The end of another tax year passed by a few short weeks ago and accountants everywhere are preparing for the influx of receipts, invoices, paperwork and red tape from clients seeking to complete tax returns and balance the books, as they embark upon another financial year.
Accountants and bookkeepers report a wide range of attitudes and degrees of helpfulness when it comes to their clients. So, if you want to make sure that your accountant places you on their ‘favourite clients list’ this year, read on to find out what they want you to know about filing, storing and categorising your receipts, ready for the annual assessment period. From knowing what you can claim the tax back on to getting to grips with receipt scanning software such as Receipt Bank, we’ve got it covered.
The end of HMRC’s tax year happens every twelve months on the same date, so its approach shouldn’t be a surprise to you. All too often, delays and errors occur when people suddenly have to spring into action, dig a whole year’s worth of receipts from the bottom of their handbag or inner recesses of their wallet and then hand their accountant a teetering pile of unsorted slips of paper. Plan ahead to keep your receipts in order. By scanning them into a tool like Receipt Bank, you can be sure that they will all be recorded correctly and the information on them kept safe for accurate analysis and submission by your accountant when the time comes.
When you come to submitting your receipts to your accountant, either as hard copies or scanned into Receipt Bank, make sure that they are arranged in a logical order. Sort them and file by different categories, such as month, type of expense or the client or company department the expense is related to. This will help you better understand your spending trends over the tax year ands will enable your accountant to start work on your accounts more quickly.
Check your bank accounts
Most of us don’t spend that long perusing our bank statements – indeed, many people opt to no longer receive paper copies, but to simply have access to an electronic version via the PC or phone. However, it is far better to keep a regular eye on your bank statements to make sure that nothing has been taken out that you were not expecting, and that you have safely received any promised income. You will also need to keep hold of these in case HMRC open a tax investigation later on. In terms of your receipts, try to get into the habit of scanning you receipt into Receipt Bank and then ticking it off your bank statement as soon as the transaction appears on it. It is far easier to sort out a mistake as it happens, rather than causing problems for your accountant when it is too late to work it out more easily.
When storing, sorting and scanning your receipts, don’t forget to include those for smaller items and amounts of cash – your accountant must receive a full picture of your business activities when it comes to tax return season. Petty cash withdrawals might seem just that – petty – but it is crucial to make a note of everything you spend. Don’t forget to retain receipts for other less sizeable or sundry transactions too, such as petrol, stationery, local travel tickets, subsistence etc. Your accountant will tell you if you submit anything irrelevant – it is far better to let them use their professional judgement and experience to make that call.
Both sides of the page
Always scan in both sides of receipts with writing or data on the back and the front. Your accountant may need to know something that is not on the front, or the list of transactions may spread over more than one sheet. This is true of train, plane and bus tickets too. The joy of using an online receipt scanning tool such as Receipt Bank is that this job is made simple, plus the software picks out the relevant data from whatever you scan in, analyses it and presents it to your accountant in an easy-to-understand, highly accessible way.
Watch out for the VAT
If your business is registered for VAT, then you need to ensure that your receipts all carry the corresponding VAT numbers so that your accountant can process these correctly and reclaim the VAT as appropriate. If you lose the receipt, you can submit certain other forms of evidence that you have spend the amount you are claiming for. However, getting into the habit of scanning your receipts as soon as you receive them will reduce or even eliminate the possibility of mislaying these important bits of paper. This is also true of invoices – make sure the corresponding VAT numbers are present on each one to make your accountant’s life much easier.