Why should I care?
If you track your receipts, I guarantee you will end up with more money at the end of the month.
Even if you don’t, having a detailed receipts tracking system will allow you to maximize your tax deductions on your current or future business.
As a bonus, having a detailed record of your purchase habits can save you a TON of money in future legal battles.
Record, track, optimize.
The process is fairly straightforward if tedious.
Anywhere I make a purchase (cash or card), I ask for a receipt. I then keep those receipts in either my wallet or a dedicated sandwich bag until I get near a scanner. I then scan all the receipts as individual .pdfs. All scans are saved to specific folders in my Google Drive.
This allows me to not only have a EXTREMELY detailed record of my spending habits, it also helps when it comes to tax season, legal issues, etc.
Regularly tracking your receipts does take some dedication. I personally cannot wait until all receipts are emailed and/or saved digitally BUT until that day happens this is the most effective process.
Step 1: Get in the habit!
Even at establishments that offer to email receipts, I still get a physical receipt due to some systems not offering the same information that appears on their physical receipt.
Of course, you will get some dirty looks from the tree huggers. It’s not worth the argument but with a little research you can easily see that receipts are the least of our concerns when it comes to global warming issues.
Step 2: Make notes!
Step 3: Save the receipt!
To get around this, I keep a sandwich bag (waterproof) in my backpack solely for my physical receipts.
I make my notes, stick the receipt into my wallet and then as soon as I get back to my backpack I stick it in my “receipt bag”.
Step 4: Scan it in!
I routinely find $29 printers at Amazon or Walmart that easily outperform my $100+ mobile scanners. The quality of the PDF is better and I can print a document if I need to.
As of the time of this writing, I think mobile scanners are just not “there” yet so you are better off buying a super cheap printer with a scanner. If I change my mind, I will update this training.
Step 5: Name the PDF!
The naming structure is EXTREMELY important as this is how you will lookup the receipt when you need it in the future.
After repeating this process for over 3 years (and thousands of receipts in storage), here is the system I use.
First, you want to include the timestamp.
I use YEAR-MONTH-DAY.
Next put the BUSINESS NAME CITY STATE.
Example: 2018-01-05 Joes Pizza Los Angeles CA.pdf
Next describe your activity using keywords that you will be able to search later.
Example: 2018-01-05 Joes Pizza Los Angeles CA dinner for gabe and xyz client discussing project x.pdf
Last put the the total amount (including tip if needed).
Example: 2018-01-05 Joes Pizza Los Angeles CA dinner for gabe and xyz client discussing project x 106.43.pdf
You always want to include the date first and the total amount last. What you put in between depends on how important the event was for tracking and/or tax purposes aka be more detailed the more important it was.
Step 5: Upload to Google Drive
The reason I use Google Drive is because I am almost constantly moving and keeping the receipt locally on my computer is very risky (due to bags being stolen, devices breaking, etc).
You can get unlimited personal Google Drive storage for $9.99USD per month as of the writing of this training. According to my sources, this price should go down soon.
You can either login to Google drive on your browser (drive.google.com) or use the desktop application (available for Mac and Windows) to upload the .pdf files to your Google Drive.
To design your storage, I suggest using a top level folder called “Receipts | Master”.
You should then create a sub-level folder for each category. Example is “XYZ | Receipts | Master”. Some categories include Clients, Restaurants, Coffee, Fast Food, Groceries, etc. If you buy a lot of a particular category make sure it has its own folder.
For example, I buy a lot of gadgets from Frys so I have multiple folders just for Frys such as “XYZ Client | Frys” and “ Gaming | Frys”, etc.
Google Drive allows unlimited folders to be created. The more you segment out your receipts the easier it will be to spot patterns and optimize spending.
The End / Recap
HOWEVER, I would love to know your thoughts, feedback and testing variations. PLEASE share as I am a total nerd about this stuff and love to test new ideas.
I can’t wait to see the impact you have on our world!