If you’ve ever found yourself rooting around for a crumpled receipt at tax time, you’re not alone. But here’s the good news: setting up a simple system to track your business receipts doesn’t need to be stressful. In fact, with the right tools and habits, it can be smooth, fast and even satisfying.
Whether you’re a sole trader, freelancer or run a limited company, keeping proper records is not just good practice – it’s a must under HMRC rules. Plus, it helps you claim back every allowable expense you’re entitled to.
So, let’s look at how to make receipt tracking one less thing to worry about.
Why Bother Tracking Receipts Properly?
Before we dive into the how, let’s talk about the why – because when you know what’s at stake, you’re more likely to stick with it.
Claim every penny: Missed receipts mean missed expenses, which means paying more tax than you need to.
Stay HMRC-compliant: If HMRC ever checks your records, you’ll need proof for each claim.
Stress-free tax returns: With everything organised, filling in your Self Assessment or submitting year-end accounts is a breeze.
Still holding onto that shoebox full of paper receipts? Time for an upgrade.
Step 1: Separate Business and Personal Spending
Let’s start with a biggie. Mixing business and personal spending causes headaches later.
Using the same bank account for everything makes it harder to track your expenses and puts you at risk of missing tax-deductible costs. It also means more time spent untangling things at the end of the year.
Open a dedicated business bank account and only use it for business-related transactions – things like travel, subscriptions, equipment and client meals. This makes your records cleaner and makes tools like Xero and Dext far more effective.
Step 2: Go Digital (Seriously, Do It)
Paper receipts fade, get lost or end up in the wash. Digital ones don’t.
With Making Tax Digital now in full swing for VAT and coming soon for income tax, HMRC expects digital records. That means now’s the time to ditch paper and move to a smarter system.
Here’s how to get started:
Snap a photo of any paper receipt straight away
Ask for digital receipts when buying online
Use Dext – it reads receipts and sends them to your accounting software
Connect Dext to Xero for a smooth, automated workflow
This setup means less admin and a lot less stress when tax time rolls around.
Step 3: Pick One Place to Store Everything
Don’t let receipts get scattered across apps, inboxes and folders. Choose one main hub for all your records.
Options include:
A cloud folder like Google Drive or Dropbox, organised by month
Direct uploads into Xero
Letting Dext collect, scan and store receipts automatically
Whatever you choose, keep it consistent. It’ll make your life easier in the long run.
Step 4: Create a Quick Naming System
If you’re manually saving receipts, use a clear, simple naming format like:
[Date][Supplier][Amount]
Example: 2025-08-12_Amazon_£45.99
It’s easy to search and sort later, especially if HMRC ever asks for proof.
Using Dext or Xero? Good news – they do this automatically by pulling key info from your receipts. Less typing, more time for actual work.
Step 5: Match Receipts to Transactions
Matching receipts to your bank transactions keeps your bookkeeping tidy, and that’s where Xero really shines.
When you upload a receipt, Xero will:
Suggest a match from your bank feed
Fill in the date, supplier and amount
Store the receipt with the transaction for audit-proof records
Dext makes it even easier by handling the scanning and syncing for you. Together, they take care of the heavy lifting.
Step 6: Set a Weekly “Money Check” Habit
Here’s the secret sauce … consistency.
Set aside 15–20 minutes once a week to:
Snap or forward any receipts you’ve missed
Check Dext has processed everything
Match new receipts to your transactions in Xero
Flag anything that needs attention
Make it part of your Friday routine. A weekly check-in helps you stay ahead and avoid last-minute panic.
Need a bit of structure to keep on track?
Grab our free Financial Checklist – it’s packed with simple, step-by-step tasks you can follow daily, weekly, monthly and quarterly. It’s perfect for building good habits and making sure you never miss a deadline again.
Final Thoughts: Simple Habits, Big Results
You don’t need to be an accounting expert to track receipts properly. With the right setup and small weekly habits, you can stay organised, claim what you’re owed and keep HMRC happy.
Want help setting up a system that works?
Book a free call with our team today. We’ll get you up and running with Xero and Dext, show you how to stay on top of your records, and make tax time feel way less stressful.
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