Digitized Receipt Management Is The Secret To Successful Start-up And Entrepreneur Business: Here’s Why And How

Are you start-up entrepreneurs who are struggling to manage your business expenses? Or are you business owners who have head-scratching problems keeping track of your receipts? 

Having receipts unorganized may slow down your business. Therefore let Shoeboxed become your reliable partner in tracking your expenses. You just need to focus on your business, we will clear the receipts for you.

In this article, we would like to share with you the benefits of receipt management and how it helps start-up entrepreneurs and business owners to improve their business performance.

Table of contents

  1. What is receipt management?
  2. Digitize your receipt management task
  3. Shoeboxed – who we are and what we offer
  4. Conclusion

A receipt is a piece of paper that contains the most important information of the transaction of 2 parties.

1. What is receipt management?

It means what it sounds. Yes, you are not reading it wrong! Receipt management just simply means managing the receipts through the practice of organizing, filling, and profiting by keeping track of the receipts accurately.

2. Digitize your receipt management task

For an old-style receipt management system, you need a pen, a set of paper, and a calculator to record and totalize your expenses. Nowadays, with the development of technology, you can store those receipts in your computer just by a scan, and even get insight into your expenses just by a few clicks.

It is easier when tracking your business performance

Normally, small business owners deal with two types of receipts on a daily basis. One is the record of what they have spent (for eg. payment of utilities such as electricity, water, etc.) and the other is the record of purchases their customers have made. After scanning your receipts and having the raw data, you can customize your monthly expense by sorting chronically, by the vendor, or even by type of product and so on. So by digitalizing the receipts, you can monitor the performance and profit for each month, what needs focusing, and what needs to be omitted.

It is a lot simpler when applying for a tax deduction process

Having your expenses digitized can also reduce your time preparing for the tax deduction process. For example, if one type of expense is considered tax reducible, other relevant expenses in the same category might also be tax-deductible. Even though there is not 100% that your tax payment can successfully get deducted, you still get a higher chance just by organizing your receipts.

It is faster when preparing for the auditing process

Receipts are evidence of your business performance when it comes to the auditing process. As mentioned above, when scanning your expense receipts, you also store a soft copy of them on your computer. Therefore, to prepare for the auditing process, you can easily retrieve the pictures of those receipts with just 1 click.

3. Shoeboxed – who we are and what we offer

We are Shoeboxed. We offer a service that helps not only individuals but also organizations with their receipt management tasks. 

We help you turn your receipts into digital data so you can keep track of them easily. Our team members will double-check if the information is correct or not so please rest assured that the digital data are verified. With the data in your hand, you can freely customize your data based on your preferences. You can also create the expense reports on your own for tax preparation or reimbursement as well as the auditing process. 

Also, with some more techniques, you can have a broader and deeper view of your business performance as well. 

How our service works

1. You can send us your receipts for free with our postage-paid Magic Envelop and we will scan them for you. You can also scan the receipts by yourself with our mobile applications (compatible with both Android and iOS).

2. We extract all the key data of your receipt so you can easily keep track of them. To view the full scanned image of your receipt, you just need to click into the expense.

3. For customizing the report, you can use our categorizations, or create your own which fit your needs. You can export and download them anytime, even the scanned ones.

We offer different plans for different purposes so please visit our website or contact us for more information about which plan is best for you. And don’t worry, we also offer a 1-month trial so you can test first if we are what you are looking for. 

4. Conclusion

With those benefits mentioned above, the importance and the necessity of receipt management are undeniable. Income statement, Business performance tracking, Tax deduction procedure, Auditing process become easier and faster just by a few simple steps. Last but not least, no one wants to collaborate with an unorganized partner. Therefore, having your accounting desk clear will help not only boost up your business performance but also strengthen your image in the market.

A 5-Step Guide to Manageable Tax Prep for Entrepreneurs

Not only are taxes time consuming, confusing, and a nuisance, but they can also be a drain on your wallet if you don’t prepare well. This is especially true for entrepreneurs who, aside from having to deal with the complicated tax filing process of running a business, also have to actually run the business.

If there’s one thing all entrepreneurs can agree on, it’s that they dread tax season.

In fact, a recent survey by the National Association of Small Business (NSBA) reveals that 38 percent of small businesses reported they spent more than 80 hours a year dealing with federal taxes. That’s two whole workweeks! That same survey found that almost 50% of small businesses spend $5,000 or more annually on the accounting process alone—before paying their taxes!

Not only are taxes time consuming, confusing, and a nuisance, but they can also be a drain on your wallet if you don’t prepare well. This is especially true for entrepreneurs who, aside from having to deal with the complicated tax filing process of running a business, also have to actually run the business.
Whether you choose to do taxes on your own or hire an accountant this year, here’s a quick guide on how to knock tax season out of the park:

1. Familiarize Yourself With the Lingo

One thing we shouldn’t complain to the IRS about is the amount of tax breaks they offer. Tax breaks give small business owners and freelancers a great opportunity to win back some of that money they’ve been spending on their business, and it’s a unique way to encourage entrepreneurship.

However, there is a small caveat to this: it’s hard to keep track of what’s what. There are important differences between deductibles, refundable credits, and non-refundable credits. Each can help you in distinctive ways, so it’s useful to know which expenses qualify for which tax break as you track your finances throughout the year. Investopedia and the IRS website are helpful tools that can break down tax vocabulary into simple terms.
 

Deductibles

Benefits: Lowers taxable income and total tax liability. Can help with items that represent reductions in ability to pay tax (i.e. casualty losses).
What Does That Mean: Because deductions cannot reduce taxable income below zero, their value is limited to the filer’s tax liability before applying the deduction. Value depends on the taxpayer’s marginal tax rate, which rises with income.
Examples: Health care expenses, mortgages, car loans, investment-related expenses
 

Refundable Credits

Benefits: Decreases a person’s tax liability. Same value for all taxpayers with tax liability at least equal to the credit.
What Does That Mean: Treated as payments of tax you made during the tax year. When total of credits is great than total tax owed, you get a refund for the difference. Credits are more appropriate for subsidies provided through the tax system.
Example: Earned Income Credit, Additional Child credit, Small Business Health care credit.
 

Non-Refundable Credits

Benefit: Lower tax limit as low as it can go. Represents the majority of credits.
What Does That Mean: Credit cannot be used to increase tax refund or to create a tax refund when you wouldn’t already have one. Savings cannot exceed amount of tax you owe.Example: If you only owe $200 in taxes, and the only credit you’re eligible is for $500, the $300 difference is non-refundable.
Example: Child and Dependent Care Expenses credit, Saver’s tax credit, Adoption tax credit, Foreign tax credit.
 

2. Don’t procrastinate

Unless you want to have a very stressful week, don’t wait until right before April 18 (note – usually tax day is April 15) to prep and file your taxes! Last year, the IRS reported that 28% of Americans waited until the last few weeks before tax day to file their return. Sure, you can file for an extension if you can’t make it before the IRS deadline, but there are drawbacks to this, like late fees. And, just because you file late doesn’t mean you get extra time to pay taxes if you owe the government money.

Plus, when you take your time to carefully approach a tax filing, it won’t seem as stressful or time consuming. You’re more likely to make an error or miss out on a deduction if you rush the process.
 

3. Stay organized

By far, the easiest way to minimize the hassle of tax season is by staying organized and keeping updated records of receipts, payments, and expenses. The IRS demands documented proof for claims, so having everything stored and accessible can reduce a substantial amount of time and pressure.

Organization also helps maximize deductions and reimbursements without the hassle of scrambling to find misplaced financial records. It also makes it possible to file taxes at the earliest possible time because paperwork is readily available at your fingertips.

Shoeboxed’s mission is to streamline this process so that you can focus on more important things during tax season, like running your business or taking care of your family. We process and organize your receipts so that vendor, total amount, date and payment type are extracted and available in a searchable online account—without you ever having to lift a finger. You can also tag receipts as reimbursable or deductible so when you file taxes, your documents are already catalogued appropriately.
 

4. Stay informed

There’s a lot to swallow these days when it comes to tax codes, especially since the IRS makes changes on a yearly (and sometimes, even seasonal) basis. It doesn’t hurt to take some time researching professional blogs and news sites that can keep you informed on the latest tax changes. The extra initiative will take a few hours of time on your end, yes, but not nearly as much time it would take to prep taxes with little to no knowledge on how to maximize returns. This is especially helpful for entrepreneurs who do not have their own accountant.

Without a guiding hand, it’s easy to make misinformed decisions with tricky nuances (like filing status, for example). Some helpful sites that give excellent pro advice are Don’t Mess With Taxes, TaxGirl and AICPA.
 

5. When in doubt, ask a pro 

With an endless supply of information, the Internet of things can answer any question you may have related to taxes. Sometimes though, having 10+ pages pulled up with an overwhelming amount of information can make material difficult to digest. If your questions are very intricate and situational, it may be best to approach a tax expert or CPA. Examples of these questions may include:

  • Do I have a limit for my charitable contributions?
  • Should I itemize deductions? How in-depth?
  • When should I contribute to an IRA?
  • Should I file jointly, as single, or as head of household?
  • I have all these miscellaneous business expenses and reports, but which ones should I keep for reimbursements and deductions?

Sometimes it’s easy to do a quick Google search for these common tax questions. Other times, the answer depends on your business situation, among other variables.

If you have an accountant, keep in touch with them throughout the year. There’s no reason you should wait until tax season every year to speak to them. CPA’s are experts in their field and they’re a great resource that can put you up to date with all the latest changes in tax policy. Stay organized, plan ahead, and you can get the most out of your tax season.

Helping Business Travelers Stay Healthy and Productive

With Shoeboxed there has never been one “best” way to use our service to stay organized. And after processing over a billion dollars of expense data since 2007, we say that from years of firsthand experience!

Shoeboxed takes enormous pride in serving clients from around the country and across the globe, all of whom use our service in a myriad of ways to fulfill a whole host of organizational needs in both their personal and professional lives.

Today’s post features Marcey Rader, founder of MarceyRader.com!

Aside from being an entrepreneur, personal trainer, triathlete, coach and blogger, Marcey is also one of our local Shoeboxed users! We were lucky enough to have her join us in our office last week to kick off our new user success video series.

Have your own Shoeboxed success story? If you’d like to be featured on our blog, reach out to Emily at emily@team.shoeboxed.com.