You Can Probably Throw Out Your Paper Receipts. But Only If You Do This First.
The shoebox of receipts is one of the most common reasons small business records fall apart. The good news is that you generally do not have to keep paper. The ATO accepts electronic records. The catch is that a poor digital copy is not much better than a lost one.
What Makes a Digital Record Acceptable
A digital copy generally needs to be:
- Legible. If you cannot read the supplier, date, amount and what was bought, it will not support a claim.
- A complete copy of the original, showing all of the information that was on it.
- Kept in a form you can retrieve and produce if asked, and for the required period, which is generally five years.
A blurry phone photo that cuts off the total fails that test, even if it feels like a record.
Where Digital Records Go Wrong
- Poor quality scans. Faded thermal paper is the classic problem. Receipts printed on it can become unreadable within months, so capture them early.
- Receipts saved to a personal phone or inbox, with no connection to the transaction in your accounting software.
- No link to the payment. A receipt on its own does not show that you paid. Matching it to the bank transaction closes the loop.
- Records tied to a single service. If the app or subscription ends, so can access to your records.
A Practical System
- Capture receipts at the time of purchase using an app that attaches them to the transaction.
- Check the image is readable before you discard the paper.
- Back up your records somewhere you control, not only inside one provider.
- Keep the records for the required retention period.
RBizz sets up simple receipt capture and bookkeeping systems that make the shoebox obsolete. Get in touch if your records still live in a drawer.
