Receipt Management: Five Major Cons of Paper Receipts

It’s not new to businesses, accountants, and even individuals who want to keep track of their expenses that receipts are extremely important. In the business world, paper receipts, though dominant, are losing popularity due to an alternative, digital receipts.

A digital receipt can solve all the pitfalls of a physical one, thus proving itself a superior solution. But where exactly do traditional methods fail?

This article lists three major disadvantages of paper receipts. Also, you’ll find suggestions for finding the right receipt management software for your business. 

Why is receipt management important?

A receipt is a document that acknowledges something has been transferred, in other words, a transaction between one party to another. Ownership is changed as a result of receipts. Typically, a receipt includes the following information: 

  • The date and time the transaction happens
  • The number of items purchased or the service performed and the price
  • The time and location of each party
  • VAT charged, if any
  • The method of payment

All the necessary information within a transaction is present on a receipt. Therefore, this creates a transparent transaction and should prevent any misunderstandings and disputes between parties. You may have noticed that a receipt is a precedent if you want a refund or exchange. 

Regarding tax payments, receipts are even more important as they serve as proof of expenses. Countries vary in their tax reporting, but most require some document to prove how much you have paid. In the US, the IRS requires receipts for certain expenses when filing taxes. 

There are several types of important receipts, see also if you are interested: 

Receipt management.

How are businesses doing receipt management? 

There are five receipt management systems that individuals and businesses normally use to handle their receipts: paper receipts, photo/scan solutions, apps with receipt capture technology, apps with auto-match, and direct receipts. According to a study, the time spent on receipt management with each method is as follows:

  • Paper receipt: 13.9 second
  • Photo/scan solution: 9.2 second
  • App with receipt management technology: 4.9 second
  • App with auto-match: 2.8 second
  • Direct receipt: 1.3 second

Except for the first one, all of the other methods are digital. The norm now is that many businesses are digitizing their receipt management, which saves them a potential amount of time. 

Cons of holding onto a physical receipt

A physical receipt may be practical and simple, something we have been too familiar with. And old habits die hard. Every store provides its customers with paper receipts, so why bother changing to digital receipts? Plus, a person may be more likely to look at and examine a paper receipt, double-checking if anything goes wrong with the transaction. 

But resorting to paper receipts brings more troubles than benefits. 

1. Take up much physical space

One receipt might sit well in your pocket. But five receipts do not, let alone a hundred receipts. 

Eventually, with hundreds of thousands of receipts that businesses, even small ones, come into every year, it is indeed very space-consuming. 

With too many in one place, they are more prone to getting lost. One receipt is too small for us to immediately acknowledge that it is gone, too little for anyone to come across it to remember. Going digital, you need only one device to keep all the receipts. 

2. Deteriorate over time 

Receipts are made of thermal paper, with some layers of special coating. Still, they fade away with time, like many other kinds of paper. There are several tips on storing them correctly, thus, preventing them from fading.

A physical receipt may be practical and simple, something we have been too familiar with. And old habits die hard. Every store provides its customers with paper receipts, so why bother changing to digital receipts? Plus, a person may be more likely to look at and examine a paper receipt, double-checking if anything goes wrong with the transaction. 

But resorting to paper receipts brings more troubles than benefits. 

3. Take up much physical space

One receipt might sit well in your pocket. But five receipts do not, let alone a hundred receipts. 

Eventually, with hundreds of thousands of receipts that businesses, even small ones, come into every year, it is indeed very space-consuming. 

With too many in one place, they are more prone to getting lost. One receipt is too small for us to immediately acknowledge that it is gone, too little for anyone to come across it to remember. Going digital, you need only one device to keep all the receipts. 

4. Deteriorate over time 

Receipts are made of thermal paper, with some layers of special coating. Still, they fade away with time, like many other kinds of paper. There are several tips on storing them correctly, thus, preventing them from fading.

These tips can only delay the fading process, storing the receipts for a few more years. Thermal paper deteriorates anyway. Going digital, you do not have to do anything special, and receipts are still there after years. 

5. Difficult to find a specific receipt

It’s hard to find the right piece of paper in a pile containing thousands of others. Even in the most organized workplace, it can still puzzle anyone searching for things, slowing them down. 

A digital document archive with a powerful search function will greatly improve one’s productivity. Receipt management software helps you cut off lots of time finding documents, thus staying focused and engaged in more important tasks.

Finding the right digital receipt management for your business!

There are many digital receipt management software on the market to choose from, Shoeboxed, Expensify, and Zoho Expense, to name a few. With several choices, you may wonder what software is the right one for your business. The answer doesn’t lie only in the software features but also in your business model and needs.

The receipt management software developed by Shoeboxed is an ideal tool for small business owners and managers. 

Shoeboxed is a receipt management application that turns your receipts and business documents into a digital format in just one click by taking a picture straight from your smartphone or scanning a pdf. It automatically extracts, categorizes, and human-verifies important data from your receipts so that you can go over and check your records anytime with ease. Shoeboxed ensures you will always have your receipts securely stored and ready for tax purposes.

Access your Shoeboxed account from your web browser or smartphone app. Stay audit-ready with Shoeboxed for FREE now!

You might also be interested in: Top 5 Receipt Scanner and Organizer Apps for Small Businesses in 2021

The bottom line

Space-consuming, susceptible to deterioration, and difficult to access are paper receipts’ three most visible cons. Now that you know the disadvantages of physical receipts, it is now the time that you switch to digital solutions. This may be the best solution that you make for yourself and your business. 

Business Receipts Basics: What You Need to Keep for Tax Seasons?

As a small business owner, you know that you need to keep track of your business’s financial documents for tax purposes. Those documents include business receipts, bank statements, purchase history, credit card statements, online banking records, and a lot more. 

However, staying on top of those documents isn’t as easy as a walk in the park. Which business receipts should you keep? And for how long? And in what form? This article will answer all these burning questions.  

Which receipts do small business owners need to keep?


According to the IRS, keeping good records will help you monitor the progress of your business, prepare your financial statements, and identify sources of income. From that, you can keep track of deductible expenses and prepare your tax returns easier.

On the other hand, the IRS doesn’t explicitly mention the possibility of being in trouble if you don’t keep the right documents. When it comes to keeping receipts for tax preparation, it’s a good idea to be “better safe than sorry” and keep all documents related to your business. It’s even better to consult with a professional accountant about this. However, as a starting point, here are a few types of business receipts that you should absolutely keep:

Inventory

Did you buy inventories to sell to your customers? Or did you sell things made from raw materials? If so, you should definitely hang on to documents that identify the payee, the amount, and proof of payment for the items. Try to get a receipt for all these purchases. However, if you can’t get a receipt, keep the invoice and canceled check (proof that the check has been paid.)

Business assets

The term “business assets” refers to the property you own and use in your business. Furniture, computers, vehicles, or machinery are typical examples of assets. If you’ve ever tried to file assets for taxes on your own, you know that you’ll have to deal with a complicated thing like “depreciation.”

To make tracking depreciation easier, you should keep track of when, where, and how much money you’ve spent on your business assets. For example, you can keep receipts of when you purchase your company’s computers. You’ll also want to keep records of when you sell one of your assets.

Other business-related expenses

Most of your business receipts will likely fall into this category. Though every business is different, here are the most common examples of business-related expenses:

  • Advertising: Advertising expenses include designing and purchasing business cards, online and offline advertising, billboards, web hosting, etc. 
  • Vehicle expenses: Vehicle expenses such as gas and maintenance fees are tax-deductible, so don’t throw away those receipts!
  • Education expenses: This expense applies when you hire a professional or an education service to train yourself or your employee. Don’t forget to keep your invoice or receipt and your bank records to prove that you paid for the education expenses. 
  • Professional services: This expense applies when you hire a lawyer, accountant, bookkeeper, or graphic designer to work for a certain period of time. You will need to keep the invoice and the receipt when you pay the bill. 
  • Entertainment: Entertainment expenses such as taking clients out for lunch can be tax-deductible, but you need to pay close attention. You have to keep both the receipt and records showing that your activities were directly business-related (e.g., an email invitation for a business lunch.)
  • Networking: If you attend a networking event or conference, you’ll need to keep your receipts, bills, and bank records as proof of purchase.
  • Office supplies: Extra office expenses, such as printers, staples, paperclips, scanners, etc., are tax-deductible. So don’t forget to take the receipts every time you visit office supply stores! 
  • Travel expenses: During your work, you may need to visit a client or attend a conference in another state. Though the IRS requires specific qualifications for deductible travel expenses, you can keep certain receipts or bills of your travel expenses to deduct all or part of a trip. You can check out our article on how to manage your business travel expenses effectively.

How long should you keep business receipts?

In general, you should keep business receipts for three years (from the date you file your tax return). In some special circumstances where fraud or severe tax underpayment is suspected, the IRS might require you to keep your receipts for up to six years. For example, if you underpaid your taxes by more than 25 percent, you will need to keep those records on hand. 

How Shoeboxed can help you digitally store your business receipts

Years’ worth of business receipts can result in piles of papers. Fortunately, no one says that you have to keep all your business receipts in their original paper form. So, what’s the best alternative to save all your documents for any potential IRS audit? 

The answer is to digitize them. As the IRS accepts digital receipts, you don’t need to store physical copies of your bank statements, purchase history, or credit card statements. Today, there are many receipt scanning apps that help you digitize paper receipts and save them for years.

Shoeboxed is an all-in-one receipt management app for small business owners and freelance accountants. With an OCR (Optical Character Recognition) engine and human-verified feature, Shoeboxed ensures that your business receipts are precisely scanned, clearly located, and easy to track. You can then create clear and comprehensive expense reports that include images of your receipts, export, share or print all the information you need for easy tax preparation or reimbursement… within a few clicks. 

Moreover, Shoeboxed‘s mileage tracking and business card storing features make it a one-touch app to store and access all your business’s important information. 
Sign up and go paperless with Shoeboxed today!

How To Send An Invoice Through Email

Every business wants to receive payments on time — who doesn’t? 

While the exact timing of payments depends on your customers, there are some things that you can do to accelerate this process. One of them is to send your invoice via email. 

Read on to find out the great benefits of email invoicing and get practical information on how to send an invoice through email. 

Why should you send invoices via email? 

There is a multitude of reasons why sending invoices via email is beneficial for your business: 

It saves you money

Many businesses opt to send their invoices the traditional way – by post. This comes with a number of incidental costs including delivery fees, stamp fees, stationary fees like paper, envelopes, and more. These expenses may seem relatively small at first, but they add up over the life of a business. 

With email invoicing, you can forget about all of the expenses. Simply attach your invoice to your email, and you’re good to go!

It also saves you time 

Posting your invoices is extremely time-consuming – you have to print the invoices, fill in the required delivery information, package them accordingly and make a trip to the mailbox. You then have to wait and from there it’s in the hands of the delivery company or postal service. Unless you pay for express delivery, delivery dates and times are rarely certain. That means there is no guarantee when your customer will receive their invoice, not to mention the risks of missing or damaged invoices during the process. Emailing invoices can prevent all of those problems. It offers peace of mind and lets you have more time to focus on activities that add core value to the business. 

It is easier to keep track

Sending invoices via email provides an easily accessible proof of delivery securely stored on your computer. Whenever you want to check, you can just go into your “Sent” folder to see the date and time that you sent your invoices. On top of that, you can also request a “delivery” receipt or “read” receipt before sending the email. That means you will get notified when your email has arrived in a client’s inbox and when your client opens it.

It helps you get paid faster

When you send invoice emails, you can technically receive your payments sooner. If your clients receive invoices earlier, they can start the payment process sooner, too. 

how to send an invoice through email

How to send an invoice through email?  

To send an invoice through email professionally, you should follow these three simple steps: 

  • Create a digital copy of your invoice
  • Attach your invoice to the email 
  • Write a formal invoicing email to your customers 

Let’s break them down and look at each step in detail as below:

Step 1: Create an invoice 

You can customize an invoice by yourself using free templates on the Internet. Here are some useful links that offer free invoicing templates:

You can also generate an invoice directly from your accounting or invoicing software if you use one.  

Make sure your invoices are clear, easy to read, and have all the important information like invoice number, vendor and client details, purchase order number, description of products or services, payment options, etc. 

Step 2: Attach your invoice  

Instead of pasting your invoice into the body of the email, attach it as a downloadable PDF file. This enables your clients to save, print, or upload your invoice to their accounting software. Plus, you will leave a professional and caring impression on your customers, which enhances your customer relationships. 

Step 3: Write an email 

Writing emails can be time-consuming, especially if you have a lot of customers to invoice. Using a template can cut down on the amount of time spent on every invoice. Below is an example of a basic template that you can use when sending invoices to your customers: 

Subject: Invoice [invoice number] for [product/service name] due [invoice due date]

Hi [Recipient’s name],

I hope you’re well. Please find the attached invoice [invoice number] for [product/service name], due on [invoice due date] below. Feel free to ask me if you have any questions.

Kind regards,

[Sender’s name]

How can Shoeboxed help you with email invoicing? 

Shoeboxed is a receipt scanner application that turns your document into digital in seconds. It is a well-trusted tool to help businesses, freelancers, and DIY accountants store and organize their receipts. Understanding the rising popularity of email invoicing, Shoeboxed offers some features associated with this process for users: 

Forward or send scanned receipts 

You can forward or send a digital receipt to any email address directly from the Shoeboxed app. This is helpful when you only have the paper copy of your receipts available. Plus, employees in your company can leverage this feature to send a quick expense report (with receipts attached) to you for reimbursement. It can help you avoid fraud and lost or damaged receipts.  

Automatically archive receipts from Gmail

Whenever you receive an invoice in your Gmail inbox, Shoeboxed automatically picks it out and submits it to your Shoeboxed software. Those receipts are then labeled “Sent to Shoeboxed” in your Gmail account. 

Next, Shoeboxed will process your receipts, extract, human-verify, and categorize important data from your receipts. With this feature, you no longer have to worry whether you miss any invoices swimming around in your Gmail inbox. 

Start going paperless today with Shoeboxed!

Want to read more about business? 

If you’re interested in entrepreneurship stories, business tips, or productivity tools, find more posts like this on the Shoeboxed Blog.

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