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Whether by shoebox, spreadsheet or smart phone app – Get yourself organized!

As a self-employed physician or advanced practice provider, you'll need to have systems to keep track of your budgets, your expenses and your receipts. It really doesn't matter what system you use as long as you can keep things organized, and you don't create a lot of work for yourself at year end.

The proverbial shoebox -– it's fast, it's easy, but boy, will you have some work to do when you have to report your expenses or file your taxes. You have a designated shoebox in a designated place in your house. Whenever you need to find a receipt, you always know where it is. It's that simple. But at some point, someone is going to have to go through all those receipts and turn them into an expense report or a tax return.

So, here's a twist to that system – call it the hybrid shoebox system: Kevin Hedrick, CPA and Tax Partner at Williams, Benator & Libby in Atlanta, recommends filing expenses in categories such as hotel receipts, rental car receipts, airfare, etc., then summarizing them in a spreadsheet for your accountant or for your own reference when doing expense reports. In the case of a tax audit, you will have an easier time finding a receipt if you filed all your 2016 hotel receipts together instead of dumping all your receipts in one file or shoebox. Tip: The IRS allows you to keep copies of receipts, whether paper or electronic. If you like to minimize paper clutter, save all your receipts electronically for easier retrieval and less filing – call it the virtual shoebox.

One advantage of an electronic expense tracking system is that you can back it up, save it to the cloud, and take it with you wherever you go. If you're a fan of the spreadsheet, you might consider using Google Drive, Google's free online document creation and management center. Google Drive allows you to create a spreadsheet (or import a spreadsheet you've already created) and save it online through your Google account. Any document you create or store on Google Drive is auto-saved instantly whenever you make updates to it. Unlike a spreadsheet you save to your PC, this one can't be lost because your hard drive crashed or you forgot to save and shut down. It's also shareable, so you can make it available to your accountant, spouse or anyone else with whom you care to share it. When you make updates, everyone who has access to the file will see the changes in real time. It doesn't have all the bells and whistles of a PC-based spreadsheet program, but it will do the trick. And because it is cloud-based, you can access your spreadsheet through any internet-enabled device, including your smart phone, tablet or PC.

A smart phone expense tracking app can be a perfect expense tracking solution for someone who travels for a living. If you like to travel lean, this system goes with you wherever you take your phone. A lot of apps will automatically calculate driving mileage for you using your phone's mapping app. Some will allow you to take pictures of your receipts and then categorize them into an expensable format – no more worrying about losing receipts or fading thermal ink. .

Cloud-based expense tracking systems can be the best of both worlds if they offer a companion smart phone app. They can give you the mobility of a smart phone app with the enhanced functionality of a PC-based system. There are services for billing, budgeting, receipt tracking and more. And for the individual user, there are a lot of free or low-cost options. You're bound to find something that suits all your needs. 

Some banks offer budgeting and expense tracking tools as part of their online banking services. Bank of America has a service called My Portfolio that tracks expenses by category and allows you to set up budgets and spending goals. Like many of the fee-based systems, My Portfolio allows you to sync up all your accounts wherever they may be. One caveat is this system can be a little buggy with expenses not being put into the right categories or some statements not automatically importing at all. But if you're already a BofA customer, it's completely free and worth checking out.

You're bound to find a system that works for you among the options above, and hopefully, we've inspired you to start keeping shoes in your shoebox instead of receipts.

Happy organizing!


Chris Cosenza, CFP, Principal at ClearBridge wealth Management in Atlanta, GA, contributed to this article.www.clearbridgewealth.com

Kevin Hedrick, CPA, Tax Partner at Williams, Benator & Libby in Atlanta, GA, contributed to this article.  www.wblcpa.com

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