Why should I care?

Tracking receipts (and therefore your expenses) is not only a VITAL skill for a entrepreneur BUT it also helps optimize your life.

If you track your receipts, I guarantee you will end up with more money at the end of the month.

Even if you don’t, having a detailed receipts tracking system will allow you to maximize your tax deductions on your current or future business.

As a bonus, having a detailed record of your purchase habits can save you a TON of money in future legal battles.

Record, track, optimize.

NOTE: even if you use Mint, save your bank account statement, etc, you STILL want to save all of your receipts. There is data on your receipts that simply is not currently available yet via electronic statements and e-receipts.

Introduction

Today I am going to go over how I record and track my receipts.

The process is fairly straightforward if tedious.

Anywhere I make a purchase (cash or card), I ask for a receipt. I then keep those receipts in either my wallet or a dedicated sandwich bag until I get near a scanner. I then scan all the receipts as individual .pdfs. All scans are saved to specific folders in my Google Drive.

This allows me to not only have a EXTREMELY detailed record of my spending habits, it also helps when it comes to tax season, legal issues, etc.

Regularly tracking your receipts does take some dedication. I personally cannot wait until all receipts are emailed and/or saved digitally BUT until that day happens this is the most effective process.

Step 1: Get in the habit!

Asking for a receipt every time is a habit that will take some time to build. As systems slowly become more and more “e-friendly”, people are asking for receipts less and less. This means that places like Starbucks and other large retailers are not offering receipts automatically. This means you have to ask and sometimes ask twice.

Even at establishments that offer to email receipts, I still get a physical receipt due to some systems not offering the same information that appears on their physical receipt.

Of course, you will get some dirty looks from the tree huggers. It’s not worth the argument but with a little research you can easily see that receipts are the least of our concerns when it comes to global warming issues.

Step 2: Make notes!

After you get the receipt, make sure to make notes on the receipt with a pen. Important notes are people you are with, what you paid as a tip (especially if you paid via card and left a cash tip), and any other important details such as what was the purpose of the purchase, was it for business, what business, etc.

Step 3: Save the receipt!

If you travel like I do almost constantly, you will have some considerable time in between scanners. This means you will quickly build up a pile of receipts too big for the average wallet.

To get around this, I keep a sandwich bag (waterproof) in my backpack solely for my physical receipts.

I make my notes, stick the receipt into my wallet and then as soon as I get back to my backpack I stick it in my “receipt bag”.

Step 4: Scan it in!

There are good “mobile” scanners on Amazon for anywhere from $50 to $200. However, I find the best option for both price and quality is to buy a super cheap printer with an actual scan deck.

I routinely find $29 printers at Amazon or Walmart that easily outperform my $100+ mobile scanners. The quality of the PDF is better and I can print a document if I need to.

As of the time of this writing, I think mobile scanners are just not “there” yet so you are better off buying a super cheap printer with a scanner. If I change my mind, I will update this training.

Step 5: Name the PDF!

The naming structure is EXTREMELY important as this is how you will lookup the receipt when you need it in the future.

After repeating this process for over 3 years (and thousands of receipts in storage), here is the system I use.

First, you want to include the timestamp.

I use YEAR-MONTH-DAY.

Example: 2018-01-05.pdf

Next put the BUSINESS NAME CITY STATE.

Example: 2018-01-05 Joes Pizza Los Angeles CA.pdf

Next describe your activity using keywords that you will be able to search later.

Example: 2018-01-05 Joes Pizza Los Angeles CA dinner for gabe and xyz client discussing project x.pdf

Last put the the total amount (including tip if needed).

Example: 2018-01-05 Joes Pizza Los Angeles CA dinner for gabe and xyz client discussing project x 106.43.pdf

You always want to include the date first and the total amount last. What you put in between depends on how important the event was for tracking and/or tax purposes aka be more detailed the more important it was.

Step 5: Upload to Google Drive

After we have scanned and saved our receipt (I prefer saving in .pdf format over .jpg or .png), the last step is to upload the receipt to Google Drive.

The reason I use Google Drive is because I am almost constantly moving and keeping the receipt locally on my computer is very risky (due to bags being stolen, devices breaking, etc).

You can get unlimited personal Google Drive storage for $9.99USD per month as of the writing of this training. According to my sources, this price should go down soon.

You can either login to Google drive on your browser (drive.google.com) or use the desktop application (available for Mac and Windows) to upload the .pdf files to your Google Drive.

To design your storage, I suggest using a top level folder called “Receipts | Master”.

You should then create a sub-level folder for each category. Example is “XYZ | Receipts | Master”. Some categories include Clients, Restaurants, Coffee, Fast Food, Groceries, etc. If you buy a lot of a particular category make sure it has its own folder.

For example, I buy a lot of gadgets from Frys so I have multiple folders just for Frys such as “XYZ Client | Frys” and “ Gaming | Frys”, etc.

Google Drive allows unlimited folders to be created. The more you segment out your receipts the easier it will be to spot patterns and optimize spending.

The End / Recap

After testing this method for over 3 years this is currently the most effective strategy for both searching and sorting through thousands of receipts that I have discovered.

HOWEVER, I would love to know your thoughts, feedback and testing variations. PLEASE share as I am a total nerd about this stuff and love to test new ideas.

I can’t wait to see the impact you have on our world!

– Gabe