Get Organized!: Bills, Expenses, and Receipts

Don’t get too excited, I’m not about to give you all kinds of financial advice on saving money or doing taxes as an independent music teacher. (I figure we have our dear Wendy Stevens at Compose Create who has shared a lot of great stuff like that over the years. 🙂 )

I’m going to stick with my strength and talk to you today about organizing and managing your incoming bills, expenses, and receipts. Yea!

Let me introduce you to the best thing that has happened to me in our daily financial management process and that’s my file folder system.

It’s not complicated and it makes ALL. THE. DIFFERENCE.

Isn’t she beautiful? 🙂

First, a little back history on the straw that broke the camel’s back and made me come up with this system.

 

Quicken

My husband and I have used Quicken for years and love it. If you’re not familiar with the program, it’s like a check register for all your finances in one place including loans, 401k’s, credit card bills, checking, and savings accounts. We manage both our personal and my business finances through this.

Budgeting has been important to us through our entire marriage and Quicken has a lot of tools to help you track expenses and manage a budget properly. If you keep up with it on a regular basis, keeping expenses categorized makes life a whole lot easier when it comes time to do taxes as well.

 

The Breaking Point

Over the years, my husband and I have taken turns being the main person responsible for managing bills and finances. Don’t get me wrong, we are both 100% aware of everything, but someone has to be proactive on a regular basis.

When we were first married, I took care of it. Then, when I went to grad school, he did. After that, we went with more of a “together” approach. Every few months we would sit down together and wrangle through things.

He would download all transactions into Quicken and I would go through the receipts. Together we would categorize all transactions for personal budgeting and business tax purposes and double-check we had hard-copy receipts for ALL business purchases.

(On a side note, I keep email receipts for a lot of things as well but am definitely still big on having hard copies of every business expense. When I purchase something online, I immediately send the receipt to the printer so I don’t have to go back and dig through emails later.)

For years we would just throw all our receipts in a tray on our home desk. Once our house-build started, this became a disaster and we both dreaded sitting down to do finances to the point that we would put it off – making it even worse.

Drew had too much on his plate, literally, trying to build our house on nights and weekends while working a 40-hour job, so I stepped in as I just couldn’t bear to continue in the state it was in anymore!

(Just to clarify, when I talk about things being a disaster, I’m not necessarily talking about personal finances, I simply mean our day-to-day tracking of expenses for budgeting and tax purposes.)

 

Getting it Under Control

It took me months to finally get our finances organized again which included two major things:

1. Sticking with a consistent weekly routine of sitting down, downloading and categorizing transactions, checking receipts, and reconciling our accounts once a month.
2. Keeping all paper receipts and bills organized using this file-folder system I’m showing you today.

For the first point, it took a few years to get in a good habit and find a routine that worked for me. I dabbled in frequency and different days of the week but ultimately found the best routine was to dedicate approximately one hour every Monday morning. It’s literally part of my weekly schedule.

Find what works for you and stick with it – be consistent!

The second major thing is the whole reason behind this post.

As I said earlier, our receipts would pile up for weeks (or even months) to the point they felt overwhelming and unmanageable. So, I found a way to sort things into more easily-consumable files.

 

The File Folder System

My file system consists of 16 folders.

1. Paper bills
2. Personal receipts
3. Monthly recurring business receipts (S88 is my business = Studio 88)
4. Tax documents
5. Then…one folder for each month of the year (business receipts).

 

 

#1 Bills

Paperless bills are not something I am yet prepared to do to save the environment (but I do recycle a lot 🙂 ). I like seeing that hard copy in the mail.

The bill gets opened immediately and the due date and amounts are highlighted. I then place it at the back of the file folder so all bills appear in order of due date so those that are due next are at the top of the stack.

All of our utilities and credit cards are set up on auto-pay which means that every month our bank account will automatically pay the full balance due.

You would think this would be a good reason to go paperless, but it helps me immensely to be able to open up the file folder every Monday with all the bills in order of due date, glance at all those that will be coming out of our checking account that week, and double-check enough funds are available.

P.S. When one-time bills come in, they also go in this folder. I try to only work on these things on Monday mornings. If it comes in the mail on Thursday, I stick it in the file and pay it on Monday.

 

#2 Personal REceipts

This is pretty self-explanatory. Basically, anything we purchase that’s not for my business, the receipt goes in this folder.

Since we budget and thus, categorize all transactions, it’s nice to have all receipts available in case we can’t remember what a particular purchase was. This would also include carbon copies of written checks (they’re not extinct yet!)

Personal receipts get thrown away once they’re categorized in Quicken.

 

#3 Monthly Recurring

This folder is for all business receipts that recur monthly. Some current examples of mine include:

• Apple Storage
• My Music Staff
• Zoom

(B.T.W. I find it so annoying that there are some subscription services – like the $0.99 Apple storage – that don’t let you pay annually.)

Rant over.

The reason I keep them in a separate folder rather than in the month they occurred is that it’s easier at the end of the year when preparing for taxes to go through and check you have a receipt for each month.

That also means I don’t worry about going in and printing a receipt every month when the transaction occurs, I just wait until the end of the year and print them all at once.

 

#4 Tax Forms

This folder is only used from the time tax documents begin coming in until we do our taxes.

When it’s time to sit down and do taxes, I print out things like business mileage and throw it in there and everything is kept together and is ready to send to the accountant.

 

#5-16 / January – December

Keeping business receipts separated by month makes it easy to double-check I have physical receipts for all transactions as they come in.

After taxes are done, I bind each month of receipts together with a large paperclip and place the entire year of business receipts into a large manilla folder.

All tax documents and business receipts are stored in tubs in storage for 7 years.

 

Why Decorative File Folders?

By all means, these file folders could be stored in a file drawer in a basic (and much cheaper) manilla folder.

For me personally, however, having them out on the desk looking me in the face every day, helps me be consistent in my organization and management of them.

If I’m going to keep something like this out on my desk then I want to do it in style! 🙂

Every few years I get tired of looking at the same folders and like to freshen it up with a new set and different color.

Two favorites on Amazon include:

Decorative File Folders (Blue Tones / Floral Design / 24 Pack)

 

 

 

 

Decorative File Folders (Yellow / Geometric Design / 12 Pack)

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Do you have any tips for managing your business receipts and expenses? Share in the comments!