Best Practices for Managing Paper Receipts
Best Practices for Managing Paper Receipts
Hi. I'm curious to get some input from the community on best practices for managing paper receipts, whether personal receipts or business-related receipts...
1) What are the arguments for holding onto and filing away paper receipts?
2) In what situations does it make sense and not make sense to hold onto paper receipts? (For example, if you have a digital duplicate of a paper receipt, it might not be necessary to hold onto it?)
3) Related to the prior question, when and how are receipts useful when it comes time to file your taxes? (For example, is it necessary to have receipts for everything in case you're audited?)
4) Is having a bank card or credit card record of a transaction a sufficient substitute for having a full-blown receipt?
5) In situations where it does make sense to hold onto paper receipts, how long should you hold onto them for?
6) Finally, what are some apps and/or systems that help streamline this process?
1) What are the arguments for holding onto and filing away paper receipts?
2) In what situations does it make sense and not make sense to hold onto paper receipts? (For example, if you have a digital duplicate of a paper receipt, it might not be necessary to hold onto it?)
3) Related to the prior question, when and how are receipts useful when it comes time to file your taxes? (For example, is it necessary to have receipts for everything in case you're audited?)
4) Is having a bank card or credit card record of a transaction a sufficient substitute for having a full-blown receipt?
5) In situations where it does make sense to hold onto paper receipts, how long should you hold onto them for?
6) Finally, what are some apps and/or systems that help streamline this process?
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Re: Best Practices for Managing Paper Receipts
I'm a minimalist.
I have two baskets - "tax & HSA receipts - the other: "purchase receipts"
Every few weeks or so, I gather up the tax (deductible expense etc) receipts and put them in a current tax year file - the HSA receipts go in their file.
Around the same interval, I check the purchase receipts to see if they roughly match up to the credit card statements. Any items I might want to return, I hang onto longer and eventually, they get tossed.
I have two baskets - "tax & HSA receipts - the other: "purchase receipts"
Every few weeks or so, I gather up the tax (deductible expense etc) receipts and put them in a current tax year file - the HSA receipts go in their file.
Around the same interval, I check the purchase receipts to see if they roughly match up to the credit card statements. Any items I might want to return, I hang onto longer and eventually, they get tossed.
How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.
Re: Best Practices for Managing Paper Receipts
Other than receipts related to tax matters, the only ones I keep are those that might have some relevance for returns, warranty or something similar (e.g. record of installations, maintenance on the house).
re: #6 - recycle bin or shredder is most useful
re: #6 - recycle bin or shredder is most useful
Stay hydrated; don't sweat the small stuff
- Hawaiishrimp
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Re: Best Practices for Managing Paper Receipts
Thank me later.
Fujitsu iX500 ScanSnap Document Scanner + EverNote (FREE)
https://www.amazon.com/Fujitsu-ScanSnap ... i+snapscan
Fujitsu iX500 ScanSnap Document Scanner + EverNote (FREE)
https://www.amazon.com/Fujitsu-ScanSnap ... i+snapscan
Last edited by Hawaiishrimp on Wed Jun 21, 2017 8:30 pm, edited 1 time in total.
I save and invest my money, so money can make money for me, so I don't have to make money eventually.
- masterofinvesting
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Re: Best Practices for Managing Paper Receipts
+1000Hawaiishrimp wrote:Thank me later.
Fujitsu iX500 ScanSnap Document Scanner
https://www.amazon.com/Fujitsu-ScanSnap ... i+snapscan
- climber2020
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Re: Best Practices for Managing Paper Receipts
I have a small garbage can that only gets filled and emptied about once every 3-4 weeks. The contents are mostly paper. All my receipts go in there. If I ever see any problems with a purchase, which hasn't happened in over 10 years, then I plan on retrieving the receipt from the garbage can. I buy almost everything online, so it's rare that I need a physical receipt.
The few receipts I have for items where there's a moderate likelihood of actually needing proof of purchase (like my lawnmower) live in a small plastic thing that hangs on my refrigerator.
The one receipt I will keep for life is the one I got when I dropped off my cable box at Comcast. It's in a little container at work in case those scavengers try to charge me $500 ten years from now for "unreturned equipment."
The few receipts I have for items where there's a moderate likelihood of actually needing proof of purchase (like my lawnmower) live in a small plastic thing that hangs on my refrigerator.
The one receipt I will keep for life is the one I got when I dropped off my cable box at Comcast. It's in a little container at work in case those scavengers try to charge me $500 ten years from now for "unreturned equipment."
Re: Best Practices for Managing Paper Receipts
alexcr, you might want to take a look at this recent thread:
viewtopic.php?f=2&t=221135&hilit=receipt%2A
viewtopic.php?f=2&t=221135&hilit=receipt%2A
Gordon
Re: Best Practices for Managing Paper Receipts
Only paper receipts we keep are HSA, which get stuffed into a file folder (we keep a spreadsheet with the detail). This risks of audit on this are small and if we had to prove the amounts on the spreadsheet it could be done with the file folder.
As for other paper receipts, we have zero. We inspect the credit card statement before we pay, and for our lifestyle and resources spending time to save receipts and compare to statements is not a good use of our time. There may be some outliers, but my sense it that it is very very rare for there to be any material problem with credit card reconciliations (and if the waitress took an extra $5 from me and I didn't catch it so be it).
As for other paper receipts, we have zero. We inspect the credit card statement before we pay, and for our lifestyle and resources spending time to save receipts and compare to statements is not a good use of our time. There may be some outliers, but my sense it that it is very very rare for there to be any material problem with credit card reconciliations (and if the waitress took an extra $5 from me and I didn't catch it so be it).
Re: Best Practices for Managing Paper Receipts
Any receipts I receive go immediately to the trash can. 90+% of my dollar value transactions are digital and the remainder aren't large enough to matter.
If it's actually important, I ask the retailer for a copy. About the only receipts I retain are my W2 and annual 1040.
If it's actually important, I ask the retailer for a copy. About the only receipts I retain are my W2 and annual 1040.
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Re: Best Practices for Managing Paper Receipts
I scan receipts from the doctor's office for HSA reimbursable expenses, day care invoices, and charitable donation acknowledgments. No paper. Can't think of anything else.
Re: Best Practices for Managing Paper Receipts
Thank me later.
Fujitsu iX500 ScanSnap Document Scanner + EverNote (FREE)
https://www.amazon.com/Fujitsu-ScanSnap ... i+snapscan
$444 for a scanner?
your smartphone can do it for free w/ any one of a number of free pdf scanning apps.
I scan receipts for things of value w/ a warranty (TV, fridge, washer, tools etc). Store in online storage uploaded directly from my phone once the receipt is scanned.
Similar for any paperwork I need (mortgage refi etc)
Long is the way and hard, that out of Hell leads up to light.
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Re: Best Practices for Managing Paper Receipts
Many receipts are printed on thermal paper. In time, they will fade to nothing. If you're keeping if long-term, like a major purchase receipt, I suggest you scan it to get a permanent copy.
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Re: Best Practices for Managing Paper Receipts
+1. Evernote, in fact, has a free companion scanning app which is one of the best out there, imho.F150HD wrote:Thank me later.
Fujitsu iX500 ScanSnap Document Scanner + EverNote (FREE)
https://www.amazon.com/Fujitsu-ScanSnap ... i+snapscan
$444 for a scanner?
your smartphone can do it for free w/ any one of a number of free pdf scanning apps.
I scan receipts for things of value w/ a warranty (TV, fridge, washer, tools etc). Store in online storage uploaded directly from my phone once the receipt is scanned.
Similar for any paperwork I need (mortgage refi etc)
Scannable by Evernote
https://evernote.com/products/scannable/
I dumped Evernote this year but I still use Scannable. (I don't know if they have an android version or not.)
I've been scanning receipts since 2014. I keep back ups on the cloud and on my HD (HD also gets backed up multiple times as matter of SOP).
OP: My wife and downsized in 2014 and I was amazed at the boxes and boxes of receipts, statements and other paperwork we'd accumulated and had to dispose of properly. Ugh! So I decided to go completely paperless since then and I remain happy with my decision.
If you ultimately decide to scan your receipts, come up with a good filing or search system to easily retrieve a receipt when you need it. Also, may I suggest you not use a proprietary "receipts" app. At least that's my opinion. I would worry that the app becomes defunct and you may have trouble retrieving your receipts from their cloud or exporting to a new system. And I'm not sure I want a small time app developer with all my receipts anyway. Instead, scan them in a standard format (PDF, png, jpg) and store them according to your preferences.
Re: Best Practices for Managing Paper Receipts
I save business receipts in a folder until tax time, and then for about 7 years. I save large HSA receipts for future reimbursement. I do not save general personal receipts, but most are from Amazon.com and are well documented online.
gasdoc
gasdoc
Re: Best Practices for Managing Paper Receipts
take a picture with smartphone - auto upload to google photos and once a month or so put them in a file folders. (I use medical, taxable, and big items) done
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Re: Best Practices for Managing Paper Receipts
The presumption in my household is that any piece of paper that enters the home goes straight into the trash can (sometimes with a pass through the shredder) unless there is a very compelling reason to keep it, in which case it gets scanned and then immediately shredded. So far, usual suspects for scans are bank statements, tax forms (these are the one exception to the shred immediately rule, they get kept in a physical file), medical summaries and bills, and very large purchase receipts (e.g. Not your normal grocery store or Best But receipt). The ones I keep get scanned, OCR'd, and uploaded to the cloud where they're all dropped into a folder called "filing cabinet." I don't even bother separating them out into separate folders. If I need something, I sort by date or just search the text of the files themselves.
I've started using the "Scanbot pro" app on my phone for simple scanning ($10), plus a portable scanner like the Fuji someone mentioned for scanning at home.
I've started using the "Scanbot pro" app on my phone for simple scanning ($10), plus a portable scanner like the Fuji someone mentioned for scanning at home.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.
- House Blend
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Re: Best Practices for Managing Paper Receipts
Virtually any tax deduction you claim requires documentation (if audited). Regarding the case of charitable donations,alexcr wrote:3) Related to the prior question, when and how are receipts useful when it comes time to file your taxes? (For example, is it necessary to have receipts for everything in case you're audited?)
4) Is having a bank card or credit card record of a transaction a sufficient substitute for having a full-blown receipt?
And for cash contributions over $250, the requirements are a bit more stringent--you must have "an acknowledgment of your contribution from the qualified organization or certain payroll deduction records."The IRS wrote:You can't deduct a cash contribution, regardless of the amount, unless you keep one of the following.
1. A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Bank records may include:
a. A canceled check,
b. A bank or credit union statement, or
c. A credit card statement.
2. A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution.
3. The payroll deduction records described next.
See Pub. 526 for details.
Re: Best Practices for Managing Paper Receipts
Just want to thank everyone for their responses here. Reading about the different approaches folks take has been really helpful!
Re: Best Practices for Managing Paper Receipts
Let me know how it's going when your scanning 2 years worth of statements with your smartphoneF150HD wrote:Thank me later.
Fujitsu iX500 ScanSnap Document Scanner + EverNote (FREE)
https://www.amazon.com/Fujitsu-ScanSnap ... i+snapscan
$444 for a scanner?
your smartphone can do it for free w/ any one of a number of free pdf scanning apps.
I scan receipts for things of value w/ a warranty (TV, fridge, washer, tools etc). Store in online storage uploaded directly from my phone once the receipt is scanned.
Similar for any paperwork I need (mortgage refi etc)
The scansnap is one of the best purchases I have ever made.
-
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- Joined: Mon May 29, 2017 5:47 pm
Re: Best Practices for Managing Paper Receipts
Oh my! Now you've made me wander into the weeds.House Blend wrote: Virtually any tax deduction you claim requires documentation (if audited). Regarding the case of charitable donations,
And for cash contributions over $250, the requirements are a bit more stringent--you must have "an acknowledgment of your contribution from the qualified organization or certain payroll deduction records."The IRS wrote:You can't deduct a cash contribution, regardless of the amount, unless you keep one of the following.
1. A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Bank records may include:
a. A canceled check,
b. A bank or credit union statement, or
c. A credit card statement.
2. A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution.
3. The payroll deduction records described next.
See Pub. 526 for details.
I use a "notes" method of storing digital receipts where each receipt/event gets its own note. I'll use a charitable donation as an example:
Say I make a $500 donation to one of my favorite charities (which I will shamelessly plug here).
http://www.sheldrickwildlifetrust.org/
- I make a new note using iOS notes (or you can use Evernote, etc):
500.00 - The David Sheldrick Wildlife Trust - Charitable Donation - June-26-2017 - In the note body, I copy/paste or enclose any digital attachment from the foundation, bank, cc, etc. It may be an email receipt of payment, a screen shot, whatever.
- I then file the note in a general receipts folder I've made in the notes app.
- I record the transaction on my yearly expenses spreadsheet where I have a receipt cell. There, I copy and paste "500.00 - The David Sheldrick Wildlife Trust - Charitable Donation - June-26-2017" from the note header. This makes it easy to find later. [1, 2]
- When I receive the acknowledgement letter from The David Sheldrick Wildlife Trust, I locate the receipt by looking for it by chronological order in the receipts folder or search for the unique title: "500.00 - The David Sheldrick Wildlife Trust - Charitable Donation - June-26-2017." I then add a scan of the acknowledgement letter to the note so that everything regarding the transaction in one place (i.e., body of the receipt note).
This method works well for me—especially for anything complicated like getting a refund after the fact, or adding something to the original transaction later. I have a terrible memory for details and this has really helped me trace receipts and refresh my memory for warranty purchases, follow ups, etc.
Sounds complicated but depending on the transaction, it only takes anywhere from less than a minute to a few minutes. And obviously, I only do this for receipts I need to keep, not for a $27 grocery bill.
I know some people are going to roll their eyes at me for this. Why so much work? Fill in your own psychological analysis here: ____
[1] I used to file receipts in Evernote and include a hyperlink to the note/receipt in my expenses spreadsheet. That was very convenient. Just click on link to see a web representation of the note/receipt. But Evernote is limiting the free version more and more by the day and I also grew a little concerned about Evernote's security and having my receipts somehow becoming searchable by a spider. So I exported and deleted the notes and I now store them locally.
[2] Another little trick I found during my research for a "hyperlink to receipt" solution is that with apple mail, you can create a link to an email by dragging the hyperlink in the email header to the notes app. From there you can copy/paste it anywhere (as in your expenses spreadsheet, notes field in a receipts database, etc). Click on it and it will go to the email—even if it's been moved into another email folder. You may have have seen this in action when you make a calendar event from an email (the hyperlink is included in the event). The same hyperlink approach can be used with Dropbox, google drive, and many other services. Just depends on what you like and whether you trust that cloud solution with your personal data and security. Personally, I would never upload personal information to any free service like google. But that's just me.
Re: Best Practices for Managing Paper Receipts
I have file folders for tax and HSA related receipts. Everything else goes into an envelope. I keep the envelope for about 3 months in case I need to make any returns. After 3 months it gets thrown away. So I have 3 envelopes in rotation, but they just sit in a desk drawer 99% of the time. It's rare that I need to go back that far for a receipt, but it has happened.
Re: Best Practices for Managing Paper Receipts
I find it helpful to segregate receipts related to tax filings -- like charitable donations, medical expenses, Schedule E expenses etc.- anything where there is a paper trail for an entry on the tax form.AntsOnTheMarch wrote:I then file the note in a general receipts folder I've made in the notes app.
For each summarized tax entry I keep a spreadsheet that reconciles the to the entry and the PDF of the receipts are kept together.
I have had a couple of IRS examinations where documentation was requested for some line items. The ability to provide a recon along with the receipts quickly came in handy. The inquiries normally give you 30 days to respond but that is typically from the date of the letter. In practical terms, you often have only 20 days to respond. Hunting these down years after the fact would not have been pleasant.
All of this is kept in an electronic folder assigned to the tax year for the filing. That way I only have to look in one place to respond to IRS letters. This could be done in Evernote with folders and tags. I just use my Windows folder system.
Stay hydrated; don't sweat the small stuff
Re: Best Practices for Managing Paper Receipts
We bought a NeatConnect scanner (the one that doesnt need to be hooked up to a computer). Scan and send to a cloud drive. Once a week I go in and organize them neatly into folders and subfolders.
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Re: Best Practices for Managing Paper Receipts
I used to do the same in Evernote but abandoned the practice and moved everything into one folder because I find searching to be effective enough. By including unique "search text" or a link to each spreadsheet entry, I can find the receipt instantly. So if I look under charitable donations on my 2016 budget/income/expenses spreadsheet and I see that there 7 detailed entries, each entry has its own unique search text in the notes field. That search text will easily find that receipt—which I can print out, make a PDF of, email etc. At least that the theory, and so far it's worked.jebmke wrote:I find it helpful to segregate receipts related to tax filings -- like charitable donations, medical expenses, Schedule E expenses etc.- anything where there is a paper trail for an entry on the tax form.AntsOnTheMarch wrote:I then file the note in a general receipts folder I've made in the notes app.
Instead of unique search text, a hyperlink can be used but that can have security issues (mentioned in my previous post) plus a link can break if the receipt is moved. With anything digital, I assume that migration of data will be necessary sooner or later. For anything that needs to be kept many years (a decade? more?)—such as medical receipts for future HSA use—it's probably not bad idea to hold onto the paper receipt—or at least be mindful of technology trends to make the digital migration down the road smoother.
* All these are my personal opinions. Best practices according to no one but me, for my situation and personality type. Although the OP asked about paper receipts, I think that a few people at least might be wondering about going digital, so I hope this is on topic.
Re: Best Practices for Managing Paper Receipts
Thanks, I'll do that!buckstar wrote:
Let me know how it's going when your scanning 2 years worth of statements with your smartphone
The scansnap is one of the best purchases I have ever made.
For the average Joe the smartphone route works great. For a business scanning everything to go digital, probably not so much.
Long is the way and hard, that out of Hell leads up to light.
Re: Best Practices for Managing Paper Receipts
Old guy here but wanted to mention keeping multiple credit cards for different stuff. I traveled a ton for work and had one credit card I used exclusively for company travel stuff. Then I kept those receipts in a separate envelope in my briefcase and checked them against the bill as needed when I filed for reimbursement. This made keeping track of travel and status of my company reimbursement funds easy.
I also keep a separate credit card for use only on the internet to buy stuff. This means if it gets hacked (which happens about once a year) we just close that card and get a new number.
Then my wife and I have different credit cards that we use for shopping. So she gets a bill for her stuff I get another bill for my stuff. This makes keeping track of credit card bills easier.
And yes we also keep all our paper receipts and check them against the statements. Then we keep the statements. I use those statements every year to find some tax deductions I missed. And yes this is a PIA. But I find keeping this paper easier than going paperless and taking photos of all those receipts.
Good Luck.
I also keep a separate credit card for use only on the internet to buy stuff. This means if it gets hacked (which happens about once a year) we just close that card and get a new number.
Then my wife and I have different credit cards that we use for shopping. So she gets a bill for her stuff I get another bill for my stuff. This makes keeping track of credit card bills easier.
And yes we also keep all our paper receipts and check them against the statements. Then we keep the statements. I use those statements every year to find some tax deductions I missed. And yes this is a PIA. But I find keeping this paper easier than going paperless and taking photos of all those receipts.
Good Luck.
Re: Best Practices for Managing Paper Receipts
I'm in the ScanSnap club. It's worth it if you care about your time.
Paper documents worth keeping go in two piles -- "Scan then Shred" and "Scan then File"
After scanning, filed documents go a couple ways:
. Medical receipts that have not yet been reimbursed from HSA go into "HSA Reimbursable" file
. Tax related receipts go in the yearly tax file
. Other receipts go into a 12 pocket expanding file, by name of vendor. A new expanding file gets created every year. Files are emptied and reused after 7 years.
Paper documents worth keeping go in two piles -- "Scan then Shred" and "Scan then File"
After scanning, filed documents go a couple ways:
. Medical receipts that have not yet been reimbursed from HSA go into "HSA Reimbursable" file
. Tax related receipts go in the yearly tax file
. Other receipts go into a 12 pocket expanding file, by name of vendor. A new expanding file gets created every year. Files are emptied and reused after 7 years.
Re: Best Practices for Managing Paper Receipts
Here's what I do. I have three folders, one for tax-related receipts, one for business receipts, and another for personal receipts that exceed $50. For the last folder, I toss out the receipts once I've checked that the credit card statements are accurate. There's no reason to keep those.
At tax time, I scan only those receipts that I ended up using on my tax return and which I need for documentation. And then I toss out everything in the folders. So immediately after tax time, all folders are empty.
At tax time, I scan only those receipts that I ended up using on my tax return and which I need for documentation. And then I toss out everything in the folders. So immediately after tax time, all folders are empty.
- FrugalInvestor
- Posts: 6213
- Joined: Thu Nov 06, 2008 11:20 pm
Re: Best Practices for Managing Paper Receipts
Anything medical related goes in tax file along with EOBs and related documentation.
Big ticket purchases and/or anything with warranty goes is household equipment file along with manuals and other related documentation (just recently got full refund on 3-yr-old problem fridge with extended warranty - documentation was important). The thermal receipts to fade so often keep photocopy instead of original.
Receipts for merchandise to be returned locally gets attached to merchandise and set somewhere that we will trip over it. (side note: one of the many nice things about Costco is that have all receipts attached to your member number in their system so no paper receipt necessary unless you just want to double-check them).
Balance of receipts are put in piles by CC and checked off statement before paying (Yup, still do that. Nope, errors are as scarce as hen's teeth). They are then tossed unless there's some reason to believe the item could be returned in the future.
Big ticket purchases and/or anything with warranty goes is household equipment file along with manuals and other related documentation (just recently got full refund on 3-yr-old problem fridge with extended warranty - documentation was important). The thermal receipts to fade so often keep photocopy instead of original.
Receipts for merchandise to be returned locally gets attached to merchandise and set somewhere that we will trip over it. (side note: one of the many nice things about Costco is that have all receipts attached to your member number in their system so no paper receipt necessary unless you just want to double-check them).
Balance of receipts are put in piles by CC and checked off statement before paying (Yup, still do that. Nope, errors are as scarce as hen's teeth). They are then tossed unless there's some reason to believe the item could be returned in the future.
Have a plan, stay the course and simplify. Then ignore the noise!