There are certain expenses that needs to be accounted for with care in order to understand your financials and help you make decisions.

Purchases at general stores

When purchasing items at general stores, it is especially important for you to separate personal and business. IRS knows that personal expenses may be mixed into purchases at general stores and will likely check the receipts when you get audited.

Also for accounting purposes, it is good to separate your purchases to groups. Groups such as those items that will go to your “cost of goods sold (food, drinks, supplies such as napkins) ” and those that should be categorized to expenses such as detergents, general supplies. It is very time consuming to pick each item and separate them at bookkeeping. If it is separated at the receipt level, bookkeeping can be very efficient. The more accurately categorizations will be done, the more useful your accounting data will be.

Accounting is simpler when categorization is not too excessive, but if you want to analyze your sales and take actions, you will want to categorize sales for the purpose of taking actions according to the data you get. Numbers will tell you a lot.  😉