Receipts are documents that businesses receive in exchange for the payments they make to a third party. Usually, businesses receive receipts for smaller payments or day-to-day expenses. For example, a business will get a receipt for stationery purchases from a local shop.
These receipts may come in different sizes. For example, a receipt printed using a card swipe machine may be much smaller in size than receipts printed using a printer.
There are many reasons why businesses will need to organize their receipts. First of all, businesses may need to use these receipts for authorization or examination in the future within the business.
Furthermore, they may need to produce these receipts for taxation purposes. Similarly, businesses will need to show these receipts to their auditors. Apart from these, there are many other reasons as well, that indicate why keeping and organizing receipts are crucial.
When it comes to organizing receipts digitally, there are a few steps that businesses must follow. These steps are listed below.
Scanning receipts
The first step in organizing receipts digitally is to scan these receipts. There are many ways to scan receipts. Larger businesses scan receipts using dedicated scanners.
These scanners will allow the business to easily integrate the scanned receipts with the accounting system the business. This can also improve the record-keeping process of a business.
Another way to scan receipts is by using applications on smartphones. These applications may not give an accurate scan of documents compared to dedicated scanners.
However, these applications are generally free and can be a better alternative for smaller businesses or startups as compared to bigger businesses.
Transferring scanned documents from smartphones may also require some additional work due to the transfer of data from smartphones to the accounting system of a business.
Storing them in the system
Once businesses scan different receipts, they will need to enter them into the storage systems of those businesses. As mentioned above, entering them into the storage system of the business will depend on the scanning process of these receipts.
Depending on the storage system of the business, it will need to convert the scanned receipts from one format to another to fit the requirements of the storage system. The effectiveness of this step is highly reliant on the scanning process of the receipts.
During the process of entering the receipts into its storage system, a business will need to ensure that these receipts are uniquely identifiable.
Usually, businesses code these receipts sequentially. For bigger businesses, giving receipts a unique identifier may include complex coding systems according to the accounting system of the business. Uniquely identifiable receipts are easily traceable in the future and linked to different transactions at the same time.
Similarly, during this process, businesses will also need to check the scanned receipts manually for any inaccuracies. For example, in some instances, scanned receipts may be blurred out or cut, which may make them useless for later use.
Larger businesses will have automatic character recognition systems to automatically pick information from these receipts and enter them into the accounting system of the business. Therefore, ensuring the accuracy of the scan is vital for the process.
The storage system of a business will depend on its size. Smaller businesses can store these receipts locally or by using free cloud solutions such as Google Drive or Dropbox.
Usually, this is because smaller businesses will not have a high number of transactions and, therefore, won’t need any special storage systems. On the other hand, larger businesses will have dedicated storage facilities connected to the accounting system of the business.
Categorizing receipts
Once a business enters the receipts into its storage system, it will need to categorize those receipts. Categorizing receipts is important for further organization.
It allows businesses to classify receipts and makes tracking these receipts easier in the future. Similarly, categorizing receipts can help businesses group together similar receipts, thus, allowing for better control and authorization process within the business.
There are no set categories in which receipts will need to be classified. Classification of receipts depends on the requirements of the business.
Businesses can categorize receipts based on the vendor, type of receipt, or the amount of the receipt. Smaller businesses may need to categorize receipts manually. On the other hand, for larger businesses, the process may be automated.
Making backups
While making backups is not an essential part of the digital organization of receipts, businesses may find it very beneficial to make backups every once in a while.
This is because even though businesses mitigate the risks associated with paper-based receipts organization, they can still not eradicate the risks associated with the digitization of the process.
Smaller businesses will need to manually back up any data while for larger businesses, this process is automatically taken care of by the accounting system.
Conclusion
Businesses receive receipts for different payments they make to vendors. Businesses must organize these receipts for many reasons. Businesses can also use a digital organization process.
To organize receipts digitally businesses need to scan those receipts and store them in the system.
Once businesses store them, they will need to categorize the receipts. Businesses must also ensure to keep regular backups for emergencies.
