Automating expenses: The ultimate guide to digital receipt apps

Key takeaways

• Receipt apps are a vital first step for business owners and accountants starting the journey to digitized and automated accounts, especially crucial for UK businesses facing the requirements of Making Tax Digital (MTD).
• The core benefits of using these apps include significantly reducing the labour of manual data entry, providing more accurate records, ensuring less stressful tax seasons, and creating secure, easily managed digital files.
• The process is simple: If you can take a picture, you can use the app to capture receipts instantly, transforming paper documents into digital data ready for accounts software.‍
• The next progression after mastering receipt capture is graduating to automating other documents, like bank statements and supplier invoices to achieve full cloud-based automation.

For business owners, here’s a guide to getting started with a receipt app and why you should. For accountants and bookkeepers, we hope this post will work as a communications resource when you’re moving your clients to digital. 

Making all accounts digital can be a challenge for business owners; while bringing clients to digital is an ongoing issue for accountants. It has become especially important in the UK, where Making Tax Digital (MTD) is being rolled out. 

However, it’s not just a UK issue. Several countries are in the midst of an equivalent, compulsory digital tax initiative; and, of course, there are myriad advantages for businesses and their accountants when a company takes the plunge to digital, automation and the cloud. 

Receipts are one of the last bastions of paper-based business we have. While bank statements, invoices and even contracts go electronic, paper receipts are still stubbornly ubiquitous. 

More importantly, scanning receipts is a common first step in the journey to digitising accounts. And, as Chinese philosopher Laozi said, a journey of a thousand miles begins with a single step.

Getting Started with a Receipt App 

If you’re a business owner who doesn’t know where to start, we’d suggest talking to your accountant about their preferred app, and heading to your app store of choice (whether that’s the App Store or Google Play Store, for instance).

In the case of AutoEntry, download the app and name or “create” your company within it and upload documents. (There are walk through videos and step by step guides in our help section.) As one of our customers has said, if you can take and send a selfie, you can use AutoEntry.  

Some data automation tools (including ours) have functions beyond receipt capture, but receipt capture is a good place to start if you want to get a feel for the technology. Also, once you’ve created an account, it gets easier to use additional functionality. Every step forward makes the next step easier.

Why digital receipts are essential for Making Tax Digital (MTD)

The UK's Making Tax Digital (MTD) initiative requires businesses to keep digital records and use MTD-compatible software to submit VAT returns. While paper receipts are still generated, MTD necessitates converting them into a digital receipt record as soon as possible, ensuring the data is stored securely and accurately.

A compliant receipt app doesn't just scan a receipt; it uses Optical Character Recognition (OCR) technology to extract the specific transaction details—supplier name, date, VAT amount, and total—and transforms them into structured, usable data. This is what HMRC requires: the ability to trace the transaction digitally from the original source right through to the final MTD submission.

AutoEntry is designed to capture this data and seamlessly push it into your MTD-compatible accounting software (like Xero, QuickBooks, and Sage), ensuring your clients are not just digital, but also fully compliant.

Key advantages of using a digital receipt app

Embracing new technologies should not be seen as an obligation. They’re an opportunity. Just as it would be hard to imagine life without email now, once you start using cloud-based automation tools, it will be unappealing to return to manual data entry. 

Here are the advantages of receipt apps and automation tools...

Eliminate manual data entry and save hours every week

The most obvious and appealing advantage of receipt apps and data automation is the time-saving: instead of hoarding receipts and then manually entering their data at a later date, you just snap, upload to your accountant or accounts software, and then forget about it. 

Depending on how many receipts you deal with, this could save hours per week of data entry. Plus the time saved of organising, finding and storing these paper receipts.

Reduce tax season stress with MTD-ready records

A beautiful thing about automation is that it helps you do jobs incrementally: so, for example, instead of collating everything at the last minute, you’re filing every receipt as soon as you get it. By the time tax season rolls around, you’ve already done much (possibly all) of your data entry and filing.

Improve accuracy with intelligent OCR automation

Automated data entry is typically more accurate than when a human does it. This is especially the case with strong AI that can learn patterns (like document formats and fonts) and become more efficient the more you use it. 

Enhanced security and easier file management

Contrary to popular belief, digital files tend to be more secure than their analogue equivalents. Data entry software is encrypted and laptops and files are (or should be) password protected. 

It’s also easier to find what you’re looking for with digital files, thanks to search functionality and adaptable sorting (whether by chronology, alphabetical or by another category).  

Less paper, less clutter, better office efficiency

Reducing the volume of paper in your life benefits everyone: your workspace is less cluttered, you have more storage space and it’s good for the environment. Also, if you’re a small business, your accountant will not miss those boxes of receipts being dropped off to their office!

Moving beyond digital receipt capture

Once a business owner has mastered receipt capture and become accustomed to that aspect of data entry, they should progress to other software as a service (SaaS) offerings. This might include automating and digitising bank statements and invoices.

You can instruct vendors and financial institutions to send documents directly to your accounts software, and even encourage them to use the duplicate accounts software, expediting the process even further. Whether you’re a business owner, an accountant, or a bookkeeper, AutoEntry makes life easier in a myriad of ways. Find out how with a free trial.

Frequently Asked Questions (FAQ)

1. How does a digital receipt help with Making Tax Digital (MTD) in the UK?

A digital receipt app captures, extracts, and stores data in a digital format, which is required for MTD. It ensures you have a secure, machine-readable audit trail that can be automatically pushed to MTD-compliant accounting software.

2. What is the difference between a photo of a receipt and a valid digital receipt?

A photo is an image file. A true digital receipt is a machine-readable document (like an e-receipt or one processed via OCR) where the line-item data (supplier, date, VAT, total) has been extracted and stored as structured data.

3. What is the best digital receipt app for small businesses in the UK?

The best digital receipt app for a UK small business is one that offers high OCR accuracy, unlimited receipt uploads, multi-currency support, and seamless, instant integration with your preferred accounting software like Xero or QuickBooks.

4.. Can I use a digital receipt for an expense claim?

Yes, in the UK, a digital record of an expense, such as one captured by a digital receipt app and stored securely, is generally acceptable to HMRC for tax purposes, provided it is clear and contains all required transaction details.