What is a Bank Transaction Receipt and its Benefits for Your Business

Whenever you visit a bank and make a monetary transaction, such as a deposit or withdrawal, the bank will provide you with a bank transaction receipt. This is how banks keep an accurate and up-to-date record of all financial transactions conducted at a given location by various account holders. 

Since this financial term is used in many situations in daily life, it’s good to have a basic understanding of bank transaction receipts and how your business can benefit from them. 

What is a bank transaction receipt?

A bank transaction receipt (also known as a bank receipt) is a standard form of documentation for most financial transactions. Customers who go to banks or other financial institutions to conduct any monetary transactions should expect to receive a bank receipt for these transactions. 

Besides transactions involving deposit accounts, these receipts are also sent to customers who make loan payments, credit card payments, and conduct other similar types of transactions. Bank transaction receipts are also given to businesses that conduct financial transactions at a given bank or financial institution. 

Banks also keep their own copies of bank transaction receipts. This ensures thorough record-keeping for all financial transactions for each of their various account holders. These receipts are also a form of collateral. If a customer makes a request, the bank will have a detailed record of the transaction to refer back to. Whether a bank employee makes an error or an account holder miscalculates a portion of the transaction, bank transaction receipts make it much easier to resolve disputes. 

In the past, bank transaction receipts were paper slips. However, in recent years, many banks have begun to offer digital copies of receipts (by email,  text message, or other methods). 

Using digital receipts rather than paper receipts enables the bank to save on printing costs. Digital receipts also provide convenience for account holders as they no longer have to keep track of numerous paper receipts. 

Bank transaction receipt details

A bank transaction receipt contains detailed information about a financial transaction conducted at a particular bank. The form of the receipt may vary by bank or institution, but all bank transaction receipts must include these essential details: 

  • Bank account numbers
  • Account holder name(s)
  • Date of transaction
  • The total amount of the transaction

Sometimes a bank transaction receipt will even include detailed information such as the employee number of the bank employee who conducted your transaction. 

How to use bank transaction receipts for bookkeeping

Given the importance of bank receipts to businesses, you can make use of these documents and turn them into a helpful tool for your bookkeeping practices, either for personal or business expenses. In fact, many banks and other financial institutions recommend balancing your account books on a monthly basis and referring to your bank transaction receipts throughout the process. It’s common to go over monthly bank statements and cross-check this information with all of your bank transaction receipts that you have collected for a given month. 

Even if you hire a professional accountant to track your personal or business finances, they will request a copy of your bank transaction receipts. Bookkeepers use this information to track your income, expenses, and other financial transactions impacting your cash flow. This financial data helps keep an accurate and real-time record of your financial activities. 

Bookkeepers also use bank transaction receipts for data entry purposes to track your credit card payments, which can help you control your spending. Bank transaction receipts can even help you improve your credit score over time with good bookkeeping practices

Some people prefer to use receipt tracking mobile apps that automatically track this information in real-time instead of working with an accountant. You’ll no longer have to keep a hard copy of your bank transaction receipts by using mobile apps, as this information is readily available on your mobile device. You only need to make sure that you store these physical copies of your bank receipts before uploading them into a cloud-based system. After scanning your documents with a versatile mobile app, you can free your desk and drawers from piles of paper receipts and keep them for years!

See more: 5 Best Receipt Scanner and Organizer Apps for Small Businesses in 2021.

How to use bank transaction receipts for taxes

Bank transaction receipts can be very beneficial when preparing for tax season. To work on the tax reduction process, first, you need to collect all proof of purchases for your business expenses. Next, you need to find the right tax form and fill in all the details. The last step is to submit the form and then you’re good to go. 

Business owners can use their bank transaction receipts to balance their accounts. You can do this by reviewing the monthly bank statement and comparing the amount and transaction dates of items listed on the statement with their bank receipts. 

Typically, businesses will keep their bank receipts until the end of the year for tax preparation purposes. Individuals who claim tax deductions for certain types of expenses must also keep copies of bank transaction receipts to prove that they qualify for deductions related to banking transactions, such as interest charges or mortgages.

The bottom line

Bank transaction receipts, along with business plans, marketing strategies, and financial reports, are essential documents for all businesses. Keeping and managing these documents properly can help track your business’s financial performance, solve disputes, keep the bookkeeping up to date and even claim tax deductions with ease. A simple yet effective way to achieve this is to digitally scan and store your important documents. 

Shoeboxed is a painless receipt-scanning and organizing solution for freelancers and small business owners. After scanning your receipts with the Shoeboxed app, our OCR engine will automatically extract the most important data points and automatically categorize them by vendor, total spent, date, and payment type. After that, our staff will double-check to ensure that all of your data is human-verified, categorized, organized, fully searchable, and available on any device. Shoeboxed keeps your bank transaction receipts in a safe place with high accessibility. 

See also: How To Scan A Receipt Digitally With The Shoeboxed App.

The Shoeboxed app is available on iOS and Android. You can try Shoeboxed for free before choosing the perfect plan for your purposes!

What Are The Differences Between A Bookkeeper And An Accountant?

In this guide, you’ll learn what differentiates a bookkeeper vs accountant, which your business should hire and when to employ them.

Regardless of your business’s industry, size, and model, bookkeeping and accounting professionals play an essential role in the financial health of your business. While many people know that a bookkeeper is not the same as an accountant, they can’t put their finger on what exactly differentiates a bookkeeper vs accountant. 

In this guide, you’ll learn what separates an accountant from a bookkeeper, which your business should hire and when to employ them. 

Bookkeeper vs. Accountant: An overview 

A bookkeeper starts and an accountant finishes. In other words, a bookkeeper handles the initial stage of an accounting process which is recording and organizing daily financial transactions. An accountant takes up the work done by a bookkeeper and carries on the remaining tasks of the accounting cycle. Accountants are then responsible for analyzing and interpreting data gathered by bookkeepers, consulting with business owners, and preparing financial reports. 

To look at the differences in detail, we will compare bookkeeper vs accountant in two major aspects: job description and required credentials.  

Bookkeeper vs. Accountant: Job description 

Duties of a bookkeeper:

The practice of bookkeeping is far from new to the human race. Bookkeeping may have existed as early as around 2600 B.C. A bookkeeper’s core duty is to maintain complete and accurate records of the money coming in and out of business in a general ledger. Bookkeepers keep track of daily transactions in a consistent, systematic way, and their records allow the accountants to perform their jobs. 

Apart from the primary task of managing accounting ledgers, there are many other responsibilities that a company would ask from a bookkeeper.

A bookkeeper’s job description typically includes: 

  • Entering and correcting Accounts Payable and Accounts Receivable
  • Reconciling accounts and matching bank transactions
  • Issuing invoices and processing payments 
  • Managing expense reports 
  • Processing payroll 
  • Adjusting entries where necessary and as instructed by the accountant

Besides the above-mentioned typical responsibilities of bookkeepers, their duties vary depending on the industrial environment and business nature. For example, if you own a cannabis business, you may want to look for someone who can use seed-to-sale software (Biotrack, MJ Freeway, METRC, etc.) Or a bookkeeper who knows how to deal with IFTA (International Fuel Tax Agreement) will be an ideal choice for trucking businesses. 

Duties of an accountant: 

 An accountant analyzes the financial data collected by the bookkeeper to provide vital business insights and financial advice to the business owner. Accountants look at the big picture, putting key components of your business’s finances together and presenting them via financial statements. Such reports offer you a clear view of where your finances stand and what they imply, as well as what you can and should do about them and where you may anticipate your company will go in the near future.

The following are a few examples of typical requirements in an accounting job description: 

  • Preparing accounts and tax returns
  • Monitoring business spending and budgets
  • Auditing and analyzing financial performance
  • Administering payroll
  • Compiling and presenting financial and budget reports
  • Providing tax planning services 
  • Providing timely forecasts and important insights for future growth

Accounting work is often office-based, with usual 9 to 5 working hours. However, the workload typically becomes much greater during peak seasons like the tax period and the end of a fiscal year.   

In small businesses, an accountant may undertake all of the activities associated with the accounting process, but in larger businesses, various accountants are often in charge of different accounting areas. This might cover both financial and managerial accounting.

Bookkeeper vs. Accountant: Credentials and licensing 

Requirements of a bookkeeper:

In most cases, bookkeepers don’t need to acquire any certificates to handle the books. Businesses or employers usually only require their bookkeepers to have a high school degree providing basic math, communication, and computer skills. Other necessary skills like time management, organization, and multitasking can also be gained in high school.

While bookkeeping is not a licensed profession, businesses sometimes ask for a certification as proof of expertise. Many big organizations offer accreditation and licensing to bookkeepers, such as the American Institute of Professional Bookkeepers (AIPB) and the National Association of Certified Public Bookkeepers (NACPB).

Software companies for bookkeeping and accounting such as QuickBooks, Excel, Xero offer certifications to highlight bookkeepers’ skills and abilities using these software products. So if your accounting system is heavily dependent on software, a bookkeeper with a sophisticated understanding of accounting-support programs should be your best option. That’s when these software certifications can help you. 

Requirements of an accountant:

Although not always mandatory, an accountant needs to obtain at least a bachelor’s degree in accounting or related fields like business, economics, finance, or management. 

In addition to a university degree, an accountant can earn advanced accounting certificates to demonstrate their competency, such as a CPA certificate. A CPA is a “certified public accountant” who has satisfied the state’s standards and passed the Uniform CPA test. They must also meet continuing education criteria to keep their certification. 

When interviewing for a CPA, seek someone knowledgeable about tax law, proficient in accounting software and with excellent communication skills. They should be familiar with your sector as well as the unique demands and expectations of small enterprises.

When to hire a bookkeeper vs. an accountant

If your business is still in the early stages and you feel confident managing all the receipts and recording transactions, you may not need a bookkeeper yet. Do your own bookkeeping and hire a part-time accountant as a financial consultant.

However, when your business starts growing you’ll soon be overwhelmed by the paperwork. Then, it’s the right time to get a full-time bookkeeper to record daily data and keep your finances organized. Plus, an accountant at this point can help you create a long-term business plan, handle taxes neatly or advise you on the legal structure. 

Before you finally decide between a bookkeeper vs accountant, consider not only their credentials and expertise but also their cost, reputation, and their experience working in your industry. 

Try Shoeboxed today!

Whether you do your own bookkeeping or hire a professional, receipts managing and organizing still causes a lot of headaches. Shoeboxed can help you digitize every receipt, automatically extract data and categorize them for you within seconds. With Shoeboxed your receipts are stored safely in the cloud, fully searchable and well-organized. 

Get started with Shoeboxed for free! 

What Is Receipt Management? 5 Best Receipt Management Apps For Your Business

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!