How to organize invoices for small business bookkeeping | Remote Quality Bookkeeping

How to Organize Invoices for Small Business Bookkeeping

If you run a small business, how are you storing your invoices? If you’re like most people, they’re either in a box or folder somewhere, or thrown into a digital folder. It may seem like an easy enough task to file them away, but what about when it’s time to do your bookkeeping? Having all the invoices in an orderly fashion can make this process more streamlines, saving time and frustration. Starting a small business can be overwhelming if you don’t have all your ducks in a row. We can help! In the content below, we explore how to organize invoices for small business bookkeeping.


How to Organize Invoices for Small Business Bookkeeping


#1. Collect All Your Invoices in One Place

It’s hard to organize invoices if they aren’t in one designated area. Therefore, the first plan of action is collecting all your invoices and gather them in one place. This can be done by going through your inbox and filing them into the appropriate folder or box, according to how they’re sorted (i.e., auto repairs vs. taxes).


#2. Sort Invoices by Invoice Type

With the quickest step out of the way, your next task is to separate every invoice and combine them by invoice type such as credit card, product, or service. Doing so should make it easier to find invoices for a specific type and place them in their appropriate folders.


For example, if you have an invoice from your credit card company that needs to be filed under “credit cards,” then put this invoice in the box or folder designated as such. If you are unsure how to categorize a given invoice, then set it aside and see how many other invoices of a similar type you have, such as donations. Perhaps, you could create a new category unique to your bookkeeping needs!


#3. Date Every Invoice

This step is critical for any bookkeeping system, especially if you undergo an audit. Therefore, date each invoice with the date it was issued and the date the invoice was paid.


For example:

  • For an invoice issued March 1st and paid March 31st, you would note both dates. Doing so will also help you monitor how much money has been spent on a given product or service.
  • If an invoice falls within a specific month’s finances, then put the invoice in that month’s folder.
  • If a monthly budget spreadsheet is provided for January and an invoice falls within the time frame of November – December but is anticipated to be paid in January, then the invoice should be filed into the January folder to avoid confusion at tax time.


#4. Label Monthly Sub-Folders by Vendor Sending the Invoice

While organizing your invoices by month, there are instances where you need to quickly access a specific vendor invoice. Therefore, create sub-folders for each of your regular vendors for easy access.


Important: This will help with tax time because you can easily find the invoice by date and how much it was for. It keeps invoices organized, so when they are paid, you know where to put them in your system.


#5. Create a Spreadsheet

Creating a spreadsheet might seem like a cumbersome task, but you can find several free templates online or subscribe to a digital bookkeeping platform! Doing so will help you keep track of how much money and how many payments are still due to vendors for goods or services rendered.


Want to make a spreadsheet on your own? Here’s an example on how to format it:

  • Create a sheet titled ‘unpaid’ with columns labeled Date Due
  • For your first column, list the vendor of your unpaid invoices
  • In the second column, type how much is owed
  • In your third column, list the invoice due date
  • Leave a fourth column to fill in the date the invoice was reconciled
  • Create a fifth column to list the payment method (if your small business utilizes multiple accounts or credit cards)
  • If you would like to, you can create a sixth column to enter in any specific notes about the invoice or payment


With the information above, each row should be completed in the following order:

Vendor Name | Amount Owed | Date Due | Date Paid | Payment Method | Additional Notes


Repeat this process for all your unpaid invoices until they are all resolved!


#6. Reconcile Any Unpaid and Past Due Invoices

If you have any past due invoices, pay them as soon as possible to avoid a pile of unpaid invoices and a group of angry vendors.


Additionally, for any unpaid invoices you have that are not yet past due, clean them up with our organization tips above and then reconcile the invoices before the anticipated due date. Once the reconciliation is complete, prepare a trial balance report and then close out your books!


MyRQB: Outsourced Bookkeeping Services for Small Businesses

Still wondering how to organize invoices for small business bookkeeping? The key to business success is to focus on what you do best and delegate the rest. By outsourcing your bookkeeping and accounting tasks, your business can receive important and accurate financial reports in a timely manner.


At Remote Quality Bookkeeping, we are dedicated to helping you obtain the necessary information to make effective business and revenue decisions. Our team of specialists provides cost-effective, efficient, and accurate outsourced services for small businesses and franchisees nationwide.


Our cloud bookkeeping technology is state-of-the-art, providing business owners with real-time insight into critical financial data. Additionally, we dedicate a complete team to your company, allowing us to have top-level staff working together on your account. As part of our ongoing accounting and bookkeeping services, we take care of all the back-end work and provide you with instant access to financial statements so you can always know where your business stands.


Are you ready to begin exploring our business outsourcing opportunities today? Contact us today at (866) 567-4258 or via our online contact form with any questions or to learn more about our services!

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