Best Ways to Store Your Receipts and Keep Them Organized

Are you frustrated with the piles of receipts taking up your desk space? Have you ever felt stressed when you couldn’t find an important receipt? Or have you ever lost money just because you threw away your past receipts? It doesn’t have to be like this!

This article will share the best ways to store your receipts effectively, so you’ll never have to worry about them! 

Why should you store and organize your receipts?  

Do I really need to store my receipts? 

This question has probably popped up in your mind many times. You may think once a transaction is successful, there’s no reason to hang on to its receipt.  

But, the answer is yes! Here are the top three reasons why you should store your receipts and keep them organized: 

  1. To get ready for the tax season 

As a business owner, it’s in your best interest to lower your taxable income and increase your potential for a tax refund. The good news is most of your business expenses qualify as deductions with the IRS. However, the IRS will want to see receipts and other related documents to verify that your declared expenses were truly spent for business purposes. That means no receipt, no tax refund! 

See also: Understanding the IRS’s Tax Underpayment Penalty and How to Avoid It.

  1. To reimburse expenses correctly 

Often your employees have to use their own money to pay for something on behalf of your company. They then fill in an expense report to get reimbursement. How can you verify if their claims are genuine or not? Receipts can help you! They let you know exactly when and where the transaction took place. Most importantly, receipts tell you the exact amount you need to compensate. This prevents fraud and unwanted disputes in your workplace. 

  1. To stay on top of your spending 

Sticking to your budget is not an easy job. One effective way to do so is to accurately maintain records of every transaction. By doing this, you can have a clear vision of how much you have spent, what to cut out, and which expenses were not worth the money. Consequently, your overall cost and cash flow management will also become more efficient. 

Receipts are indispensable items to ensure your recordings are correct. They are solid supporting evidence for every bookkeeping entry, providing error-free financial reports and helping you stay in control of your expenses. 

See also: How To Track Business Expenses 15 Best Tips & Tools.

How do you store receipts? 

Now that you understand the importance of keeping your receipts, we will show you the best ways to store them. 

There are two common approaches to storing your receipts: traditional and digital. We will go through each method in detail, and hopefully, you will find the solution you are looking for! Let’s go! 

Storing your receipts traditionally 

Traditionally here means you want to collect and organize the paper copies of your original receipts. Here is what you may want to do: 

  1. Buy stationery organizers 

Buying stationery organizers to store your receipts is never a bad investment. File folders, storage cabinets, tab dividers, binders, sheet protectors, colored pens, etc., are all great tools to keep your paper receipts organized. 

A binder is the most suitable choice if you don’t have many receipts. Place sheet protectors in the binder, then slide the receipts into the protectors. If you have a lot of receipts to keep, get storage cabinets.

  1. Categorize your receipts 

Create a system to sort different kinds of receipts. It’s best to categorize based on the type of expense. For example, keep your utility receipts in one separate folder and office supplies in another. Inside your utility receipts folder, you can create subfolders like gas, electricity, water, etc. 

This will save you lots of time when filing taxes because your tax form breaks down the expenses section into different sub-categories, too. 

Consider adding numerical or colored codes to each receipt to classify expenses (e.g., using a prefix of 111 or using the color red to signify utility expenses). Placing the receipts in chronological order is also highly recommended! All these extra steps can quicken your process of categorizing and finding receipts.  

  1. Avoid piling up your receipts  

Schedule a convenient, regular time to sort your receipts. If you usually accumulate a large number of receipts every month, you may want to spend some time every Friday afternoon to go through your receipts. If you have a small volume of receipts, you can wait until the end of each month. 

Regardless, don’t put the task off and let your receipts pile up!

Storing your receipts digitally  

If you want to leverage technology to store your receipts, Shoeboxed is your best option. Shoeboxed stores your receipts and saves you valuable time. 

Just scan your paper receipts, and the Shoeboxed app will automatically extract all of the important data and categorize them. A team of data experts will verify your extracted data and make immediate corrections if there is an error. Your newly categorized receipt data is then available to check and search anytime, anywhere you want.  

Super easy, right? Quick, secure, and accurate; Shoeboxed definitely changes the game in how businesses store receipts. 

Final thoughts 

Storing receipts and keeping them organized is essential for business expense management. Whether you choose to use traditional or digital methods, make sure you always keep tabs on your receipts. 

And if you want to go digital and save time and hassle, click HERE to save 25% off all Shoeboxed plans for a limited time! 

Is Double-Entry Accounting Right for Your Business? Your Complete Guide!

If you’re a freelancer, sole entrepreneur, or independent contractor, you have to decide your business’s accounting system: double-entry or single-entry? You might have been using single-entry accounting, especially if you aren’t using accounting software. While this may have been sufficient initially, you should probably move to use accounting software and double-entry accounting if you plan to grow your business. 

In this article, we’ll walk you through double-entry accounting as simply as possible. We’ll explain how it differs from single-entry, and help you decide which accounting system suits your business best.

What is double-entry accounting?

Double-entry accounting is a bookkeeping method that maintains the balance of a company’s accounts. This method shows the most accurate picture of the company’s finances. At its core, this method relies on the accounting equation Assets = Liabilities + Equity. 

This accounting system was invented by Benedetto Cotrugli, an Italian merchant, in 1458. This system was later shared by the Italian mathematician and Franciscan friar Luca Pacioli, the author of The Collected Knowledge of Arithmetic, Geometry, Proportion, and Proportionality, which included a detailed description of the double-entry accounting system.

Using double-entry accounting is the only way to make sure all of your transactions follow the accounting equation rules. Unlike single-entry accounting which only requires that you post a transaction into a ledger, double-entry tracks both sides (debit and credit) of each transaction you enter. Using the double-entry accounting system reduces errors and makes it easier to produce accurate financial statements. Later in the article, we will take a look at a real-world example to help make these concepts even more clear.

See more: A Small Business Guide To General Ledgers.

Types of accounts

When you employ double-entry accounting, you will need to use several types of accounts. Some key account types include:

  • Assets: Assets are resources owned by a company, which represent future economic value. Some examples of asset accounts are accounts receivable, cash, and equipment. 
  • Liabilities: Liabilities are amounts owed or committed by a company, such as accounts payable, loans, and accrued expenses. 
  • Equity: Equity is the amount of funds invested in a business by its owners plus all retained income from operations. Common examples of equity are paid-in equity (funds from investors), retained earnings, and common stock. 
  • Revenue: Revenue is the money generated from any operating activities, like product sales, service fees, and interest income. 
  • Expenses: Expenses are all costs incurred in running a business, such as inventory purchases, employee wages, and depreciation. 

What are debits and credits?

Debits and credits are fundamental to the double-entry system. In accounting, a debit entry appears on the left side of an account ledger, while a credit entry appears on the right side. A transaction’s total debits and credits must be equal to be in balance. Credits don’t necessarily imply increasing, and debits don’t always imply decreasing. 

A debit may increase one account while decreasing another. For example, a debit increases asset accounts but decreases liability and equity accounts, supporting the general accounting equation of Assets = Liabilities + Equity. 

Debits increase the balances in expense and loss accounts on the income statement, while credits decrease their balances. Debits decrease revenue and gain account balances, while credits increase their balances.

To make things a bit easier, we’ve made this table to show you how debits and credits work under the double-entry bookkeeping system:

DebitsCredits
– Are always recorded on the left side
– Increase an asset account, or decrease a liability account or equity account (such as owner’s equity).
– Increase an expense account.
– Decrease revenue
– Are always recorded on the right side
– Increase a liability or equity account, or decrease an asset account.
– Decrease an expense account.
– Increase revenue

How double-entry accounting works

Setting up and operating a double-entry accounting system includes four key steps. It starts with setting up the accounts in which bookkeepers will record transactions and ends with using account information to generate financial statements. The steps are: 

  • Stage 1: Create a chart of accounts for posting your financial transactions. This chart is a complete listing of all the general ledger accounts that a company can use to record transactions. It contains all the accounts for each of the five types: assets, liabilities, equity, revenue, and expense. Nowadays, most accounting software comes with pre-made charts of accounts available for customization, while other accounting solutions offer customized charts of accounts.
  • Stage 2: Enter all transactions with equal amounts of debits and credits to reflect the elements of a transaction. Debits and credits can be recorded in any monetary unit, but the currency should be consistent throughout the accounting process.
  • Stage 3: Ensure each entry has two components; debit and credit. And, ensure that they are in balance with the accounting equation. Using accounting software can help you with this. 
  • Stage 4: Check and ensure that financial statements balance and reflect the accounting equation. The net account totals in the double-entry accounting system are fundamental to creating the company’s working and final balance when closing the books at the end of each accounting period. The final adjusted balances flow into financial statement line items. Nowadays, accounting software can automate the integration and process flow necessary to do this.

An example of double-entry accounting

Let’s explore a realistic example of double-entry accounting for a common business transaction. If you buy a new $1000 laptop for your freelance startup and you would like to record the expense, here’s how you’d do it: 

First, you need to enter a $1,000 debit to increase your asset statement “Laptop” expense account and a $1,000 credit to decrease your balance sheet “Cash” account. 

DATEACCOUNTDEBITCREDIT
12/29/21Office equipment$1,000
12/29/21Cash Account$1,000

In double-entry accounting, you still record the $1,000 in your cash account, but you also record that $1,000 as an expense.

Should I use double-entry or single-entry accounting? 

Single-entry might be enough for your accounting needs if your business is very simple, has only one employee, doesn’t have any inventory or debts, and doesn’t have many accounts to keep track of. 

Otherwise, if your business is any more complex than that, most accountants will strongly recommend switching to double-entry accounting.

Why? Though single-entry accounting is simpler to implement, it has significant drawbacks compared with double-entry accounting. Single-entry accounting is more prone to errors, especially omissions and duplications, because it lacks the control method of balancing accounts.

Furthermore, single-entry accounting can’t create a complete financial picture of the business. It only records cash inflows and outflows, indicating when cash is in hand versus when it is actually earned. It also doesn’t indicate items like sales made on credit. Moreover, single-entry accounting requires extra work in the closing process to yield balanced financial statements. Lastly, single-entry accounting is unsuitable for public companies because it’s not accepted under GAAP (Generally Accepted Accounting Principles.)

Double-entry accounting provides you with a more complete, three-dimensional view of your finances than the single-entry method ever could. Since you’re recording where your money is coming from and where it’s going, you can then collate that information into financial statements. This gives you comprehensive insights into the profitability and health of various parts of your business. That’s a win because accurate financial statements can help you make better decisions about spending money in the future.

Double-entry accounting also reduces the risk of bookkeeping errors, improves financial transparency, and provides a layer of accountability to your business that single-entry accounting cannot.

If you want your business to be taken seriously by investors, banks, and potential buyers, you should be using double-entry.

The bottom line

Accounting entries are the foundation of every company’s accounting system. Taking good care of those documents means better control over your expenses. 

Shoeboxed can help you with that! Shoeboxed is a receipt scanning and expense management solution that helps businesses digitize piles of paper receipts in just a few clicks. After scanning your receipts, the app will automatically extract the key data and categorize them in proper order. You can then create clear and comprehensive expense reports, export, share or print all of the information you need for easy tax preparation or reimbursement. 

What’s more, Shoeboxed ensures that all your digitized receipts are human-verified and accepted by both the Internal Revenue Service and the Canada Revenue Service in the event of an audit. 
Using Shoeboxed saves you time and hustle collecting and keeping those paper receipts for report-making, especially when it comes to tax preparation. Sign up for free and go paperless with Shoeboxed!

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!