Why Small Businesses Need To Transform Paper Receipts To Digital Data

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!