KEEP YOUR RECEIPTS

Accurate information is a valuable commodity. Without it we are going to make many unnecessary mistakes. The key to mistakes is not that you are not going to make any, it is what you do about your mistakes. Do you learn from them or do you continuously make them over and over again? Mistakes are made because we lack omniscience. Realizing this, we should seek out sources of accurate information.

It is truly amazing to go into a store or a coffee shop and witness a customer has making a purchase and the cashier will ask the customer if he wants his receipt, (shouldn’t the cashier automatically give the customer the receipt and allow the customer to make the decision whether to keep it or not?), and horrors of horrors, the customer says no. This probably means that the customer does not keep track of his purchases and ultimately, what he spends his money on.

What is a receipt? A receipt is an accurate record of purchases made at a particular establishment. The receipt is designed to give the customer the information needed to accurately record his purchases in categories on his income statement. An income statement is a statement that shows income and expenditures. The difference between income and expenditures results in either net income or net loss.

The question becomes how can someone know whether they have net income or net loss if they do not record their purchases from their receipts? The receipt is important because by recording it you can see where you spend your money. You can make adjustments in your spending habits that will help you keep your budget. Recording transactions is essential to financial well being. Without this necessary information, you will potentially overspend.

Accounting information is accurate information. It allows you to know what your financial situation is at any given point in time. A receipt is accounting information and therefore accurate. Your bank and credit card companies are keeping track and making the necessary adjustments to your account whether you do or not. Errors can be made by banks and credit card companies. Without your receipt, you cannot prove anything that might be in your favor and you are stuck with the error.

A receipt also demonstrates ownership. It is a transfer of goods from a business to an individual. It therefore establishes property rights. When I purchase something at a business, it is mine. Without a receipt, you cannot prove that you own the property. If you try and return it to a store without a receipt, they may think that you stole it and are trying to get something for nothing. It makes the process easier when returning merchandise. If you have accurate information, then the store can act appropriately.

The next time the cashier asks you if you want your receipt, emphatically say; yes, I am a frugal accountant and frugal accountants keep their receipts because they like accurate information and establishing property rights.