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Keeping track of expenses in any
business can be a very frustrating exercise and even more exasperating for a business that is on wheels and moves to numerous
locations throughout a state and/or country.
Food concession operators face this
challenge each and ever day.
Small expenses such as gas, a refill
of propane, a container of cooking oil or something as simple as a
new mop can, over a period of a year add up to hundreds of receipts
and even more important thousands of dollars.
The use of credit cards does not solve
the problem, as credit card statements do not delineate expenses
sufficiently for tax purposes.
To help solve the challenge of
ensuring that all expenses are properly accounted for requires a two
pronged approach.
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The
first and most important is a commitment by all those
incurring the expenses to follow the procedure that is set
in place to handle the receipts. It is very easy to
apply the procrastinators’ concept of “I will do it later”.
If you apply this attitude, the system will not work.
There must be diligence and a commitment by all those
involved to ensure that the system will work.
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The
second is the system. I highly recommend the use of an
accordion file. Accordion files are relatively small,
inexpensive, reusable and most will fit in a glove
compartment and allow for filing receipts in a somewhat
systematic order. Most accordion files use a number or
other heading to define each of the pockets within the
folder. I recommend that each of the compartments is
labeled with an expense heading. A compartment for gas
receipts, equipment repairs, food and other raw material
expenses, hotel, meals, fuel (if you are purchasing items
such as charcoal or propane) and of course a miscellaneous
category.
The key behind the success of the
system is to ensure that every time a receipt is obtained it is
placed in the appropriate compartment in the accordion folder as
soon as it is received. Placing receipts in wallets, shirt
or pants pockets or leaving it in the store bag with the intent
of accounting for it in the evening will not work. That is
why it is important that the accordion file be placed in a
convenient location such as the glove compartment.
If you can log the expenses into a
computer spreadsheet or other type of accounting system ever
month then you can reuse the accordion file on a monthly basis.
If you utilize the services of a bookkeeper, it may be wise to
use a new accordion file for each and every month. That
will allow you to deliver the receipts to the bookkeeper at year
end in a manner which will allow that individual to easily
compute your yearly expenses, saving you additional expense.
Having a system in place to
properly account for all expenses can save concession operators
hundreds of dollars in tax each and every year.
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