Keeping all receipts would be a waste of time and effort because most personal spending is routine and insignificant. Thanks to technological advancements, there is no longer any need to manage electricity or mobile phone bills. As a result, you can often find complete invoices from the last five to seven years on the company’s website.
However, having physical proof of purchase is advantageous in a few cases. For example, we’ve compiled a list of examples and suggestions for receipt storage, so you don’t have to remember where you put that pesky piece of paper.
Here are some of the reasons why keeping receipts is essential:
1. Proof Of Purchase Is Necessary For Warranty Reasons
Any receipts for large items, such as household items or accessories, should be retained in your warranty files for as long as they are valid. A “warranty” guarantees that nothing will go wrong during a specific time frame. The licensed professional will replace faulty equipment for free throughout the warranty period. Warranties can also cover repairs by a qualified technician.
2. Evidence Of Large-Scale Spending
As long as you own your car, you should keep a file with all receipts for significant expenses. For instance, major home remodeling expenses should be recorded in a house improvements & repairs file. These records will be essential in reconciling your tax records after the house has been sold.
3. Returns and Exchanges
It is nearly always impossible to return an item to a retailer without a receipt. This implies that any damaged or broken clothes, equipment, or other items should be kept with the receipt. For example, if you’re returning an item or giving it a gift, keep the receipt for 30 days or as long as the store’s return policy allows. Some stores only allow 14 days. After that, you can either throw the receipts away or keep them for warranty purposes.
We recommend making space in a letter sorter or a “waiting” folder for these types of pending receipts and emptying it regularly as it fills up. Receipts for return purposes should be separated from more permanent financial paperwork. This allows for easy and regular discard.
4. Expense Reimbursement
You may be attempting to determine how much money you spend on various items. To make future purchases of these items easier, see if your company can provide you with a credit card. A scanner and software designed specifically for this purpose may also be helpful.
Is it necessary to monitor everything now that online banking provides increasing information? Inadequacy may result from failing to enter every receipt into financial software. If you must keep receipts, for this reason, keep them in a simple January-December expandable accordion file.
5. Income Tax Deductions
You may be surprised by the sort of tax deductions available to you. For example, have you paid for any education or training? It’s yours to claim! Was there anything you needed to purchase for your job, such as a uniform? That is something else you might claim! You may be able to deduct expenses such as public transportation and home upgrades, depending on where you reside.
It is recommended that you keep a yearly tax return. Always prepare at least one year’s worth of tax documents ahead of time, so you’re ready when the paper arrives. Make a quick note of any tax-deductible receipts before filing them. Your tax organization may have different needs, but one folder is enough for most households.
6. Commercial Receipts
If you travel on official business or incur expenses on the job, you must keep track of your receipts. Which ones you get is entirely dependent on the regulations of your company. Others may only require receipts for purchases exceeding a specific amount.
For example, many businesses now allow customers to receive electronic receipts via email. If you select this option, you can use your email account to create folders where you can transfer information for future reference.
You may prefer to use an electronic bill payment service, such as Paymentus. This platform allows users to pay billers in real-time using any financing source. It also offers backup solutions based on the cloud. You can access your files even if your computer or hard drive fails.
You may be tempted to throw away your receipt as you leave the store, but the reasons listed above can motivate you to keep it.