Sometimes, it’s not enough just to “keep track” of business expenses in a spread sheet or log, it is normally a good idea to keep evidence for your business expenses and this usually means receipts. Here is some basic information that you should know about saving receipts for your home business–
Many banks no longer send out your actual cancelled checks. Even though this is no longer the norm, you should still save copies or records of checks that you write. Many banks now send out a photo copied record of “mini-checks” and this should be part of the receipts you save. Other receipts for purchases or expenses, including gas, hotels, supplies, equipment, etc. should also be kept with your business records. Make sure that the receipt has the date of the purchase on it (you may need to write this in yourself in ink, if it is not printed on the receipt) and you can clearly tell what the expense was. Again, you may need to write this on the receipt, if you can’t tell from what is printed on it. For a business meal receipt, it is a good idea to write down the gist of the meeting, and you might even write down who else was in attendance on the back of the receipt.
Save both cash and credit card charge receipts. If you are keeping a diary or log, these will also serve as good records of expenses (if you write down any traveling or other expenses in the log–including costs, meeting details, and purchases made.)
If you do entertaining for your home business, it is a good idea to check with your professional tax preparer or the IRS to find out current requirements for saving receipts and documenting things like tips and entertainment costs that are used for your home business. These can be a little more tricky.
As a general rule, it is a good idea to save every receipt pertaining to your home business, and make sure it is well documented and decipherable as to what it was, when it was, and any other important details.