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Quick & Easy Paperless Bookkeeping

Following our Bookkeeping Foundation call I thought to share with you the bookkeeping system that I developed throughout the years, learning from different bookkeepers and accountants. Simply follow the steps below

Collect All relevant receipt in a clean brown paper envelope

Why brown paper? Large envelopes will let you keep the receipt flat and undamaged. Brown paper envelopes will let less light in; therefore, if you miss one week, your receipts don’t fade as much. 

Create the following folders in your computer or cloud

Bookkeeping

2023

Bills

Bank Statements

Invoices

Insurance

Legals & Contracts

PST/GST/HST

The idea is to have the Bookkeeping folder as your top-level folder in your computer or cloud  – Underneath, you will see the year. When you start, this will be just 2023, but as you go on, you will build on this. My bookkeeping folder goes back to 2017, when I created this system, which means that I have access to every single receipt all the way back to 2017 in less than a minute. And that this is a proven system that works.

Adapt the following weekly routine

Now that you have set up your filing system, it’s time to scan and name your receipts. I suggest doing this every week, Monday or Friday. Adapt a Financial Friday or Money Monday process to make this a habit, do this every week, even if you only have one or two receipts to go through. Believe me, it will thank your future self for creating this habit. 

  • Scan each receipt, and name the file in the following format.
    •  mm-dd-vendor name-inv#-cost category—$00.00—GST$0.00—

For scanning, you can either invest in a simple receipt scanner or use your phone to take a clear photo of the receipt. Make sure you have captured everything on your receipt. And the image is clear and readable, as you will be throwing away the receipt after your scanning is done.  

File naming logic

All the receipt files will end up in your Billing folder. That’s why we start with “mm,” which is a two-digit month format. If you do the naming correctly and follow your system of naming vendors, cost category you will soon have a very organized bookkeeping system.  The reason we have everything on the filing name is that eventually when you take the time to add your expenses into your accounting system or spreadsheet, you won’t need to open any file. Just ready the name and enter the cost. For example, if I spend $8.55 at a coffee meeting on Mar 12, 2023 – at XYZ coffee shop for a client meeting the naming should be as follows:

03-12-XYZ-CLIENT MEETING- MEALS ---$8.55---GST$0.40

When I want to enter this into my bookkeeping and accounting spreadsheet, I only need to open the 2023/billing folder and add $8.55 under total expense and $0.40 under GST for Mar 12 in the Meals category. 

Now let’s say in  5 years, I need to find this receipt for any reason. I need to know one of the information on the receipt and quickly will be able to find the receipt. 

GST calculation tip

It is advised to request and keep the receipt that has all the tax information on it. However, in real life, this doesn’t happen. When you have the total and not the GST, use the math below to calculate your paid GST.

Total paid - (total paid/1.05) = GST Value - 1.05 is for 5% GST; adjust this number to reflect your HST or GST amount.