Why Should Use Receipt-Tracking Software?
Over the course of a year, your small business will make many purchases – for new computers, phones, office supplies, business travel and more. Documentation for each transaction matters for several financial and tax reasons, among other things.
Careful organization of your receipts makes your life as a business owner much simpler. Through the use of receipt-tracking software, you can quantify how much each transaction cost, as well as any expenses that your employees may have incurred while on the job as well. This type of software can also make reimbursing those employee costs easier.
One of the chief financial benefits of using a receipt-tracking app is its ability to integrate with your accounting software. Such integration simplifies transaction itemization and helps you get a high-level view of where your business’s costs lie.
“The primary purpose of a receipt-tracking software is to streamline budgeting and ease the burden of financial responsibility,” said Yaniv Masjedi, chief marketing officer at Nextiva, said. “An intuitive and straightforward design is vital in making things easier for every professional handling money.”
Key takeaway: Using receipt-tracking software automates some of the more tedious aspects of document organization, like calculating and categorizing expenses. It can also simplify reimbursing employees for eligible expenses that they may have incurred while on the job.
Editor’s note: Looking for the right accounting software solution for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.
What features should you look for in receipt-tracking software?
When choosing a receipt-tracking solution for your company, there are multiple things to consider. As with most of today’s software products, features are paramount. However, what you value in a receipt-tracking solution may differ from other business owners’ needs.
For Gian Moore, owner and editor of MellowPine, features that automate the receipt-tracking process are key.
“Receipt-tracking software should be able to organize, name, and arrange the files quickly and efficiently,” said Moore. “After you scan thousands of receipts, you often get confused whether you did scan it or not.”
Here are some of the things that many receipt-tracking solutions offer:
Mobile apps. Every receipt-tracking service we examined came with an app that employees could use to scan receipts. Available for both Android and iOS operating systems, these apps use the camera to scan a receipt and attach the corresponding photo to an expense report. Once generated, each mobile expense report goes directly to a manager or accountant for approval, which they can do on their own app. Employees can then keep track of their expense reports to see if they were approved and when to expect their reimbursement.
Optical character recognition (OCR). Many receipt-tracking apps have OCR technology that pulls the data from the scanned receipt and automatically inputs it into an expense report. This makes it easy and quick to create and submit expense reports.
Simple data categorization. One of the biggest benefits to going almost or completely digital with your company’s receipts is the ability to dig deep into the receipt data. By using a receipt-scanning app, you can easily link receipts, invoices, and expense data to certain accounts, projects, or categories.
Easy storage. Prior to receipt-tracking software, businesses had to physically store documentation onsite, either in a box somewhere or a filing cabinet already stuffed with paper receipts. Such methods took space, and over time, some inks fade. By digitally saving each receipt, you no longer have to store your receipts or worry about deciphering a faded receipt.
Supports multiple accounts. It’s not unheard of for a small business to have multiple bank accounts. Over time, sorting receipts for each of those accounts can become unwieldy. Most receipt-tracking software has a built-in dashboard that allows you to select the account you want to attach the receipt to. These dashboards also make it easy to access all receipt-associated data for each account.
Compatible with a range of devices. You’re going to want a receipt-tracking app that’s compatible with the devices you use. Desktop computers are a natural choice, but newer software works on your mobile device through a mobile app that you can download from either the Android or iOS app store. These apps make it simple to scan receipt scans – all you have to do is take a photo of it. The apps also simplify creating and submitting expense reports.
Key takeaway: When comparing receipt-tracking solutions, features to look for include a mobile app for employees, OCR, easy data organization and multiaccount support.