Do expense receipts give you a headache? Keeping track of receipts can be a pain, but it’s a critical part of the nonprofit accounting and auditing process. Receipts help to corroborate reimbursements, match expenses to your bank records, and reconcile your credit card statements. Unfortunately, it’s also easy for receipts to get lost, damaged, or misplaced. This can cause problems when it comes to your accounting records.
One solution is to invest in an all-in-one expense management system such as Expensify. The time savings alone can make it well worth the cost for large or complex organizations with many expenses to track. But if your nonprofit is smaller or on a tighter budget, there are plenty of other ways to streamline your expenses and keep track of receipts.
Digitize Everything
When you receive a paper receipt, the first thing you should do is scan or photograph it as soon as possible. Small, fragile receipts – like those from restaurants or parking garages – have a habit of getting lost or damaged. Make sure you have a digital record just in case! You can use your smartphone to photograph receipts, and there are many free apps designed to help track business expenses on the go.
Get Organized
To avoid the month-end scramble, keep all of your receipts in the same place. For physical receipts, this might be an envelope or desk drawer. For digital receipts, you can designate a specific folder on your computer or email account. Label your receipts by date, amount, and vendor name, and keep them organized in chronological order. This makes it easier to match up your receipts with statement charges.
Take Notes
Keep a detailed record of the purpose of each expense, and always obtain an itemized receipt, especially if the expense might include multiple budget categories. For example, let’s say you went to the store to purchase snacks for an upcoming board meeting. But while you were shopping, you also remembered that the office was running low on cleaning supplies, and your fundraising department needed extra decorations for next week’s charity auction, and tomorrow is your assistant’s birthday, so some cupcakes in the staff break room might be a nice gesture…and so on. Take notes to help you remember what each purchase was intended for, and break down large expenses by line item. This will make your budgeting more accurate and your accounting more efficient.
Don’t Procrastinate
For busy nonprofit professionals, this is easier said than done! Expense tracking often falls to the bottom of the priority list. Unfortunately, the passage of time makes it harder to manage your receipts and can cause even more work for yourself down the road. If you’re missing an important receipt, it’s easier to obtain a replacement sooner rather than later. And if a fraudulent charge appears on your credit card statement, you’ll want to catch it immediately. Memories fade, receipts go missing, and the longer you wait, the more difficult it will be.