Gone are the days when one only had paper and pen with a receipt book or cash receipt journal to keep business records.
Digital technologies are increasingly replacing traditional manual processes and becoming the key to success in today’s business world. This holds true for business receipts, which used to predominantly be in physical paper form. However, they are now more commonly available in digital format.
Here are the key takeaways from this article on the pros and cons of digitizing receipts:
- Digital technologies are replacing manual processes in businesses, including the use of paper receipts.
- Digitizing business receipts has numerous benefits, such as cost and time savings, easy storage and access, tax-readiness, and increased interactivity with customers.
- Digital receipts can be organized, tracked, and customized using scanning software and apps.
- Electronic receipts have some disadvantages, including the need for technical knowledge and potential online security risks.
- Using a receipt scanning software can help businesses go paperless, increase efficiency, and better manage finances.
For any small business owner who wants to embrace scanning and receipt tracking software as an alternative to paper receipts, this article will give you immediately actionable next steps in your journey toward digitizing your receipts.
What does an electronic receipt for a small business look like?
An electronic receipt is a digital document that proves a transaction has been made between two parties. The recipient can get an electronic receipt similar to a paper receipt in transactions, returns, or disputes from the sender. Electronic receipts come in handy when claiming tax deductions or during internal revenue service tax audits as it’s simple to print a hard copy of them if needed. This is especially true if you utilize professionally designed receipt templates.
Benefits of digitizing business receipts
Similar to an ordinary document scanner, scanning software turns your paper into a digital copy, but that is not all it offers.
By digitizing your receipts, these apps help you to…
- organize your receipts
- provide you with a digital filing system in which to store receipts
- track expenses
- and even create reports
Here are additional benefits of filing receipts digitally.
Benefit 1. Cost-saving and time-saving
From a financial perspective, switching to digital receipts is undoubtedly cost-effective. Conventional physical documents require an upfront investment, ranging from paper and ink to printers and scanners—as well as storage costs in terms of a filing cabinet, etc.
Important papers—such as bank statements, receipts for business expenses, credit card statements, and more—can now be transformed into digital data and safely kept in your computer or the cloud with the support of scanning software. There are also several free and paid apps that can link to your accounting system, as well as help you customize your financial reports.
On top of that, working with digital data speeds things up for your whole team. If you are an accountant, bookkeeper, or business owner, you know that categorizing receipts, inputting data, and extracting information from them is time-consuming. Don’t waste your energy doing everything manually now that you have apps and receipt software to assist you. Let these digital tools take care of your receipts so you can spend more time on the essential tasks that will lead to increased profit for your business!
Benefit 2. Easy storage and access
Managing receipts and business expenses in an organized way for easy tracking and retrieval can be a real headache as your business transactions grow in number and scale. However, thanks to digitalization, you don’t need physical cabinets to file receipts. No more running to the office supply store because you ran out of office supplies.
See also: Business Expense Tracker Apps: 8 Money-Saving Reasons to Start Today
You can store receipts in your computer or 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.
Benefit 3. Tax-readiness
A recurring question whenever tax season draws near is: How can small business owners determine what business expenses are deductible without needing to look at each receipt? A great receipt scanning or receipt tracking app will get your receipts into action in the following ways.
Besides scanning, you can use such software to extract and categorize expenses, making filing your tax return a breeze.
A top-of-the-line receipt management app will allow you to create financial reports based on your business expense data. These financial statements can then be exported into your accounting system or accounting software. When it’s tax time, and you’re getting ready to file your tax return, you can have confidence about the accuracy of your tax return because you will have a digitized archive of receipts to use as your supporting documents.
At some point, the IRS may ask to review your receipts—and this is when scanned receipts and documents come in handy as the IRS accepts digital images of receipts.
Benefit 4. Increased interactivity with customers
Another merit of electronic receipts worth mentioning is their marketing role. You can promote your services by, for example, featuring links to your business website within the footer of your store receipts.
Based on the information collected through e-receipts, you can keep track of customers’ purchasing habits, know their preferences, and send personalized offers that match their needs.
In addition, small businesses can use the email list to gather feedback with surveys. Each receipt sent is an excellent opportunity to engage and improve your products or services.
Disadvantages of digital receipts
Are there any disadvantages to electronic receipts? Not many, but here are two things to know in advance.
1. Some technical knowledge required
Although you don’t need to be an expert to use scanning software, some technical knowledge is necessary if you want to optimize all the functions it is capable of.
2. Online security dangers
Many people are concerned that digital data leaves information vulnerable to greater security risks. Keeping receipts and financial documents online does not 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 the loss of customer data, so it is advisable to back up everything in advance.
5 ways Shoeboxed digitizes receipts and reclaims time for business owners
If digitizing receipts is something you want to explore, here’s how Shoeboxed assists small business owners with its receipt scanning and receipt management features.
1. Easy scanning with accurate data
Shoeboxed gives you multiple scanning options, so you can get business receipts digitized in whatever way best suits you. After taking photos of your receipts, you can upload them to Shoeboxed’s online dashboard or its mobile app in seconds.
At Shoeboxed, we also understand that sometimes you just want someone else to do the tedious work of scanning and organizing receipts. Shoeboxed can be your very own receipt scanning conceierge. Just stuff your many receipts into a pre-paid Magic Envelope, and mail it to our facility and we’ll do the rest.
2. Enhanced security for your digital information
Shoeboxed uses Secure Socket Layer encryption for the upload process and systematically backup your scanned data so you can rest assured that your records are protected. Also, access to the app is strictly controlled, and you get to decide who will have the right to access your digital filing system for business receipts.
3. Great compatibility with accounting software
We are partners with popular accounting software platforms, such as QuickBooks, Xero, and Evernote, which means receipts scanned to Shoeboxed can be synced onto these systems. You can also choose to auto-import receipts from your Gmail inbox into your Shoeboxed account, so you can keep track of paid bills for tax time.
With an accounting software, it can help you make important decisions when it comes to managing your finances.
4. Tax-friendly, audit-ready scans of receipts
One perk of Shoeboxed is that it offers scanned images of your receipts which are accepted by both the IRS and CRS. Most business receipts must be kept for at least three years. And by storing business receipts in an electronic system like Shoeboxed, business owners will be securing their records so they can claim all their deductibles on their tax returns.
5. Value-laden plans for small businesses
At Shoeboxed, we have business plans for individuals and businesses of any size. Starting from just $18 per month (or a Digital Only plan from $4.99 a month—available within the Shoeboxed app), you can enjoy our unlimited file storage and make the best 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 check it out! Or download our free app for a 30-day trial period of our plans.
How to scan receipts into a computer using Shoeboxed
You can scan receipts with a traditional scanner or a mobile app, the two most common receipt scanning methods.
If you’re using a receipt scanning app such as Shoeboxed, scanning receipts and uploading them to your computer is effortless.
Here’s how to scan a receipt and upload it to your computer with the Shoeboxed app step-by-step:
Step 1. Prepare your business receipts for scanning. The tip here is to flatten your receipt as best you can.
Step 2. Click to open the Shoeboxed app and select Add new to upload your receipt.
Step 3. Take a picture of the receipt with the installed photo snapshot feature or upload a receipt image from your phone’s photo album.
Step 4. If you want, you can fill in important information to the receipt (such as title, vendor, and amount), and choose a category fitting with the receipt—alternatively, you can leave that to Shoeboxed’s data verification experts (see step 5).
Step 5. The Shoeboxed team processes and verifies your data from the uploaded receipts.
Step 6. Access your Shoeboxed account on the app’s website, where you can see all your scanned receipts.
Bonus tip #1: You can easily create an expense report from scanned receipts with the Shoeboxed app on your mobile or computer.
Bonus tip #2: You can also upload PDF receipts to your computer.
See also: How to Scan Receipts With The Shoeboxed App: Your Easy Guide.
Frequently asked questions
Benefit 1. Cost-saving and time-saving
Benefit 2. Easy storage and access
Benefit 3. Tax-readiness
Benefit 4. Increased interactivity with your clientele
Receipts are crucial for business owners to keep track of because they serve as as proof in case of a tax audit. You can organize your receipts in 2 different ways, traditionally or digitally. If you prefer to organize your receipts traditionally, you can purchase a stationery organizer and then categorize them in a chronological order. On the other hand, if you subscribe to a receipt management app, the app will likely have a built-in organization system and will do much of the organizing for you.
Trying out a receipt scanning software may become the best decision you can make to go paperless at your office. It offers the convenience and flexibility you need to manage your finances better while solving problems caused by paper receipts and documents. Find out how can increase your team’s efficiency!
Shoeboxed is a receipt scanning service that supports multiple methods for receipt capture: send, scan, upload, forward, and more!
You can stuff your receipts into one of our Magic Envelopes (prepaid postage within the US). Use our receipt app (iPhone, iPad, and Android) to snap a picture while on the go. Auto-import receipts from Gmail. Or forward a receipt to your designated Shoeboxed email address.
Turn your receipts into data and deductibles with our expense reports that include IRS-accepted receipt images.
Join over 1 million businesses scanning & organizing receipts, creating expense reports, and more—with Shoeboxed.
Try Shoeboxed today!