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! 

What Is The Future Of Fintech And Why Businesses Should Not Resist

Fintech is the most popular term in the 4.0 era. It appears in almost every perspective of life: in common conversation, newspapers and it has even become a trend in businesses. But what is it?

Fintech stands for Finance and Technology. To explain in a simple way, Fintech refers to leveraging technological innovation in financial services and operations. Fintech does not originate from existing monetary systems, but it marks the encroachment of IT into those.

This article will bring you a more multi-dimensional view of Fintech and how businesses benefit in the future of Fintech.

What will the future look like? 

In recent years, Fintech is present in many financial products. From end-user products (such as e-wallets, cryptocurrencies, fundraising tools, …) to products that support operation activities (smart technology services, blockchain, and more). What about in the future? How will Fintech change and what impact will it have on the entire financial industry? 

There are many analyses and forecasts that have been made. However, in general, experts agree with the following statements about Fintech trends:

1. The future of Fintech will be the future of the financial sector

There are many confirmed reasons to assert that the development of Fintech is the development of the financial industry. In other words, the future of the financial sector is Fintech, especially when considering the factors of financial performance, such as cost, quality of service, information security, risk management and safety.

Fintech is and will continue to help reduce the cost of financial services, new technologies continuously eliminate intermediaries and help financial services reach the most efficient level. At the same time, the quality of service has also increased markedly, because the accuracy and agility of intelligent software are really superior to that of humans. The risk assessment process in banks and financial institutions is complex and many stages can be replaced by Fintech’s fast and accurate data analysis chain. Moreover, Fintech has shown significant upgrades in the stages of data control, ensuring security, safety, and security for customers and financial institutions.

Fintech creates critical changes to financial activities. In the future, it is almost certain that financial institutions that do not use Fintech will be left behind. To what extent Fintech reaches out, the development path of the financial market will also follow.

2. Fintech products are increasingly diverse and more innovative than ever

As in many other fields, technology has brought huge changes in the financial industry. Though many people may consider “Fintech” a new term, its countless imprints and obvious impacts on the financial world cannot be ignored.

Fintech products and services are available in all categories, from personal finance, digital banking, payments, blockchain, insurance fintech and other financial services. I’m sure you have heard about virtual money, crowdfunding and big data at least once! 

But that’s just the beginning. Fintech is being invested in more than ever, and many experts expect that a series of super-utility and super-diverse Fintech products will be launched in the near future. 

No one can predict how far digital technology will go, but not many people will be surprised if Fintech can bring superior financial products and completely change the face and the way that the financial industry works.

3. Fintech investments continue to increase

Because of the obvious benefits of Fintech to the financial industry, we can even say that Fintech has become an indispensable condition for a breakthrough in the financial market, investment funds, financial institutions and software as a service (SaaS) sector. Startups cannot ignore this potential factor! 

Although most Fintech startups are still struggling with sales, market share and many other difficulties, new Fintech startups are born every year. And the budgets of investment funds, financial institutions, and even companies outside the industry pouring into Fintech are increasing steadily each year.

This trend will continue for at least the next five years. Especially when the financial market is welcoming more and more young customers every day. They are the generation that grew up with digital devices and technology, so the utilities that Fintech brings are a must to conquer these customers. Fintech’s budget, as well as Fintech’s potential, clearly cannot be neglected!

4. Fintech grows evenly in Asian, European, American, and Australian markets

If most of the other trendy technology products and services usually originate and blast first in the US, Fintech is a bit different. Though Fintech companies and Fintech products are growing most in the US, specifically in the financial centers of Wall Street and Silicon Valley, China is the leading market in the use of Fintech service. Over 60% of Chinese people have access to Fintech, while the rate in the US is over 30%. The reason for this is simple: Fintech services are associated with mobile phones, an indispensable device for young people today. At the same time, young people also tend to be more open to new technology, including finance.

In the early stages, most countries with developed technology and a majority of the young population use Fintech the most, such as China, India, UK, Brazil, Australia… This trend will continue in the future and will soon be balanced in Asia, Europe, America, and Australia.

5. The corporation between Fintech companies and financial institutions will strengthen both sides

Though they have the advantages of technology, innovative ideas, flexible organization, and infrastructure, Fintech companies often lack the ability to replicate the customer base and lack brand reputation to develop on the target market quickly.

In contrast, financial institutions have extensive customer data, long-standing brands, sufficient finance, and operational experience. But with a lack of technology, they require too much time and resources.

The trend of cooperating between these two entities has occurred in the last few years and is expected to remain the dominant model in the coming decades. It is unpredictable whether this cooperation will be “peaceful” forever or if the financial business sharks will swallow Fintech companies or vice versa. Yet, in the short term, this partnership is still promising. It will bring strength to both sides, and help to push both Fintech and the financial system to new heights.

Why businesses should use Fintech 

1. How Fintech changes customer’s behavioral psychology

The popularity of the smartphone has made a huge change in consumer behavior. We are living in an “always-on” culture, which is cultivated by the rapid growth of mobile services and apps. People now can access more information or data anytime, which was impossible before.

More than checking accounts or setting up an online investment, users now want to easily handle financial activities in the same way they check email or surf Facebook. This is a huge opportunity for businesses. Sooner or later, no one will succeed and grow without using the right fintech services.

2. How businesses benefit from the future of Fintech

The rise of Fintech has permanently changed the way companies do business. The traditional direct connection model with a local bank or a traditional investor is no longer the only way.

From crowdsourcing to mobile payments, business owners now have unlimited options. The cost to start a company or expand it has never been lower than it is today!

Fintech companies also cover a wide range of sub-sectors: crowdfunding, peer-to-peer lending, algorithmic asset management, credit scoring, education lending, working capital management, cyber security, quantum computing, and so on. Despite operating in such vast fields, these companies all have one thing in common: they build and deploy technology to make financial markets and their systems work more efficiently and more fruitfully.

Fintech plays an essential role in the SaaS Sector as well. Let’s see some examples of the benefits of software as a service. Cross-border remittance was a deadly trap for business owners, now being reorganized through innovators. TransferWise has completely changed the traditional (and expensive) banking solution when sending money across nations. This helps SME companies and individuals transfer money at a much lower cost than before.

Another SaaS example is Shoeboxed. This is an expense & receipt tracking tool that assists businesses in getting reimbursed fast, maximizing tax deductions, saving time and effort when it comes to accounting.

Final thoughts

The future of Fintech opens up countless opportunities. Businesses can now offer more services than ever before and for a small fraction of what they previously offered.

As we are into the final quarter of 2021, it is time for businesses to pay close attention to the development of Fintech as well as its huge impact on our lives. Understanding the latest opportunities and developments in the field will improve your business situation and help you stay on top of the market.

What is your prediction about the future of Fintech? Leave a comment to share your thoughts with us! 

Find more interesting articles on Shoeboxed

SaaS, Fintech And The World Technology

Looking back at our lives ten years ago, it is surprising how much our world has developed. We evolved from doing things manually to having things done automatically. We evolved from spending hours at the bank to finishing a transaction within just one click. The world has been changing at a flashing pace. Following the world trend in technology, many SaaS and Fintech enterprises have been born and increased astoundingly during the Covid-19 pandemic. The number of SaaS and Fintech companies is also expected to continue to rise even after the pandemic. 

Since both types of business are leading trends in the market, in this article, we would like to introduce to you the relationship between SaaS (Software as a Service) and Fintech (financial technology). 

SaaS applications

1. What is SaaS? 

Together with the development of technology, SaaS (Software as a Service) has become a trend and is gradually replacing the existence of traditional SaaP (Software as a Product) due to its convenience, flexibility, fast implementation, and cost-saving benefit. 

2. How companies benefit from SaaS applications

SaaS allows businesses to access a particular service remotely through a web browser, using an internet connection. With SaaS, after implementing the application, companies just need to pay a certain amount to “hire” the service from the provider. They do not have to invest in setting up a server and other maintenance tasks afterward. Each amount of fees paid indicates a certain number of functions that can be performed. By this form of service, business owners can adjust which service plans are the most suitable for them. Hence they can cut unnecessary maintenance costs. 

With its specific benefits, SaaS is favored among big companies, as well as start-ups and entrepreneurs. By implementing SaaS, companies can spend more time increasing their revenue or improving their operating efficiency instead of focusing on handling, upgrading, and maintaining their system.

Moreover, nowadays, SaaS applications are specialized and can be applied to different departments in a company such as HR, Operations, Finance & Accounting, Sales & Marketing, Customer Service, and so on. 

Let’s take the following as an example. Shoeboxed is a SaaS company specializing in managing receipts for individuals and businesses (both small-size and big-size). (You can check out Shoeboxed here). All data on the receipts are scanned and stored in the system in both picture and data format. Users can then keep track of the payment history by exporting the file later. The receipt managing task is a big help for the accounting department in tax preparation and reimbursement procedures. Besides, since all the receipt data is well organized, it is easier for the Operations Team to consider which tasks need cutting off. It is useful for the Sales and Marketing Team to sit back and examine which marketing strategies are worth investing in.

See more: 5 Triangle SaaS Tools Keeping Small Businesses Organized.

Fintech and its growing trend 

1. Fintech definition

We believe that many of our readers have heard the word “Fintech” many times. It has even become a famous term and topic, especially among people in the IT sector. However, according to Statista, 67% of the US population said that they had not heard about Fintech, 21% have heard the word somewhere, and only 16% have clearly heard and understood its meaning. Despite those low numbers, the industry is still growing fast. So what is Fintech, and why do people talk about it?

“Fintech” is a short form of Financial Technology. According to the World Bank, it is a recently-created term that describes the new trend in the Financial and Banking area that “employs new technologies to improve or innovate financial service”, according to the World Bank. All companies that use the internet, cell phones, cloud computing technology, and other open-source software to advance the efficiency of the Banking and Investment business, can benefit from Fintech.

We can divide Fintech companies into two groups:

  • The first group is companies that focus on the end-users. Their main businesses provide digital tools that help improve the customer experience in borrowing, money managing, and start-up funding.
  • The second group is companies that play the “back office” roles in supporting other financial institutions.

So, is the e-wallet function on the mobile application of a banking institution called Fintech? Unfortunately, the answer is no. It is just an application of IT in the banking area.

However, for example, if Shoeboxed develops and applies a new data security technology to the e-wallet application of a banking institution to provide convenience and safety to the customers, yes, it is Fintech.

2. Fintech services

Fintech is now providing services in different areas such as banking technology, payment, financial management, cryptocurrency, … with diverse services including

  • Digital wallet (or e-wallet) – “a software-based system that securely stores users’ payment information and passwords for numerous payment methods and websites” (according to Investopedia). (Example: PayPal).
  • Distributed ledger technology on a blockchain platform. A distributed ledger is a database that is distributed to more than one computer or node. Each node maintains a ledger, and the ledger will be updated if there are any changes in data. A blockchain is a type of distributed ledger where every node has its own copy of the ledger. When data changes happen, it will also update all copies of the ledger. (Example: Bitcoin).
  • B2C e-commerce – online transactions between businesses and customers. 
  • mPOS – known as mPOS, a portable point of sale of a smartphone or tablet that acts as a register. This service is popular for businesses such as food trucks, convenience stores, supermarkets, etc. that allows the customers to complete payment transactions with just a touch.

Aside from the examples of Fintech products listed above, there are still a lot of services that might be a bit less popular such as:

  • Peer-to-peer lending (abbreviated as P2P lending) – a website that allows users to borrow and lend money directly. The P2P lending website helps to connect the borrowers directly to investors. In exchange for that, they control the transaction by setting the fee, interest rate, and other terms of conditions. 
  • Crowdfunding – a platform that allows start-ups to sell some of their future products to potential investors. If start-ups can fund enough money, they can start their project right away, and vice versa, if the amount of money funded is not enough, start-ups will return them to investors. 
  • Personal finance – a different branch of P2P lending that collaborates with banks to give end-users insights and advice about their bankings. 
  • Data management
  • Insurtech and so on

It is undeniable that Fintech has been encouraging a trend of entrepreneurship in Finance and Banking, the famous industries for their requirement of huge capital when joining the game. Thanks to this trend, a wide range of services are available in the market, yet the difficulties in management. 

However, if wisely used, Fintech can bring several benefits such as:

  • Improving customer satisfaction since the customers save time when completing a transaction
  • Analyzing customer behavior easier than before with reliable recorded data
  • Saving operating costs for business owners
  • Setting limits on manual inaccuracies

Following the Industrial Revolution 4.0, and now at 5.0, many traditional financial institutions are changing their ways of approaching more customers by collaborating with Fintech companies. According to PwC, 82% of traditional financial institutions plan to increase collaboration with Fintech in 3 – 5 years to avoid losing revenue.

Conclusion

With the explanation of SaaS and Fintech mentioned above, can we say Fintech is a type of SaaS? Or can we position Fintech as Saas? Well, IT DEPENDS. We say “it depends” because they have a lot of similarities in their purposes, ecosystems, applications, and so on. Therefore, it depends on the ultimate goals of the companies and how they operate their business.

As you can see, Fintech companies provide a wide range of services but mainly in the Finance area, while SaaS applications are broadly provided in different areas. Since the ever-increasing number of available services can make users unsure of what to choose, SaaS, Fintech, and other traditional business platforms should consider collaborating to introduce better and more compact services. The nuances of SaaS and Fintech can be hard to keep straight, but the value they offer to the world economy and the development of technology means they are here to stay. Therefore understanding their nuances is essential to thriving in today’s economy.