Family child care providers welcome advances in technology that can make their record keeping easier.
Record keeping apps and scanners offer some help, but they aren’t perfect solutions to the unique record keeping rules facing providers.
The Neat company offers software and scanners with these helpful features:
- You can take a picture of a receipt and post it onto their software for later retrieval from any Internet platform (computer, tablet, phone)
- You don’t need to save the paper copy of any receipt that you scan, according to IRS rules
- Your records are saved electronically, thus eliminating the risk you will lose them in a fire, flood, etc.
- Your records can be easily transferred to Quickbooks, Excel and TurboTax
Although these features can save your time, there is one major drawback.
Neat and other software/app companies cannot separate out your 100% business expenses from your shared expenses. In other words, these products work great if your receipt represents a 100% business expense. For such expenses you can label them as a specific expense category and easily transfer them to your tax return.
However, most of your expenses are not 100% business. For such shared expenses you generally use your Time-Space percentage to determine your business deduction. Neat and other companies can’t separate out such items on a receipt and cannot apply your Time-Space percentage to any individual item.
Minute Menu Kids Pro (now called KidKare) is the most comprehensive record keeping software designed specifically for family child care providers.
See also my previous article: “Are Receipts Obsolete if You Use a Scanner?”
Tom Copeland – www.tomcopelandblog.com