Looking to capitalize on the growth of telemedicine? Our article on Doctor on Demand app development insights has got you covered.
Receipt Tracking Software: Secret to Easy Bookkeeping
Is tax season a nightmare for you? Do you feel exhausted every time you must go through the mountains of receipts to claim tax deductions or reimburse eligible payments? After all, it is easy to misplace one or a few receipts and then struggle for hours to complete that expense report.
With the right receipt tracking software, this wouldn’t be a problem. It provides you with a digital space to consolidate the documents and access them anywhere. After all, taxes and bookkeeping, according to 40% of small business owners, are the most difficult aspects of running their company. Let’s make it easier with the right receipt management software.
What Is Receipt Tracking?
Receipt tracking is the practice of keeping track of your spending by organizing and filing your receipts. Receipt monitoring enables business owners to monitor their spending. It also aids in monitoring your company’s overall sales. Tracking receipts helps keep tabs on the business expenses and bills.
Types of Receipts Businesses Need to Handle
Bookkeeping can be a pain. However, when you struggle with them, keep in mind what the IRS (Internal Revenue Service) said: Good record-keeping is essential for any business. It helps you monitor progress, prepare financial statements, and keep track of income, expenses, and taxes.
But what are the types of receipts you need to keep track of? Here is a list of receipts that definitely need to be kept: inventory receipts, assets receipts, and other expense receipts.
- Inventory Receipts: It’s important to keep documents that identify the payee, the amount, and the payment proof for the items purchased.
- Asset Receipts: Assets are generally things that businesses keep and utilize from year to year, such as furniture, computers, vehicles, or machinery, and it’s recommended to keep records of any kind where money is spent on assets, including upgrades and sales
- Other Receipts: Businesses should keep receipts or invoices as proof of purchase, especially for expenses that will be written off on taxes, such as advertising, car and truck expenses, education expenses, entertainment, networking, office supplies, and professional services/contractors.
In many cases, the receipts need to be kept for up to 3 to 6 years for tax audits. Since there are a lot of paper receipts to keep and organize, it would be best to use receipt scanners and store them digitally.
Reasons You Need to Track Your Receipts
Receipts are crucial to every business’s smooth operation. In detail, they help you achieve the following:
Easy Management and Expense Tracking
Receipts play a prominent role in any business. It helps with expense tracking and gives companies a bird’s eye view of where the business money goes, thus revealing a bigger picture of the business’ performance.
As aware as one might be of the receipts’ prominent role, it is a challenge to manage and track them. Time spent manually handling receipts can eat up a massive chunk of time each day, and the process is also extremely error-prone.
Having a suitable receipt tracking app takes off a lot of administrative burden. Most apps not only provide easy storage for the receipts and help with expense management receipt scanning, but they also allow you to categorize the receipts for convenient future tracking.
Tax Audit Preparation
“For every minute spent organizing, an hour is earned.” (Anonymous)
This quote rings true in most situations in life, especially when it comes to tax exemptions and tax audits. The tax season doesn’t need to be a nightmare for the whole team every year. Gone are the days of wondering where that one specific receipt has gone or scrambling for a few days in frustration to figure out why the numbers don’t add up.
Receipt tracking apps allow you to easily store receipts, categorize them, and pull them out whenever needed. It only takes a few seconds to generate expense reports as well as other kinds of specific reports since the data has been organized beforehand.
One of the biggest benefits of receipt-tracking apps is their integration with accounting software, giving you a high-level view of business spending, transactions, and incurred costs.
Whether it is expense management software, accounting software, or ERP, the purpose of technology is to automate the tedious processes in a business operation, minimize mistakes, and boost business efficiency.
Having receipt tracking software in hand speeds up several administrative processes, including expense approvals or employee reimbursement.
Finding The Right Receipt Tracking Software
Every organization has unique requirements when tracking business expenses. You always hire a team of professionals to build custom bookkeeping software tailored to your exact needs. However, if you are more interested in commercially available software, there are a few functions you should be on the lookout for.
Mobile App for Employees
Every receipt tracking software comes with a receipt scanning app that is available both on iOS and Android. Receipt scanning apps scan and attach receipts photos to the expense report. This expense report is sent directly to the accountant or manager for approval. Employees can keep track of their reimbursement process via the application.
Optical Character Recognition (OCR)
Optical Character Recognition (OCR), also known as text recognition, is a type of OCR software that extracts and rewrites information from scanned documents and camera images, as well as image-only PDFs. In an OCR program, letters on an image are identified, put into words, and then put into sentences, allowing the original content to be accessed and edited. This feature makes submitting expense reports quick and easy.
Simple Data Categorization
Digitizing your company’s receipts provides the ability to dig deep into receipt data. A receipt scanner helps you capture every transaction and ensures you categorize it immediately. This feature also makes it easier to create budgets and track expenses efficiently.
Support For Multiple Accounts
Most small businesses have several bank accounts. The receipt tracking process for one account is already a large workload; imagine repeating the process 3 or 4 more times. Therefore, look for software that gives users the option to attach the receipt to a specific account. A dashboard with an overview of receipt data for different accounts is a useful feature to have, too.
Regular Updates and Reviews
Check the software’s track record for customer service and the frequency of its updates. Frequent updates show that the developers are actively fixing bugs and enhancing the software.
Best Receipt Management Apps and Software
We would like to recommend five receipt management applications and software. Each of them has its advantages and disadvantages, and depending on the needs of your team, you may find the right one for you. However, if you think your business needs are unique and require custom software, you may want to consider outsourcing a team of developers, especially if you don’t have an in-house team yet.
Pricing plan: With Zoho, you can get started for free.
- Scan receipts automatically
- Auto-forward receipts from the inbox
- Attach receipts from the cloud
- Add receipts in bulk
- Easy to use
- Feature-rich solution
- Support is available only five days a week
- Limited automatic scanning
Pricing plan: The price starts at $30 per month.
- Automatic scanning.
- Connected to other Intuit software
- Suitable for all business sizes
- Robust software meets every accounting need
- Integrates with a lot of different software
- Not beginner-friendly
- Need accounting knowledge
Pricing plan: You can start for free with Expensify.
- Cloud-based storage
- Seamless integrations
- Filters and analytics
- Robust security
- Many free features
- Beginner friendly
- Not suitable for large enterprises
- Limited receipt scans
Pricing plan: Starts at $18 per month
- Auto-import receipts from Gmail to Shoeboxed
- Unlimited cloud storage
- Automatic categorizing
- Beautiful and friendly user interfaces
- Limited Magic Envelope features
Pricing plan: You can start using Wave Accounting for free.
- Optical character recognition for scanning receipts
- Sales tax for bills, estimates, and invoices
- Customer profiles are simple to set up and use to monitor the status of invoices
- Free accounting, invoicing, and bill tracking
- Easy to configure, record, and manage unpaid bills
- Generate various types of accounting reports
- Limited customer support
- Not suitable for large businesses
Receipt App Alternatives
If you are still pondering whether receipt-capturing technology is for you, you can start with other ways of digitizing your paper receipts.
The first way is to take photos of your receipts using your mobile phone camera and store them in a digital filing system like Dropbox.
Another option is to use Google Drive to store your receipts. Create a new folder labeled “Receipts,” select “Scan,” take a picture of the receipt, and upload it to your Google Drive folder. This may be a simpler alternative to a receipt management app for some business owners.
Lastly, you can switch to paperless receipts wherever possible by using a credit card reader that works with your smartphone or tablet to minimize customer receipts and either text or email receipts to customers. This can help reduce paper waste and streamline your receipt management process.
Topics: Mobile App Development
This is how you create a dating app guide that has the right matching algorithm, monetization strategy, features, and more.
Unlock the potential of stock app development as a side hustle. Learn how to get started with our guide!
Discover the intersection of technology and finance through financial software development. Learn about the top use cases and benefits of fintech in this informative article.
Telehealth app development has revolutionized healthcare by making it more accessible and cost-effective than ever before.