Why You Really Need to Keep Your Receipts, Even If You Have Statements

It’s not the most exciting part of running a business, but when it comes to staying on the IRS’s good side, those little slips of paper are far more important than most people realize.

I recently attended a conference for my husband’s business. At dinner one night, he (out of habit) snapped a photo of the receipt before we even left the table. He’s been doing this for years because he hates sitting and scanning a stack of receipts. Someone we were with stopped him and asked what he was doing. When he explained, they replied, “Oh, I just use my credit card statement.”

Credit card statements are an important part of your month-end close process...but they’re not a replacement for receipts. On their own, statements simply aren’t enough.

What the IRS Actually Requires

Here’s what the IRS has to say about documenting expenses:

“A canceled check, credit card statement, or bank statement is not sufficient support for a business expense unless it includes documentation of the what, when, where, and why of the transaction.”— IRS Publication 463

In other words:A statement proves that you spent money, but a receipt proves what you bought and why it was a legitimate business expense. Both pieces matter.

Why Receipts Matter More Than You Think

Receipts provide crucial details that statements never will:

1. What was actually purchased: A line on your credit card statement might say:“Walmart — $112.73.”Was that office supplies? A new keyboard? Snacks? Your household groceries? No one—not you, not your bookkeeper, not the IRS—can tell without a receipt.

2. Itemized breakdown: Receipts show which parts of a purchase are deductible and which aren’t.

3. Business purpose: A quick note like “Client lunch with Sarah — project kickoff” can make or break your audit defense.

4. Sales tax details: Helpful for reimbursements or deductions.

What the IRS Accepts as a Receipt

Good news: receipts do not need to be paper.

The IRS accepts:

• Clear photos

• Scanned images

• PDFs

• Email receipts

• Files stored in accounting/expense systems (QuickBooks, Expensify, Dext, Hubdoc, etc.)

The key is that each record clearly shows:

• Date of purchase

• Where it occurred

• What was purchased / services provided

Pro tip: Save email receipts as PDFs and store them with your other receipts. Searching old emails is painful...you’ll thank yourself later.

Pro Tips for Making It Easy

Here’s how to make receipt-keeping less annoying:

Snap a photo immediately. If a receipt goes into my wallet or purse, it’s as good as gone. Take a photo at the table, in the parking lot, or as you load items into your car.

Label it while it’s fresh

Add a quick note:

• “Team lunch after strategy meeting”

• “Printer toner for office”

This saves future-you from guessing (or scrolling through your calendar).

Store everything digitally. Use Google Drive, OneDrive, Dropbox, Dext, Hubdoc—anything searchable and organized.

One Day, You’ll Be Glad You Did

Picture trying to explain a $112.73 Walmart purchase months or years later. Without a receipt, you can’t prove what it was. The IRS won’t assume it was business-related—and they’ll likely disallow the deduction.

That means: Higher taxable income. Higher taxes owed. More stress.

Having clear, organized receipt records can save you time, money, and a massive headache during an audit.

**Your statements tell part of the story. Your receipts tell the whole story.**