorization really correct. Because when you have all those receipts in your books, it’s going to give you what we like to call bulletproof books. There’s literally no reason the IRS should be like, oh, hey, this isn’t a business transaction because there’s a receipt attached to every transaction.

So if you ever got audited, all the proof is already there. There’s no reason that they can be like, oh, no, we’re not going to do that. You already have it there.

This saves you hours of stress if an auditor, CPA, or even a lender ever asks for backup or ever asks for, hey, what the heck is this? And as a bookkeeper, obviously, I’m attaching that. So if your CPA is like, what is this transaction? We can already tell them because the receipt is there. So I want to make it clear that if we’re working together and I’m doing receipts for you, you’re not paying for me to store your receipts.

You’re paying for me or whoever you’re paying to integrate them into your financial story so they actually do something for you. So they’re not just sitting in the box and they’re not just kind of sitting there and not doing anything for you. So how do we handle our receipts? First of all, the moment that you get a receipt, capture it, take a photo, email it, upload it to an app.

I have an app called Keeper that all my clients can upload their receipts to. We attach it to their transactions. We make sure it’s all good.

If we have any questions, we ask questions, you know, the moment you get a receipt. So if you just bought gas at a gas station, snap a photo of it, send it to your bookkeeper, whatever it is, tie those receipts to transactions in your bookkeeping software so that they’re never floating around on their own. There’s not just random receipts out here and there.

And if you’re working with a bookkeeper, use the system that they’ve set up so that your part is simple in getting the receipt in. That way you just have those receipts in for them. So today’s episode is super, super short and sweet, but I want you to understand that receipts are leverage.

So receipts are very important. And so many people kind of toss them to the side and say, hey, whatever. Like even me, I have a folder of receipts in my mailbox for my receipts from my business, as well as like the invoices that I sent out to my clients.

That way I understand and have everything there. When it’s handled right, they’re going to give you credibility, clarity, and control of your business. Because if you just shove them into a shoebox and forget about them, they’re just cluttered, right? You don’t actually understand.

So if you ever got audited, you have to dig through all those receipts to try and find a receipt for someone to prove why this is actually a business expense. So think of receipts as like the fine print of your business story. It’s really worth keeping them clean and organized because the details are what protect and empower you as a business owner.

Okay? As always, if you enjoyed this episode, please like it, share it, subscribe, leave a comment, whatever it is to get more people in here and more people listening. As always, I appreciate you. If you are listening, you mean so much to me.

Again, this is one of my favorite ways of advertising and talking about things and getting topics out there. So I really appreciate it. If you guys ever need anything, feel free to send me an email or a message on Instagram.

As always, I wish you the best week ever and we will see you next week. Farewell, fellow travelers.