The Best Way to Organize Receipts
Quick and Easy Receipt Organizing Systems
Do you spend too much time trying to find a receipt to return an item? Are you ready for tax time, or is it a scramble to make it in time for April 15? If you are like me, you may be tempted to just let receipts pile up until they are an unsortable mess. That is why the best way to organize receipts is to keep your system:
- Simple to remember.
- Quick to file papers.
- Easy to find what you need.
Keeping these three goals in mind will help you to use the following 4 easy steps to create a system which works for you.
Step 1: Choose a System
No filing system is perfect. You always have to weigh the cost of having a detailed system which makes receipts easy to find with the time it takes to file those receipts. Here are four different systems with the pros and cons of each.
With a binder that has index cards to separate receipt types, you can easily find what you need. This system works best for people who often go back and look at receipts because you can easily flip back and forth to different sections and because the binder keeps the papers in order. If you always file new papers either at the front of a section or the back, you can quickly look through the receipts chronologically.
I used this system for organizing the receipts of my husband’s parents when he had guardianship over them because we were required to make regular reports on their income and expenses, and I needed to be able to find receipts easily.
Binder Pros and Cons
Takes the most time to file
Easiest to keep files in order of the month.
Best for receipts you need to refer to often
Neat and easy to keep on a bookshelf.
Limited by the size of the notebook, or you can use more than one.
Example of Binder Organizing Receipts
File Folder System
The file folder system is the easiest and fastest system to use, so you have a better chance of actually keeping things organized. After falling 6 months behind in filing my notebook system for our family receipts, I finally decided to go back to file folders. I put unfiled papers in the front and generally put them in place when that front area is filled or about once a month.
Hint: keep papers you know you will need later in a file together. I put all my tax information, including charity contributions, in one file.
File Folder Pros and Cons
Inexpensive and simple.
Just need file folders and file cabinet or box.
Fast to file.
Expandable to any size and number of files.
Harder to find a paper than Notebook System.
Expanding File System
Grab an Expanding File that has sections and tabs for a smaller organizing project. If you are a student with just a few types of receipts, or if you want to organize receipts from a project like a house renovation project, this is a great way to do it. I also used an Expanding File System for all the paperwork for our adoption and I often use a small expanding file for vacation plans.
Expanding File Pros and Cons
Keeps everything in a neat, portable file.
Great for organizing receipts you want to keep permanently.
Good for small batches of papers.
Doesn't work for lots of papers.
What is your biggest need in organizing receipts?
Digital Organization System
I’m starting to go paperless, and you may be too. Lots of companies want you to "go paperless" and may give you a bonus to do so. You can scan receipts that aren't digital. In fact, I just bought a hand scanner because I'm hoping to move toward putting all my file folders on my computer. However, you will still need to remember:
- To spend some time creating files and organizing these on your computer so you can find the documents you need.
- Computer viruses or computer meltdowns can interfere with your system, so make sure you have your receipts on a computer which has a cloud back-up such as Carbonite.
Digital receipts can relieve a lot of headaches in filing papers, but only if you are careful. You should be sure to actually download receipts of any important statements you might need later since many companies only keep a 12-month record of your statement receipts. For example, when I went to file a Credit Card Extended Warranty claim on a broken dishwasher, they required our original statement from 15 months previously. It wasn’t available anymore online, but luckily I had a paper copy.
If you go all digital, avoid problems if you download your statement receipts as you pay them, or at least keep the end of the year receipts.
Digital Pros and Cons
No paper mess to worry about.
Easily find your files on your computer.
Print out only the ones you need.
Keep records as long as you want.
Easiest if you also pay bills and do banking online.
If you invest in a hand scanner, you can digitize paper receipts easily too.
Keep Receipts for
Returning an item to a store
Resale of an item, including home resale
Step 2: Decide What Receipts You Need To Organize
Remember there is a difference between keeping and organizing. You don't need to organize every receipt you get, even if you do decide to keep them. What you will want to organize are receipts you will need to retrieve later for taxes, returning items or keeping track of expenses.
Trash Receipts you Don't need.
You will save yourself a lot of time and trouble if you just throw away receipts you know you won't need again, or which you know you can access online. If you can't think of a reason you would ever need it, you probably won't, so throw it away!
"Trash File" is a Way to Organize Too!
If, like my husband, you can't quite bring yourself to throw a receipt away, then do yourself a favor and create your very own "trash" file box. We have one. It is a plastic bin that sits above my receipt files. Anytime I'm just not sure whether I should throw something away, I toss it in. 99.9% of the time, the trash bin gets thrown out untouched at the end of the year. For those few times I have needed a receipt, the time it has taken to find it is far less than it would have taken to organize them all.
4 Step Organizing for Taxes
Step 3: Create Your Organizing Files
Don't get tricked into too much work on this step. You want categories which are broad enough that you can re-use this system every year, yet narrow enough that no single file will be so crammed that you can't find a receipt you need. Here are the categories we use:
- Business Expenses
- Contributions (donations for tax purposes)
- Credit Cards
- Medical and Dental
- Wages and Retirement
- Warranties (on items purchased)
Step 4: Use Your File System and Adjust
After you have your files labeled, then take the receipts you have and put them in the folders. As you use your system, you may need to make some changes like adding another folder, or switching to a different filing system. Recently, I switched back from using notebooks, to using file folders again because I found I wasn't keeping up with filing my papers often enough.
How often should you file your receipts? If you file them as you get them, that's best. However, if you are like me, you may be too busy to do that every day. So, I usually have a spot in front of my folders where I put new receipts. Then, when I can't fit any more in, I know I need to file them. Generally, that means about once a month.
Keep Receipt Organizing Simple
The key to organizing your paperwork effectively is to not make it too complicated and to keep to the same system every year. That way, you will be able to automatically file things and retrieve them easily when you need them. It only takes about an hour to set up this system, and it is certainly worth the many hours it will save you in sorting through papers.
Do you have any other ideas for organizing receipts? I hope you will share with us in the comments!