Proven Unique Receipt Tracking Feature: Human-Verified Data Extraction

In the business world today, data is the real power. It is the solid foundation for nearly every decision-making within a business. To build a valuable database, a company needs to master the first step – data extraction.

Facebook, Amazon, Google, and Apple are all modern-day tech titans worth an estimated $4 trillion. But they weren’t always this size or this valuable. How did they grow to become so powerful? The answer is data.

Facebook has enough data on its average user to fill a 400,000-word document. Meanwhile, Google has more than seven times that amount or the equivalent of roughly three million-word paper per user. These giant tech companies can collect every data right down to what stickers we use in posts and messages.

In this article, we’ll define data extraction and its role in finance and management, as well as show you the simplest way to to extract data from one of your most frequently used documents – expense receipts.

What is data extraction? 

So what exactly does it mean to extract data? 

Data extraction is the process of getting data from a source for further data processing, storage, or analysis elsewhere. Data extraction is the first step in a data ingestion process named ETL, standing for Extract, Transform, and Load. The purpose of the ETL process is to move, transform and optimize data for analytics. 

Data is typically analyzed and then crawled through to get relevant information from the sources such as customer databases or documents. There are many reasons, uses, and examples of how the technology is used, including receipt scanning and data extraction, which we’ll get to later.

A great example of data extraction is scanning job application forms. Let’s say you’re a tech company looking to hire new software developers. But you require specific qualifications, skills, or even hobbies. It’s a high-paying job, so your company receives thousands of applicants.

Going through these job applications can be time-consuming to determine which candidate meets the necessary criteria and who doesn’t.

Data extraction comes in and helps us resolve the trouble of combing through a vast amount of forms. Data extraction technology goes through the applications, sees who matches the company’s specific needs, and discards the rest, saving valuable time, money and person-hours. 

Why do businesses need data extraction?

Data extraction is a vital process to automate data collection for analysis. The process provides necessary data from various sources like invoices, emails, or contracts. These data help automate processes and provide valuable insights and analytics for decision-making. 

Data extraction is also a fundamental part of many complex and technical procedures, such as improving legacy databases, consolidating resources following a merger or acquisition, or smoothening internal operations by combining data from different divisions and departments. 

Below, we’ve listed five significant benefits of data extraction for your business.

Improves accuracy & reduces human error

By automating data entry processes for repetitive tasks, data extraction tools can help improve the accuracy of your data inputs by reducing human errors. If your staff is entering large amounts of data day in and day out, the likelihood of errors and inaccuracies rises. These can include incomplete records, missing/incorrect information, and duplicates.

With an automated process for data extraction, you can remove these errors and get more accurate data overall which is great for your business as you can make better decisions based on actual data.

Increases employee productivity

Employee productivity is a crucial component of a successful business. Removing the need for manual data entry means your staff can spend more time on essential tasks that add more value to your business.

Your employees will have a more positive outlook because they are using their skill sets to complete more meaningful tasks instead of monotonous data entry. Allowing employees to have time and energy to be creative and innovative results in higher job satisfaction, increased productivity, and a better working environment.

Improves visibility

Using data extraction allows your team to get their hands on data faster. The simple process of extracting and storing data in a cloud or a database means it is more visible and accessible to anyone in your business that needs it. 

Saves you & your business time

Time is money, as they say. Wasted time can prove costly for businesses.According to a study, automating tasks could save up to 2 hours for employees and 3 hours for business leaders per day. Business owners should consider using tools that help improve processes and save time. When used correctly, data extraction tools can save your business time, giving staff time to concentrate on more critical tasks.

Helps reduce costs

By automating long and repetitive tasks where possible, businesses can save money in both the short and long term. In the day-to-day running of your businesses and as it grows, you don’t need to worry about scaling and investing in a large team to handle your data needs. In conclusion, regardless of your business type, extracting data is an essential tool in both financial and managerial aspects.

What is data extraction for receipts? 

As we all know, a receipt shows relevant details of a given financial transaction. Data extraction for receipts is an automated process of extracting and organizing critical data such as the date of purchase, quantity, and total payment from a receipt for further usage. Below is an example of extracting critical data from a receipt. 

Thanks to advanced modern technology, businesses have been experiencing an automating system of data extractions from receipts using AI. In particular, OCR (Optical Character Recognition) technology can read your receipts almost as perfectly as a human being by scanning data through handwritten or electronic receipts. Not only that, but it can also convert data into digital text so that we can store and analyze that information. 

If it may sound too good to be true, let’s look at this real-life experience of the data extraction process for receipts!

Image: Esther Schindler – Shoeboxed Review

The image above is a shared example from one customer using Shoeboxed software to extract data from her receipt. As you can see from Esther’s receipt, AI technology has scanned and automatically filled in a report with all of the essential information, including date, currency, total amount, tax, etc. Additionally, a digital version of the receipt is on the phone, laptop, or PC.

Why do businesses need to extract data from receipts?

In the past, most employees (especially accountants) had to manually read every single receipt to find the required information for expense reports or bookkeeping purposes. This procedure was not only time-consuming and tiring but was also the cause of many human errors which impacted the chain of work and productivity of the whole business. 

More and more businesses have eliminated that manual process to switch to automated receipt data extraction system because of its numerous advantages. Here are just a few benefits that data extraction from receipts brings: 

Effectively tracking expenses

Losing or forgetting about receipts is commonplace in business. Employees can now just take a photo of the receipt and have all data recorded immediately, with no worries of losing or forgetting the evidence of expense. Accordingly, it loosens the burden for the accounting department and helps accountants keep track of expenses more productively. 

Quick reimbursement 

A receipt is usually tagged along with an expense export. The purpose of the report is to list the items you’ve made a payment on behalf of the company and to request a reimbursement. Hence, a company could receive hundreds of expense reports every month. To avoid inconsistencies, receipt data must be processed properly. That’s why receipt data extraction software is essential for managing these receipts and quickening payments.

Reduction of accounting errors

Many organizations still rely on their accountant to manually input information held in papers in their systems. This leads to incomplete records, missing/incorrect information, and duplication. By automating the data extraction process, structured data gathered will include fewer mistakes, and business reports will be more accurate. 

Efficient supply chain  

A company cannot focus on improving the quality of its products or services unless it has proper supply chain planning. To ensure the supply chain runs smoothly, the flow of information relating to worker deployment, inventory, delivery, demand and supply analytics, and so on must be simplified. 

One way to do that is to digitize receipt data processing. Receipts and invoices include important supply chain information. Unnecessary delays can be eliminated by automating the extraction and intelligent processing of this data. All deliveries will then be on time, and overall efficiency will improve substantially.

By extracting data to keep track of your business’s receipts can help business owners understand and control the company’s cash flow and spending budget better. As great as it sounds, there’re still some issues relating to this approach because no-AI system is perfect (or maybe not yet!). 

Fortunately, we have a perfect solution for it – human-verified data extraction! 

Shoeboxed human-verified data extraction feature

AI tools tend to be highly accurate, but errors can occur. Many external factors can impact the performance of OCR technology, such as:

  • Poor handwritten text
  • Faded text
  • Small fonts
  • Noisy or blurred images
  • Camera motion and shake
  • Watermarking
  • Crumpled paper

If you have encountered one of those situations, don’t worry! Shoeboxed’s got it covered for you! 

Our team is well aware of all the troubles that customers might have during their experience using automated data extraction for receipts. That’s why we came up with this unique service to provide the best quality data for you: human-verified data extraction. Let’s simplify how Shoeboxed’s data extraction system works in the following four steps:

  1. A customer can send receipts to us physically through which we call Magic Envelope or upload them digitally.
  2. Our AI technology scans and collects data from your receipts.
  3. A team of data entry experts goes through each receipt to check, correct errors, and verify the accuracy of the extracted data.
  4. You then can find your neatly extracted data directly on your Shoeboxed account. 

Choosing our service ensures the best quality of your data extraction with the most accurate results. No more risk of missing information as your data extracted is corrected and verified by humans. The verification process is also super speedy when it can take only a few hours to 1-5 days, depending on your submission method and Shoeboxed subscription plans. 

Shoeboxed integrates with many popular accounting applications. It can also automatically import receipts from Gmail into your Shoeboxed account. Because of the excellent integration feature that Shoeboxed has to offer, you can say goodbye to manual entry, missing inbox receipts, and headaches! 

Go paperless!

How businesses control and manage receipts significantly impacts their performances. As important as it is, this process sometimes is not taken care of well enough due to its bulky nature.

Automation of data extraction is an innovative and beneficial choice for businesses. Shoeboxed ensures every single receipt goes through a systematic and thorough data extraction process. More importantly, the data is examined and verified by our data experts. 

We care about our customers and their business, even down to a single receipt!

5 Receipts Small Business Owners Should Take Extra Care to Keep

Holding on to detailed receipts for expenses is one of your best defenses in an audit. Receipts also act as a log, allowing you to jot down important context about your (sometimes costly) expenses. Of course, not all receipts are created equal, so we’ve compiled a list of five, highly scrutinized receipts for which you’ll want to keep receipts.

Holding on to detailed receipts for expenses is one of your best defenses in an audit. Receipts also act as a log, allowing you to jot down important context about your (sometimes costly) expenses.

Of course, not all receipts are created equal, so we’ve compiled a list of five, highly scrutinized receipts you’ll want to keep.

1. Meal & Entertainment Receipts

Winning clients and building relationships are two of the many reasons we like to break bread with business contacts. Unfortunately, the line between “contacts” and friends is often blurred, making this an expense the IRS likes to scrutinize. For that reason, it’s best practice to keep receipts handy and properly documented in case of an audit. This includes recording information about who attended the meal and the purpose.

Shoeboxed Pro Tip: You can record this information using Shoeboxed in the “Notes” field for each receipt. When you submit an expense, simply include the initials of everyone who attended and a quick description of meeting purpose in the Notes section. Or if you use Magic Envelopes, you can jot down the information on the receipt and then add the information in the Notes field once the receipt has been processed. Simple as that.

Add a note to a Shoeboxed receipt by clicking on the Notes field in the receipt details
In the Shoeboxed web app, you can add receipt information like client name or meeting purpose under the “notes” section. Better documentation of Meals and Entertainment receipts will protect you from audits and verify that the expense is indeed deductible.

 

2. Receipts from Out of Town Business Travels

Out of town business travel generates tons of receipts from airline tickets, taxis, meals, laundry, lodging and more. Of course, business travel can also be mistaken for “pleasure”, making this another IRS favorite prone to audit scrutiny. Receipts verify what was purchased on the trip and also act as a travel log of where time on the business trip was spent. Some important factors that determine eligibility include: how much of the trip was personal in nature, if the trip was away from your tax home and if the amounts are justifiable.

Shoeboxed Pro Trip: When traveling, make it habit to submit receipts as you make the purchase — don’t wait until the end of your trip to document your paper trail. Using the Shoeboxed Receipt and Mileage Tracker app can help you achieve this, and it can also eliminate the possibility of losing a receipt. You wouldn’t want to lose reimbursement or deduction money because of a misplaced piece of paper!

Use Shoeboxed to track receipts on-the-go as you travel on business trips, like Uber ride receipts
1. Receipts verify business expenses used on business-related trips & keep a time log of your travel activities.

Use Shoeboxed to track receipts on-the-go as you travel on business trips, like Hotel stay receipts
2. Keeping track of receipts as you buy when traveling eliminates the risk of losing proof of purchase.

Use Shoeboxed to track receipts on-the-go as you travel on business trips, and then create expense reports to keep the deductible expenses organized
3. At the end of your trip, organize deductible receipts by creating expense reports right from your phone.

 

 

 

 

 

 

 

3. Vehicle Related Receipts

“Mixed use” assets, like a vehicle used for both personal and business purposes, require extra care to distinguish when they are being used for business and when they are not. Since only the portion of use that is for business should be counted in the company’s books, keeping clear and detailed records of when, where and why a vehicle is used for business purposes helps to establish what portion of use is business related.

The portion of use that is business related (e.g. 20% of use is for business) can then be applied against any vehicle related expenses (maintenance, parts etc). Always keep a detailed receipt (as opposed to a credit card statement) that lists what items or services the vehicle needs.  Remember, if an auditor can’t easily establish that a payment to Costco was for car tires and not for Tide, chances are that vehicle-related expense won’t be considered for business purposes.

Shoeboxed Pro Tip: Use the Shoeboxed Receipt and Mileage Tracker App to automatically track mileage using your phone’s built-in GPS when traveling to and from business meetings. Not only will the app record the precise start and end points of your trip for detailed documentation, but it will also apply the standard mileage rate.

Use Shoeboxed mileage tracking to keep accurate records of business expenses related to vehicle use
1. Drop a pin whenever you want to start, pause or end a trip to make sure you are maximizing deductible mileage rates.

Use Shoeboxed mileage tracking to keep accurate records of business expenses related to vehicle use
2. Adding a trip name and a note to distinguish the business-related nature of the trip will ensure it is deduction-friendly.

Use Shoeboxed mileage tracking to keep accurate records of business expenses related to vehicle use
3. Shoeboxed Mileage tracking syncs with your phone’s built-in GPS for accurate documentation of vehicle trips.

 

 

 

 

 

 

 

 

4. Receipts for Gifts

Gifts are a thoughtful way to build rapport, however, there are several nuances to be aware of. For example, deciphering whether concert or sporting event tickets are considered ‘gifts’ or ‘entertainment’ depends on whether or not the gift giver goes with their client or business prospect. Documenting this kind of information on the gift receipt is key to allowing your accountant to treat the expense correctly for tax purposes. For more detailed information on gift expense limits and interpretation, check out this publication.

Shoeboxed Pro Tip: If you want to keep better track of gift receipts, add a “Gift” category and assign that category to receipts that would be considered gifts for deduction purposes. You can also add information which can validate whether or not the receipt can be considered a gift in the “Notes” field under receipt details.

Manage receipts with Shoeboxed by using customized categories to organize expenses,
Add a “Gift” category and assign them to expenses that could be deducted as gifts. Organizing receipts by category can also help you and your accountant treat the expense correctly for tax purposes.

 

5. Home Office Receipts

Like vehicles, a home office is considered “mixed-use” and the expenses associated with claiming a home office are therefore closely scrutinized. The key to properly accounting for home office expenses is to establish what portion of the home and the home’s expenses the office represents. If the home office makes up 20% of the home’s space, for example, then this proportion of expenses is deemed common to both the home and home office such as rent, electricity, internet to name a few. Keeping the bills and proof of payment for the home expenses with the business’ files is important in case these home office related expenses are challenged. Be sure to read the IRS publication on home office expenses for more information on what shared use items do or don’t qualify.

Shoeboxed Pro Tip: Documents other than receipts (like bills and invoices that prove home office expenses) can also be used to protect your business in case of an audit. Luckily, you can upload a variety of documents to Shoeboxed — we don’t just scan receipts!

Shoeboxed can organize a variety of documents like bills, invoices and contracts to verify expenses, not just receipts
Home office deductions can get tricky because shared space with the “home” complicates the use of business expenses. Documents other than receipts (like bills and invoices that prove home office expenses) can be used to protect your business in case of an audit when receipts alone cannot distinguish home vs. office use.

An original version of this article was first published on the Shoeboxed Blog in November 2013 and was written by Ian Crosby, the CEO of Bench.co, an online accounting firm. This version has been altered to reflect IRS updates and new Shoeboxed features. 

The Brand New Shoeboxed Receipt and Mileage Tracker for iPhone and iPad Has Arrived!

Today we announce the release of the new Shoeboxed Receipt and Mileage Tracker for iPhone and iPad! It is available now as a free download in the App Store. The new 6.0 version of the app has been optimized for iOS 9 and includes a brand new interface along with an entire new suite of features and updates.

Today we announce the release of the new Shoeboxed Receipt and Mileage Tracker for iPhone and iPad! It is available now as a free download in the App Store.

The new 6.0 version of the app has been optimized for iOS 9 and includes a brand new interface along with an entire new suite of features and updates. Users can submit receipts, track expenses and create expense reports faster and more effortlessly than ever right from their mobile device.

Mobile Screenshots Shoeboxed

Here’s what’s new:

  • Advanced Receipt Filters
    The old receipt filter tab has been replaced with sliding category tags, allowing you to filter by one or multiple categories at a time while still being able to scroll through receipts. 
  • Select Categories at Point of Capture
    You no longer have to wait until a receipt is processed to categorize an expense. Simply snap a photo of a receipt, select the desired categories, then click save.
  • Expense Report Overhaul
    Email receipt tables are now optimized for Apple mail and Gmail mobile with a sleeker look. The expense reporting process has also been polished, making it even easier to get reimbursed!
  • Simplified Interface and Navigation
    Say goodbye to the dashboard and hello to our new navigation bar! Easily get to wherever you need to go within the app by clicking any of the tabs in the new bottom navigation bar. We’ve also made it easier to manually edit DIY receipts, and you will also notice that all of your receipts are now neatly organized by date!
  • 6s 3D Touch Shortcuts
    With the addition of Quick Actions, iPhone 6s users can start tracking a trip, scan a receipt, and create an expense report directly from their home screen with a single press of the app icon. We also introduced Peek and Pop – a neat feature that allows you to edit receipt details and instantly get reimbursed for an expense in seconds by hard pressing a document inside the app.

We’re very excited about this release – but we couldn’t have done it without our awesome Beta testers and user feedback. A huge thanks to Shoeboxed users for helping us make this our best app yet!

Head on over to the App Store now to download the brand new Shoeboxed Receipt & Mileage Tracker!