The horrendous day when you sit down to get your tax information ready for the accountant is here and you sit down with two shoeboxes of receipts, a huge bundle of opened bills that spread over (sometimes) three years and the start of a nagging headache.

It doesn't have to be like that!

You will have to spend whatever time is needed to clean up the backlog, but if you start now for the new receipts, after the backlog is done and you have caught up, one hour a month will generally save you from this headache forevermore.

By the way, you'll still need two shoeboxes!

For this to work easily you need a spreadsheet program such as Excel or Open Office Calc (free download) and you can use a template (see link) or you can make your own spreadsheets to do it.

Spread Sheet 1

You create four columns named date, amount, specific and group. Date and amount are obvious. In the specific column you'll put something like new laptop or pens or newspaper-ad and for group you'd put the group which your accountant wants information for, such as equipment for the laptop, stationery for the pens and advertising for the newspaper ad.

You create a schedule for your monthly tasks or a to-do list and you stick to it. On the monthly to-do list you set a time and day when you are unlikely to have to do anything else - ( a Sunday afternoon, a late night trading day...) and on this day you mark off one hour to deal with the shoebox.

In the first shoebox you "file" (or toss in) each day, all the receipts and bills for the current month. During the hour set aside (on your schedule), you go through this shoebox monthly and type in from the dockets the 4 details for each purchase you have made.

You also look for the purchases on your credit card statements and enter these in the same way. Make sure the date is valid and the specific field is the same for both a docket and a credit card entry.

Spread Sheet 2

You then sort the columns by date first and then by the specific column and copy and transfer this data to a second spreadsheet and save it. Print the first spreadsheet you just made. Fold it, write the date on it and staple it or bind it to the statements and dockets with a rubber band and toss it in shoebox 2. (Or file the statements in the normal way if you have a lot and print two copies of the spreadsheet, one for the dockets and one for the folder.)

That's it for the first month. Each month on the first spreadsheet, delete the data and start with a blank sheet. Repeat for each succeeding month in the same way. There is one further step for month two and all succeeding months.

In month two when you transfer the data to the second spreadsheet, you add it to the first data and then sort all of it using date and specific again to mix it together. Check down the row of amounts to see if any are duplicate amounts because you are recording both docket receipts and credit or bank statement amounts. Delete any purchases that are duplications and save.

Spread Sheet 3

Copy these four columns over into a third spreadsheet and resort the data first by date and then by group.This spreadsheet is a sort spreadsheet so it also can be cleared each month or left as it is collecting the whole years data - but not both. Because of duplications and bills that appear out of order, data can change. I finish the month and carry these over to the new month, but your accountant may be stricter than mine and require complete date accuracy.

If you need more information such as tax as well as purchase amount, company names for purchases etc, then make more columns on the first and second spreadsheets to contain these. As you are saving the second spreadsheet, this data will still be available to you to use, while small bills will have a monthly total which is usually sufficient.

Spread Sheet 4

Create a fourth spreadsheet with 12 monthly columns and a starting column for group. Type in your group names. Add up the purchases for a calendar month for each group and put the total for each group into this fourth spreadsheet under the column for the month. If you have more information you need to keep make sure it lists and stays saved on sheet 2.

Do this through the year until the day of reckoning arrives. On this day send the fourth (and sometimes sheet 2) spreadsheet to the accountant or enter this data into the software program you use for tax.

As it is all neatly sorted by date and group it is easier to enter. As you do this monthly - (I do it bi-weekly but monthly is ok for small business or personal tax) - This means you have done 12 hours work on it before the end of the financial year.

It means that you don't have to look out for tax claimable items you may otherwise have forgetten to list, or search through (or for) bills or receipts that you cannot remember what they were for. And you don't have to struggle to identify dates and amounts on dockets if they are too faded to read.

This is a concise version, but I think you can get the idea from it and believe me - it really helps. Not only for the day of reckoning but also as an overall time saver, because you only handle a receipt once and then you file it. My friend actually treats her spreadsheet system as an ongoing affair, and enters receipts the day she gets them or opens a statement and before she puts them in the first shoebox. At the end of the month, she just does the sorting and then bundles or files.

Do whatever works for you I guess. That's how I do it, hope it all makes sense.