Sunday, May 13, 2007

Organizing credit card receipts

For many people, handling credit card receipts is an exercise in frustration. As in so many other areas, a good system is the answer to turning something frustrating into something extremely easy. Outlined here are the nuts-and-blots of the system we use at our home.

  1. Label a file folder for each credit card you have. Include store credit cards as well as major credit cards. These folders become part of your reference filing system.
  2. Label a file folder “Credit Card Receipts.” This folder will be placed in a tickler file folder. I like to use a colored folder so that it is easy to locate.
  3. Label a folder “Tax Deductible Receipts.” This file folder may go in your tickler file for the time of year you will be compiling your tax returns.
  4. In the evenings, empty you pockets, briefcase, etc. of any credit card receipts you have collected during the day.
  5. Take the loose receipts and put all of them in the back of the Credit Card Receipts folder. Filing to the back of the folder keeps the folder in chronological order and makes the job of matching items on the statement with their corresponding receipts much easier. Do not worry that receipts from different credit cards are being mixed together.
  6. When the credit card statement comes, throw it in the tickler file for the day you want to handle bills. Saturday is usually a good candidate. When Saturday comes, you will no doubt have several bills to pay, and you will handle them all at one time.
  7. Pull the Credit Card Receipts folder and begin with the first statement. For each line on the statement, pull the corresponding credit card receipt. You should have a receipt for each item on the statement. Any missing receipt is a red flag that you should take seriously. It is a sign of either holes in your system or fraudulent charges. If it is the first, shore up those holes. You will then have a reliable way of determining when you are being charged for something you did not purchase. Are there others in your family who also use credit cards? If so, they must be diligent about getting their receipts into the Credit Card Receipts folder.
  8. As you are matching items in the statement to the receipts, set aside any which will be tax deductible.
  9. Once you have matched all items to the receipts and the statement has been verified as being correct, write the check and tear off the portion to be returned.
  10. Take any of your tax deductible receipts and drop them into the Tax Deductible folder. If you need to write any explanation on any of them, now is the time to do that.
  11. Take the remaining receipts and staple them to the statement.
  12. File the statement in its folder in your reference files.

Should you need to go back and find a receipt, it can be in only one of two places. It can be stapled to the statement in the folder for that credit card. It can be in the Tax Deductible folder. It can be in no other place. Should you need to return an item and need the receipt, simply think in terms of the approximate time the purchase was made and with what card. It will take only a few seconds to scan the statement for that time period and locate the month when the purchase was made. Once you have the correct month, thumbing through the receipts to find the correct one takes only seconds.

Having a good system is almost as easy as having no system at all in terms of the time you will spend to maintain it. A good system is a huge time-saver for all the times you need to find a receipt and the money-saver when you need to dispute fraudulent charges.

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