Receipts are a necessary evil in business, but if you’re not using an app, you’re doing it wrong. Here are 5 reasons why.
Receipts are a part of business life. Whether you’re running a business, holding client meetings offsite or you travel for work, those little documents have probably seen the inside of your wallet or shoebox.
They’re integral to keeping track of your expenses and outgoings, of course. But paper receipts are also monuments to yesterday. They take up space, they’re environmentally unfriendly and they’re easy to lose. Worse, many small to medium businesses (SMBs) are still using them to input information manually, leading to wasted time and human error.
Like many advancements, the biggest obstacle is often fear: Will digitizing cost too much? Is it hard to do? Why change?
Every small business should be using a receipt app and accounting software, even if they’re outsourcing their accounting. Your accountant will love you for it, but there are several other real, tangible benefits for using receipt apps and accounting software. Here are five....
You know that small businesses and sole traders spend more time than they’d like filling out paperwork. But even the most seasoned entrepreneur might be shocked to know how much time they’re wasting: business owners spend an average of 120 hours a year working on financial admin - three full working weeks, in other words. That’s according to Elite Business magazine.
Paper receipts don’t just create data entry work. They take up time and head space. That $3 coffee receipt has to be remembered up until the moment the data is entered (along with any other receipts you accumulate). Until then, your receipt has to live in your wallet, waiting for you to reach your computer, at which time you have to make room in your schedule to enter the data. It’s not an exaggeration to say that the labor costs have swelled the price of that coffee from $3 to $10.
Snapping and sending that receipt immediately frees head space. It outsources the task of remembering it. And a good cash receipt app will remove much (and possibly most) of that admin while also reducing instances of human error.
The human error factor is especially relevant when you consider that over half of SMBs go out of business in their first five years due to bad admin and finance management.
Your typical small business or sole trader did not get into the business to file receipts. If you’re a florist or running a cafe, you can spend just a few minutes glancing over admin, instead of using up a whole morning or afternoon. You can use that time to get back to what you love about the business - dealing with customers and pursuing your passion projects.
Receipts are often small, and thus sometimes neglected. Was that Starbucks airport receipt so important? But they add up, especially if those receipts are for travel expenses like accommodation and fuel costs.
In the UK, a government poll found that 65% of decision makers in finance and accounting admitted to losing receipts. You might have even lost a receipt without knowing it.
Taking a picture, especially if it uploads to the cloud, instantly removes and outsources this problem.
Many small businesses, especially sole traders, travel to their clients. So if you’re a plumber who just wrote up a receipt, back it up by taking a pic and uploading it to the cloud-based AutoEntry. Now, it doesn’t matter what happened to that paper receipt.
One of the consequences of Coronavirus is businesses rethinking their costs. This especially applies to office and storage space.
When it comes to Excel sheets, for instance, you can store over 165,000 pages per gigabyte. Smartphones are approaching 200GB capacity at time of writing, and naturally, that number is higher in your laptop and greater still in the cloud.
This is especially important when it comes to receipts and tax: Many governments require businesses to maintain tax records for years. In the US, the UK and Ireland it’s six years.
Keeping that box of receipts physically suddenly looks a lot more expensive. And it cluttered (And ironically, paying for storage will generate more receipts!)
If, for instance, you run a record store, you know that every square inch is as important as every 12 inch! Say goodbye to that cardboard box or filing cabinet in your storeroom, as all that paper migrates north, to the cloud.
If you’re not working towards becoming more digital, you’re in the minority. According to Finances Online, 70% of businesses have a digital transformation strategy in place or in the pipeline.
Your digital transformation doesn’t have to be onerous or costly. It might be one simple change, like a receipt scanner.
Using a receipt app is as easy as taking and sending a picture. In many cases (including AutoEntry) the app will send the information directly to accounting software, where it is collated automatically. You can safely and confidently dispose of that paper receipt.
We recommend shredding and - if applicable - recycling.
If you’re travelling for work and spent money on fuel, take a picture and send it to AutoEntry before you leave the gas station. Among other things, you won’t be worrying about the ink eroding while that receipt sits in your wallet.
Post-covid, we’re all more aware of how much we’re handling items that have been touched by other people. Cash is making way for credit and debit cards, as we try to minimize the likelihood of contracting unwelcome viruses.
Whatever your business, fewer receipts change hands when you’re dealing with digital, whether you’re a freelance photographer sending those receipts to your accountant, or the accountant receiving them.
The best time to modernize your business was yesterday; the second best time is now. The good news is that it’s easy to get started - by taking pictures instead of manually entering data.