Managing receipts is an essential part of running a business, but it can be a time-consuming task. From collecting receipts to organizing and storing them, businesses and their employees can spend a significant amount of time managing receipts. In this newsletter, we will explore how much time businesses and their employees spend on managing receipts, the importance of keeping receipts, and how long the Her Majesty’s Revenue and Customs (HMRC) and other tax authorities expect businesses to keep their receipts.
Importance of Keeping Receipts
Receipts are important financial documents that provide evidence of transactions between a business and its customers, suppliers, and employees. They are used for various purposes, such as tracking expenses, claiming tax deductions, and for financial record keeping purposes. Keeping accurate records of receipts is crucial for businesses to maintain their financial health and ensure compliance with tax laws and regulations.
Time Spent Managing Receipts
The time spent managing receipts can vary depending on the size and nature of the business. Small and Medium sized businesses or organisations may spend a few hours a week managing receipts, while larger businesses or organizations may need to dedicate more time and resources to manage their receipts efficiently. The process of managing receipts can include collecting, sorting, categorizing, and storing them. Depending on the method used for managing receipts, businesses and their employees may spend anywhere from a few minutes to several hours each day.
There are various methods for managing receipts, including manual filing systems, digital methods, and third-party services. Manual filing systems involve collecting receipts in physical form, such as paper receipts, and storing them in a file or folder. Digital methods involve scanning and storing receipts in digital form, such as in a cloud-based storage system or on a computer. Third-party services offer automated receipt management solutions that can help businesses streamline the process of managing receipts to save time and money. Proceipt offers a great solution for this problem.
Expectations of Her Majesty’s Revenue and Customs (HMRC) and Other Tax Authorities
HMRC and other tax authorities have strict record-keeping requirements that businesses must comply with. In the UK, HMRC requires businesses to keep their records for at least five (5) years from the end of the accounting period to which they relate. This includes receipts, invoices, and other financial documents. Failure to comply with these requirements can result in penalties, fines, and other legal consequences.
Some Statistics on Receipt Management
- A survey conducted by Shoeboxed found that small business owners spend an average of 5 hours per month managing receipts.
- A study by Expensify found that the average employee spends 20 minutes per expense report just on managing receipts.
- In the UK, businesses can face a penalty of up to £3,000 for not keeping accurate records, including receipts.
- A survey by TrackMySubs found that 49% of small business owners keep their receipts in a physical file, while 37% use a cloud-based system, and 14% use a spreadsheet or accounting software.
- In a study by Neat, 60% of small business owners reported that they still keep paper receipts, while 27% use a combination of paper and digital methods, and 13% use only digital methods.
- The same study found that small business owners spend an average of 8 hours per month managing receipts and other financial documents.
- A survey by Receipt Bank found that 80% of small business owners believe that technology has made managing receipts easier, and 68% said that using a receipt management app has reduced the time they spend on this task.
- The same survey found that the top benefits of using a receipt management app were improved accuracy (cited by 54% of respondents), time savings (53%), and easier record-keeping (46%).
- A report by Ardent Partners found that the average cost of manually processing a single expense report is $26.63, while the cost of processing an expense report with an automated system is $6.85.
- According to a survey by Paychex, 30% of small business owners reported that managing expenses is their biggest administrative challenge, and 36% said that they could benefit from additional help with expense management.
- The same survey found that 68% of small business owners use some form of technology to manage expenses, with 43% using accounting software, 29% using a spreadsheet, and 18% using a receipt scanning app.
- A study by Concur found that the average employee spends 20 minutes per expense report just on managing receipts, and 40% of employees reported that they have lost a receipt at least once in the past year.
Recommendations
It can be challenging to stay on top of receipt management, but by using the right tools and technology like Proceipt, it can become much easier to manage. The Proceipt mobile app is a one stop place for the self-employed and individuals to store receipts, organise them in folders, and share with all stakeholders. The Proceipt web app offers a platform for businesses and organisations to consolidate and manage receipts from their team members and stakeholders. Using proceipts save time, money and avoids errors in your expenses.
