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Tips on how to organise paper invoices and receipts for businesses

Tips on how to organise paper invoices and receipts for businesses

Small businesses routinely face delayed payments from suppliers.

According to an analysis conducted by Xero, a business software platform, late payments cost small business owners £684 million annually, with invoices being settled, on average, 5.8 days past the due date. Late payments negatively impact small businesses' cash flow and working capital requirements.

Companies can ensure timely payment for their services and products by organising their business receipts and invoices efficiently. Invoices and receipts are essential documents for businesses as they provide a clear record of purchases and sales of goods and services. In short, they are invaluable documents, particularly when dealing with tax-related matters.

This article at a glance

Efficiently organising invoices and receipts is crucial to ensure timely payment and maintain accurate records. Proper documentation facilitates financial management, proof for accounting and tax purposes, and strengthens business relationships. Businesses can organise invoices and receipts either physically or digitally. The key takeaways of this article are: file your invoices and receipts immediately upon receipt and create backup digital copies of your financial documents.

What do invoices and receipts mean for your business?

What is an Invoice? Invoices and receipts help businesses keep track of their transactions with customers. Invoices are used to request payment, and receipts are used to show proof of payment — they work together to allow for complete and accurate record-keeping.

For every small business owner, maintaining proper records of digital and/or paper invoices and receipts facilitate:

  1. Good Financial Management. Businesses can gain insights into their revenue, costs, and profitability by referring to their invoices and receipts. Remember to monitor your non-bank expenditures too, such as home office costs (for startups or small businesses), vehicle-related expenses, owner withdrawals, and one-off purchases. Keep receipts of all of your company assets such as computers and office equipment.
  2. Documentation and Proof. Invoices and receipts are essential for accounting, tax rebate and reporting, and audit purposes. They ensure transparency and compliance with laws and regulations.
  3. Maintaining Business Relationships. Invoices and receipts help resolve any disputes or discrepancies. Well-managed invoicing and receipt systems enhance credibility, professionalism, and trust in business interactions.

For a limited company in the United Kingdom, it is best that you keep up all your invoices and receipts for at least 6 years as part of your accounting records, as required by the HM Revenue and Customs (HMRC). Having an effective record-keeping system allows you to make better decisions, ensure your business’s compliance and strengthen your overall operations.

How can you organise your invoices and receipts?

Whether it’s organising paper receipts or digital receipts, there are some simple steps that you can follow:

  1. Verify and Update Information. Before filing an invoice, ensure that all the details are accurate and up-to-date. This includes contact information, numbers, money amounts, and payment status (paid or unpaid).
  2. File Receipts and Invoices Promptly. Make it a habit to file receipts and invoices immediately. Establish a filing schedule that suits your business, whether filing promptly upon receipt, daily, or weekly.
  3. Categorisation by Month and Year. Organising digital or paper invoices and receipts by date allows for systematic filing and easy retrieval. Alternatively, you can separate invoices based on payment status for precision, especially if you use a physical filing system.
  4. Leverage on an Invoice and Receipt Tracking Software. Options range from free basic spreadsheets to paid comprehensive accounting software. Utilise them for efficient bookkeeping.
  5. Backup Regularly. Whether you store receipts electronically or use paper receipts with an analogue filing system, backup your files regularly. Since invoices and receipts may be required for tax purposes even years later, ensuring long-term accessibility is essential.

Maintain order, easily locate business receipts, and safeguard crucial financial records for your business by implementing these steps in your business. Your stress levels will wane away when tax season comes a-knocking.

Let’s look into the physical and digital methods of organising invoices and receipts in more detail.

Physical Method

Your company may have adopted a digital-only record-keeping system, but one of your clients solely communicates via mail, and this customer still issues a paper invoice or paper receipt. What then? Make sure you have sufficient storage space for (actual) folders and the necessary supplies (back to the bookshop!). Here are more tips for you:

  • Make two copies of each invoice or receipt: one for your client and one for you. Record and file your copy promptly.
  • Buy accordion folders to store all your business receipts. With these folders, you can organise by category and year, simplifying future retrieval.
  • Match invoices with receipts to sort receivables from payables.
  • Review your documents for about 30 minutes monthly — this is more manageable for you in the long run.
  • Scan paper invoices and receipts and record them into your accounting software as a backup, while storing a copy of the electronic receipts in one of your digital folders.

Digital Method

Digitisation simplifies and streamlines business, and organising invoices and storing electronic receipts is no exception. To store your receipts electronically, you have the option of using specialised software or simply storing scanned receipts on your computer.

It is crucial to ensure that you back up (using external hard drives or cloud servers) your digital receipts to avoid the risk of losing important financial information.

Utilising accounting or receipt management software enables you to upload, record, and track your invoices and receipts efficiently. Software systems offer features like setting reminders to prompt you to upload and organise receipts.

Forbes recently listed their selection for the “Best Receipt Scanner Apps (2023)”. Who made the list?

  • Zoho Expense
  • QuickBooks Online
  • Wave
  • Dext Prepare

These apps let you scan and store receipts and invoices on your phone — an absolute breeze.

While adopting most of these digital systems may add costs for you in the short term, they allow you to embrace a paperless approach to financial documents, which consumes little or no space and simplifies long-term retrieval.

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Dealing with extensive paperwork can be overwhelming and burdensome. We hope that we have some shed light on how to organise your invoices and receipts with the practical approaches listed above.

Similarly, break free from the high fees, unfair rejections, and outdated regulations of cross-border business payments using Silverbird. Get started 100% online — no interviews, physical documents or visits required. Join us now.

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