Gone are the days when one only had paper and pen to keep information records. 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. Small business receipts used to be in physical paper form. However, they are now more commonly available in digital format.
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.
For small companies who want to embrace scanning and receipt tracking software to get rid of their paper receipts, this article will give you immediately actionable next steps in your journey toward digitizing documents.
What is digital data?
According to Techopedia, digital data is a binary format that various technologies can interpret. 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 we can see on a computer screen.
Benefits of digitizing small business receipts
Like an ordinary scanner, scanning software turns your paper into a digital copy, but that is not all it offers.
Many apps can help you to organize your receipts, track expenses, and even create reports. Here are the benefits of a scanning app for your business’s digitalization.
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—as well as storage costs.
Important papers can now be transformed to digital data safely kept in your computer or the cloud with the support of scanning software. There are also several free apps that you can try. These free apps typically have paid plans with extremely useful features, such as linking to your accounting system and customizing your financial reports.
On top of that, working with digital data speeds things up for your whole team. If you are an accountant or a bookkeeper, you should know better than anyone the time-consuming task of categorizing receipts, inputting data, and 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 that will lead to increased profit for your business!
One significant advantage of a scanning app is that you can use it 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 easy 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 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.
A recurring question whenever tax season draws near is: How do you know what expenses are deductible without sorting through each receipt? Great receipt scanning and organization software will get your receipts into action in many ways.
First, besides scanning, you can use such software to add tax information and categorize the expenses accordingly, making tax preparation a breeze. When every expense is precisely recorded, you can also tell how many tax deductions you can claim.
Moreover, many receipt scanning apps allow you to create financial reports based on your input data. These financial reports can then be exported into your accounting programs. This means you can minimize errors caused by carelessness, maintaining the accuracy of your expense reports.
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 email receipt.
Additionally, 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, business owners can use the email list to gather customers’ feedback with surveys. Each receipt sent is an excellent opportunity to engage customers and 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 not used to working with digital data may find it hard to navigate each receipt and use the software just like a normal scanner instead of fully exploiting its potential.
Ask yourself the following questions: “What am I looking for in scanning software?” “How can I use its features to my benefit?” “What skills are required to make it work?”
Many people are concerned that digital data leaves information vulnerable to greater security risks. Keeping receipts and financial documents online don’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 the loss of customer data, so it is advisable to back up everything in advance.
Shoeboxed as a solution
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.
Easy scanning with accurate data
Shoeboxed gives you multiple scanning options, so you can get receipts digitized no matter where you are. After taking photos of your receipts, you can upload them to Shoeboxed’s software or its mobile app in seconds.
Whether on a business trip or at home, Shoeboxed is 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 them back to us.
We also accept electronic images of your receipts 24/7 and our data verficiation experts help you process receipts to extract key data. Shoeboxed’s human-verified data is easily searchable and editable from the Shoeboxed’s dashboard.
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 systematically backup your scanned data so you can rest assured that your private information is protected with the 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 processing center.
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 your 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 be surprised at how the fine combination of a receipt scanning service and an accounting program will speed up your workflow and help with the financial management of your company.
Audits will no longer be a hassle if you have all the necessary documents. One perk of Shoeboxed is that it offers 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 also be a lot easier. With precise data, you can also create accurate expense reports that are tax-compliant and share them with anyone.
Economic 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 (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!
Frequently asked questions about digitizing 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 tax audits as it’s simple to print a hard copy of them if needed.
What are the top benefits of digital receipts?
Digital receipts are the perfect way to keep track of your transactions. They’re electronic, so there’s no need to carry a physical receipt. Additionally, a receipt app is easy to use, making managing your finances simple. And having easy access to a database of digital receipts makes it easy to verify payments and customer transactions.
How to scan receipts into a computer
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. A mobile app allows you to scan your receipts on the go, costing less.
Here’s how to scan a receipt and upload it to your computer with the Shoeboxed app step-by-step:
Step 1. Prepare your 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.
How to organize small business receipts
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.
How to keep receipts from fading
There are three common types of receipt paper currently on the market: carbonless paper, wood-free paper, and thermal paper. The optimal way to prevent receipts from fading is to use a non-plastic material to store your receipts, such as a receipt sleeve or a binder. And store the receipts in areas that are resistant to moisture and heat.
Bonus infographic on the benefits of digitizing your receipts
The bottom line
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 Shoeboxed can increase your team’s efficiency!
Originally published November 15, 2021. Updated on September 23, 2022.
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!