Why Small Businesses Need To Transform Paper Receipts To Digital Data

Long gone are the days when one only had paper and pen to keep records of information. Computers and digital data have dramatically transformed how people work and live, and even decades after the commercialization of the first computer, its potential still seems endless. In the business world where innovations to improve productivity are always welcomed, the role of computers in storing and processing information is indispensable. 

Digital technologies are increasingly replacing traditional manual processes and becoming the key to success in today’s business world. 

The recent pandemic made this urge to transform digitally even greater, as it is a matter of survival for a business to cut down on expenses while aiming to grow. The switch to digitization is urgent, but before adopting any new tool, we have to consider its advantages as well as possible drawbacks. 

For small companies who want to embrace scanning and receipt tracking software to get rid of their paper receipts, our explanation of the pros and cons in this article will help you decide if your business will take the next step and digitize its documents.

What is digital data?

According to Techopedia, digital data is a binary format of information that can be interpreted by various technologies. In a binary system, complex audio, video, or text information is turned into a series of binary characters, ones, and zeros, or “on” and “off” values.

As computers can only work with digital information, we need input devices to “translate” the data into a language that computers can understand. For example, a scanner or a camera converts an image into pixels (small squares of color that are signaled by a sequence of numbers), so that visual information becomes digitized images that we can see on a computer screen. 

What is good about digitizing your receipts?

Although a scanner is a must-have item in any company, scanning apps or software aren’t as commonplace. However, the idea that you can scan all your bills and other kinds of documents with just a smartphone is tempting. Much like an ordinary scanner, scanning software turns your paper into a digital copy, but that is not all it has to offer. 

There are a lot of apps that also help you to organize your receipts, track expenses, and even create reports. If you are still wondering why you should choose a scanning app for your business’s digitalization, here are some of the benefits.

  • Cost-saving and time-saving

From a financial perspective, switching to digital receipts is undoubtedly cost-effective. Conventional physical documents require various expenses from the users, ranging from paper and ink to printers and scanners. Businesses need to track their operation based on various kinds of documents, so there are storage costs and added unnecessary expenditures. 

Imagine that all your important papers are now digital data safely kept in your computer or the cloud with the support of scanning software. There are several free apps that you can try; or you can purchase one for more useful features, such as linking to your accounting system and customizing your financial reports.

On top of that, working with digital data is quicker than you expect. If you are an accountant or a bookkeeper, you should know better than anyone the time-consuming task of categorizing receipts, inputting data, and then extracting information from them. Don’t waste your energy doing everything manually now that you have apps and software to assist you. Let these digital tools take care of your receipts and spend more time on the essential tasks which will lead to increased profit for your business!

One significant advantage of a scanning app is that you can use it at almost anytime and anywhere. Once the app is downloaded to your smartphone, you can easily scan receipts on the go without waiting until returning to your office. 

  • Easy storage and access

Managing receipts and financial documents in an organized way for ease of tracking and retrieval is a real headache as your business transactions grow in number and scale. Soon you’ll realize you are surrounded by clutter and piles of folders that take up considerable space in your office. However, thanks to digitalization, you don’t need physical cabinets to store the documents or worry about them getting lost or fading. 

Both you and your customers can store digital receipts in your computer or on the cloud, which means easier access, and smoother record keeping and accounting. Receipt scanning software keeps your documents in a central location and helps your team stay on top of all the details even when working remotely.

  • Tax-ready

A recurring question whenever tax season draws near is: How do you know what expenses are deductible without having to sort through each receipt? Good scanning software can get your receipts into action in many ways. 

First, besides scanning, you can use it to add tax information and categorize the expenses accordingly, which makes tax preparation time a breeze. When every expense is precisely recorded, you will also be able to tell how many tax deductions you can claim. 

What’s more, many receipt scanning apps allow you to create financial reports based on the input data and export them into your accounting programs. This means you can minimize errors caused by carelessness, therefore maintaining the accuracy of all reports. 

Even if tax time is over, you’ll never know when the IRS may ask to review your receipts, and this is when scanned receipts and documents come in handy. Because the IRS accepts digital images, you can simply show them the data they need and get the paper copies off your desk! 

  • Increased interactivity with customers 

Another merit of electronic receipts worth mentioning is their marketing role. Email receipts are the perfect tool to promote your services by, for example, featuring links to your business website. Based on the customer transactional information collected through e-receipts, you can keep track of their purchasing habits, know their preferences, and send them personalized offers that match their needs. 

In addition, business owners can use the email list to gather customers’ feedback with surveys. Each receipt sent is an excellent opportunity not only to engage customers but also to improve your products or services. So it can be considered a bridge that brings the retailers and their customers closer together while transforming shopping into an interactive experience.

Disadvantages of digital receipts and documents

  • Technical knowledge required

Although you don’t need to be an expert to use the scanning software, some technical knowledge is necessary if you want to optimize all functions it is capable of. Those who are not used to working with digital data may find it hard to navigate to each receipt and end up using the software just like a normal scanner instead of fully exploiting its potential. 

If you haven’t bought one yet, help yourself by asking such questions as “What are you looking for in scanning software?” “How can you use its features to your benefit?” “What skills are required to make it work?” Digital transformation can’t happen overnight and certainly entails remarkable cultural changes in the office, so you should at least know what to prepare, including an understanding of the tools you are going to adopt. What is equally important is an open-minded attitude toward new things and the willingness to learn from mistakes in this process.

  • Security problems

Many people are concerned that digital data leaves information vulnerable to greater security risks. Keeping receipts and financial documents online doesn’t guarantee they are safe from hackers’ attacks or system failures. However unlikely such security issues may seem, the far-reaching consequences should be acknowledged and avoided at all costs. When someone compromises the system, the worst scenario may be loss of customer data, so it is advisable to backup everything in advance. 

Shoeboxed as a solution

Given both the pros and cons of switching to digital receipts, are you still opting for scanning software to accompany your office’s transformation? If you say ‘yes’ to innovations and challenges, let’s figure out how Shoeboxed can assist you with its amazing features.

  • Easy scanning with accurate data

Shoeboxed gives you multiple scanning options so that you can do it no matter where you are. After taking photos of your receipts, you can upload them to Shoeboxed software or its mobile app in just seconds. 

Whether you are at home or on a business trip, Shoeboxed makes a great companion that digitizes your receipts and tracks every expense on the move. Real-time reporting is possible so you’ll never have to worry about missing out on some bills.

At Shoeboxed, we also understand that there are important receipts that you want to keep as they are. In this case, or at a time when you wish to outsource your receipt scanning task, you can ask Shoeboxed to send you the postage-paid Magic Envelope, put all the items that you need us to scan inside, and mail it back to us. 

We also accept the electronic images of your receipts 24/7 and help you process to extract key data. With Shoeboxed, you know that you are provided with human-verified information which is easily searchable and editable in your digital system.

  • Improved security for both paper and digital receipts and documents

Keeping your physical and digital receipts secure is a promise that Shoeboxed is committed to our customers. We use Secure Socket Layer encryption for the upload process and do regular backups of your scanned data so you can rest assured that your private information is protected with utmost care. Also, access to the app is strictly controlled and you can decide who will have the right to retrieve or modify the data. 

The same attention to security is applied to storing your paper documents, which are safeguarded in our independently owned processing center with strong monitoring measures. For each receipt you entrust to us, Shoeboxed will do whatever it takes to deliver our best services.

  • Great compatibility with accounting programs

We are partners with several accounting platforms, such as QuickBooks, Xero, and Evernote, which means documents scanned with Shoeboxed can be synced onto these systems and ready for any report. You can also choose to auto-import receipts from your Gmail inbox into Shoeboxed account so you never lose another bill again. 

Forget the tedious manual data entry and get some burdens off your accountants’ shoulders, helping them to streamline the bookkeeping process. You’ll surprised at how the fine combination of a receipt scanner and an accounting program will speed up your workflow and help your financial management. 

  • Tax-friendly

Audits will no longer be a hassle if you have all necessary documents at hand. One perk of Shoeboxed is that it offers clearly scanned images of your receipts which are accepted by both the IRS and CRS. You don’t need to scour through file after file to search for data because  Shoeboxed  organizes and categorizes things as you scan them. 

Calculating tax deductibles will be a lot easier and with precise data, you can also create accurate expense reports that are tax-compliant and share them with anyone from your Shoeboxed app.  

  • Economical plans for small businesses

At Shoeboxed, we have plans for all types of customers, including individuals and businesses of any size. Starting from just $18 per month, you will be able to enjoy our unlimited file storage and make the best out of the Shoeboxed scanning app. Professional users can consider the $36 plan to include QuickBooks Online integration. 

Details of each package are available on our website, so make sure to check it out!

The bottom line

Trying out a receipt scanning software may become the best decision you can make to digitize your office. It offers the convenience and flexibility you need to manage your finances better while solving problems caused by paper receipts and documents. If you are up to this idea, we can’t wait to show you how Shoeboxed can make a difference! 

How Digital Transformation Affects the Future of Accounting

Digital transformation is the integration of technology and digital applications into a business’ processes, with the main goal of increasing operational efficiency, enhancing the experience, and satisfying customers. Moreover, digital transformation creates a huge competitive advantage for businesses in the market.

Accounting is no exception. The future accounting profession has moved far beyond mere bookkeeping and payroll, as well as purchasing procurement. Technologies such as cloud-based data management, process automation, and artificial intelligence are unlocking businesses’ numerous potentials and elevating accountants’ skills. 

1. How digital transformation affects the future of accounting

Leveraging the cloud

“Working in the cloud” is a noteworthy working trend in the future of accounting. Forbes points out that cloud accounting is experiencing rapid growth as new intelligent technologies like the Internet of Things (IoT), Artificial Intelligence (AI) and machine learning permeate the market. Since cloud-based accounting integrates information into a cloud system, accountants will no longer need to keep tons of paper stacks to save business data! A cloud-based accounting system enables instant access to various data resources and computing capabilities. A significant benefit of the cloud-based system is the continual updating of information. It also allows accountants and clients to analyze data and make decisions based on cutting-edge information. According to the Journal of Accountancy, cloud-based technology also monitors information constantly, instead of intermittent analysis, whenever the information is updated to the system.

Various statistics carried out by cloud-based enterprises have proved that by 2020, by 2020, 78 percent of small businesses will be relying solely on cloud technology for accounting. Especially during the time of Covid-19, there is an increasing number of businesses investing money in virtual working technologies. 

An example of a cloud-based accounting system is Shoeboxed. Used by millions of SME businesses worldwide, Shoeboxed helps accountants get reimbursed fast and maximize tax deductions by tracking customers’ expenses and receipts. How does it work specifically? Shoeboxed receives customers’ receipts by mail (with free delivery) or scanned documents (with our mobile apps, available on Apple Store and Google Play Store). Then, Shoeboxed extracts the most important data from customers’ receipts to one organized place for easy and at-a-glance expense tracking. Customers can then view and export their data anytime and organize them in their categorizations. Shoeboxed also ensures that all of your receipts are legibly scanned, clearly categorized, and easily located. Shoeboxed proudly helps customers free their desks and drawers from paper receipts and brings the best solution in document storage for years!

Accounting task automation

A medium to a large-sized company may have to receive hundreds, even up to thousands of input invoices per month. It may take skilled accountants approximately 3 minutes for each operating step, such as reading, putting invoices to Excel tables, verifying information with the General Department of Taxation, synchronizing data on accounting software, and storing documents in the business’s standards. 

With the development of new technologies such as RPA (Robotic Process Automation), AI (Artificial Intelligence), OCR (Optical Character Recognition) in the 4.0 era, the daily, manual accounting operation at enterprises no longer needs human participation. The accountants will no longer need to spend hours and waste energy handling accounting tasks manually, which may cause error and fatigue during peak days. 

Here are some examples of applying RPA in the future of accounting: 

  • Manage Accounts Receivable: Bots can manage customers’ key files and credit approval, purchasing process and collect revenue. 
  • Manage Accounts Payable: RPA helps to transfer incoming invoice information (such as invoice number, received data or amount) from PDF files to SAP web applications and internal spreadsheets. This is a useful application that can reduce the invoice processing time by up to 60%. 
  • Cost allocation: RPA easily combines data from different sources (emails, Excel spreadsheets, Google documents, etc.) into one master file, then upload directly to the ERP system. The software can do these actions in a short time (i.e., under a minute).
  • Financial close & Financial reporting: Financial closing and reporting are decisive aspects of all businesses’ success. Ideally, a well-executed month-end close should be fast and smooth and take about three to four days to complete. Using RPA, in this case, brings businesses a successful month-end close and helps improve organizational performance. By automating all the workflow steps, an accountant can simplify the transitions between each stage of AP, centralize all AP operations, and preserve all payments and approval details together. With RPA, accountants can save time, prevent fraud and reduce errors in doing financial close reporting.

Artificial Intelligence 

Artificial Intelligence (AI) is one of the high technologies that enable a computer to do decision-based tasks previously conducted by humans. AI comes in multiple forms and in many aspects of life. Like machine learning, the more you use AI, the better it gets at data analysis and decision-making. The most common uses of AI in the future of accounting include automating tasks, machine learning, basic task automation, fraud detection, service investment, and deterministic loan approval processes. 

2. The future of accounting jobs with digital transformation

Technology will support, not replace accountants

The global workforce, especially accountants, may be concerned that technology will replace their jobs in the future of accounting. Even the most professional auditor may fear that they will lose their job to AI-powered machines. This is a common fear, however, according to the U.S. Bureau of Labor Statistics, the future of accounting jobs shows positive potentials with the prediction to grow by 4% between 2019 and 2029. 

In the future of accounting, AI technologies such as Machine Learning will support accounting and finance professionals to perform their tasks more efficiently. We can understand that AI supports the human workforce, but doesn’t steal their jobs. 

For example, AI drives straightforward processing, frees accountants from stressful and tiring tasks. In the meantime, they can spend more time interpreting and analyzing data collected by AI, and provide better-consulting services. To explain in a simple way, AI allows accountants to focus on tasks that require creativity, strategy, and ingenuity – features that AI can not really provide yet. So in the future of accounting jobs, manual tasks will be handled automatically and intelligently by AI, helping accountants perform their job in a modern way.

Future of accounting profession: More intelligent, strategic, and creative than ever

As Accounting Today has stated, “as with any evolution, whether Darwinian or technological, those who aren’t willing to adapt risk being left behind.”, accountants must keep moving forward. Future accountants must have the strong technical knowledge and necessary skills to perform the administrative, managerial, and analytical tasks that technology can’t do. For example, when more companies use the cloud-based system, accountants need to be proficient in using the cloud to analyze, manage, and transfer financial data. They can use their uniquely human skill to transform the insight from high-quality data collected by AI and provide more effective, realistic financial planning and reporting. They can also collaborate with peer businesses to leverage financial data to drive innovation, build more resilient and agile supply chains and develop business management plans that promote growth while ensuring continuity.

As automation becomes a major aspect in the accounting sector, all future accountants must develop the technical knowledge and skills to handle tasks that technology can’t do. Accountants may also need to take on an advisory role with clients, which requires them to analyze big data and trends. In this case, a data-driven mind is a key to success in the future of the accounting profession.

See also: The Digital Accounting Era: Five Steps For Accountants To Succeed.

Final thoughts

The future of accounting is undeniably changing with intelligent technology. Future accounting jobs will require accountants to be eager, adapt quickly, and evolve alongside the business. Don’t let yourself be left behind – start your business’s level of proficiency in the future of accounting now with Shoeboxed.

What Is Receipt Management? 5 Best Receipt Tracker Apps For Businesses

Whether you are managing finances for your small business or filing taxes, you will need to find a method to save you time and money. Receipts from your purchases are likely to get lost in a sea of documents and miscellaneous papers, and physical documents can get damaged or destroyed. 

Converting your printed receipts and documents into digital files can solve these problems, and receipt management software is the best assistant. A receipt management app is a great way to keep your receipts stored and organized digitally. Some receipt management apps include online tools that allow you to consolidate your receipts and access them from anywhere. This article can get your feet wet with receipt management apps and why it is important to your business. 

1. What is receipt management? 

Receipt management is a fundamental aspect of general accounting. In personal finance, receipts are a method of tracking spending habits, and it goes the same way with businesses of any size. Businesses also use receipts to track revenue generation. The term “receipt management” refers to the practice of organizing, filing, and profiting by keeping an accurate and complete record of your receipts. 

Most receipt management apps work the same way. You only need to download them onto your cell phone and use them to take pictures of your receipts. The OCR (Optical Character Recognition) technology digitalizes all the text and numbers on those receipts and stores digital versions of them in a filing system. By scanning paper receipts and creating a digital version, you can retrieve your receipts anytime by searching with keywords and filters. 

2. Why is receipt management important?

Many businesses, especially small and medium-sized enterprises (SME), are dealing with up to hundreds of receipts per day. Keeping an accurate record of those receipts is a daunting task if you only rely on physical copies and traditional filing. Using a receipt tracking system will help you in: 

  • Filing receipts: Filing receipts will be much easier with a digital filing system. You can use a receipt capture application to create a digital copy of the receipts and back them up off-site to ensure no information is lost. You can keep your receipts chronologically or in categorical subfolders for quick reference.
  • Finding tax deductions: Grouping receipts by category will be beneficial for businesses when tax time arrives. Receipt tracking apps allow accountants to find tax deductions quickly and easily.
  • Auditing: Receipt management is crucial to making audits quicker if your business is ever audited. The IRS can easily verify the accuracy of all deduction claims and confirm reported revenues.

Read more: A Basic Guide To Business Audits 

3. 5 best receipt tracker apps for businesses of all sizes

There are many receipt tracker apps available that you can choose from. However, the choice depends on your business. If you want to focus on expense management, rely on corporate cards, and need fast employee reimbursement options, Expensify will be the best choice. On the contrary, if you need help scanning a box of old receipts and business documents, Shoeboxed will be a better fit. You can decide which one is the best receipt tracker app with our top five receipt tracker apps. 

Expensify: Best receipt tracker app for traveling

Platforms: iOS, Android, web browsers

Price: From $5/month

Expensify is a cloud-based receipt tracker app for iOS, Android, and web browsers. This receipt scanner is portable, online with a cloud-based system, so you don’t need to worry about the expense reports and file receipts taking up space on your device. 

Expensify is extremely helpful when you regularly have meetings or business trips to different parts of the world. Expensify saves you from stuffing post-trip receipts into your luggage when you are on the go. All you need to do is take pictures of your paper receipts with your smartphone, submit and be done with them. Expensify will automatically pull out the charges. From there, you can associate the charge with an expense report.  If you use company credit cards frequently, you can use Expensify to import those expenses from the cards. By this, you will no longer have to go through your statements at the end of each trip. To sum up, if you are looking for the best receipt tracker app to manage travel expenses, Expensify is the best choice. 

  • Shoeboxed: Best receipt tracker app for tax season

Platforms: iOS, Android

Price: Starting at $18/month

Shoeboxed is an outsourced receipt-scanning service that converts paper receipts into organized digital copies on your behalf. It is suitable for accountants, freelancers, and small businesses who are drowning in physical receipts. This receipt management software is one of the most versatile options on this list as it doubles as a receipt scanner and manager. With Shoeboxed, you can mail your receipts to a Shoeboxed facility to have them scanned and organized. If you prefer not to send physical receipts to a third-party receipt scanning facility, you can upload your receipt via mobile app or email. 

If you are a sole proprietor, an LLC holder, or a freelancer, you may be able to write off expenses. But when tax time arrives, how do you sort through it all with your accountants? In this case, Shoeboxed would be the best option. It allows you to scan receipts and keep track of your mileage for tax reporting purposes. It also gives you the ability to specify which expenses are deductible, making it the ideal tool for tax time. You can create expense reports and export them to your colleagues or tax preparer right from your phone. You will finally get those receipts off your desk and into action with Shoeboxed

Neat: Best receipt tracker app for bookkeeping

Platforms: iOS, Android

Price: From $25/month

If your target is to keep your books in better order, Neat is the best choice for you. You can use this app to scan and upload receipts, but Neat will take booking to the next level. It will connect your bank accounts, credit cards, and loan payments to Neat Receipts for more accurate expense tracking. It will also itemize your expenses line by line on each receipt, match receipts to your invoices and bank statements for clearer financial reconciliation. One of Neat’s great advantages is that it brings unlimited document storage. You can upload, sort, and organize as many non-financial documents as you want. 

Furthermore, Neat’s expense management data connect with accounting software (like QuickBooks) and tax software (H&R Block’s and TurboTax). You will no longer need to enter manually any of your expense reports, non-financial documents, itemized receipts as long as you logged them on Neat. 

Smart Receipts: Best receipt tracker app for multi-format reports

Platforms: iOS, Android

Price: From $9.99/year

Smart Receipts is also a great choice for frequent business travelers because it stores and categorizes your expenses by trip. You can photograph and upload receipts or generate a text receipt, add comments for a more detailed explanation of what each expense entails.

Also, if you don’t travel a lot for work, Smart Receipts is still a great help. You will delineate the report by date rather than by trip so that you can track your business expenses over any given period. 

One more huge plus for Smart Receipts is that it allows you to export your reports in any format – PDFs, ZIPz, CSVs, and more. However, this app will not automatically sync with your accounting software. Instead, when you generate expense reports, you will have to add them manually to your QuickBook or Xero account. 

Wave Receipts: The most affordable accounting software

Platforms: iOS, Android

Price: Free for accounting and invoicing

If you plan to minimize cost as much as possible, Wave Receipts is the best receipt scanning software. Wave Receipts integrates with other free Wave products, but it also has a drawback: It only integrates with Wave Accounting, not QuickBooks or Xero. To track expenses alongside scanning receipts, you will need to sign up for Wave Accounting and Wave Receipts. Unlike comprehensive apps like Expensify, Wave Receipts focuses on receipts only.

Final thoughts

Transforming your paper receipts into digital files and expense reports saves you from spending hours hunting through papers for information or organizing paper receipts into a logical sequence. Cloud services, mobile apps, and receipt tracking apps can automatically perform these tasks, increasing the accuracy of your finances and helping you keep track of your expenses. 

These are our five favorite receipt tracking apps. If you’d like to suggest any other receipt management software, let us know by sharing a comment!