We’ve spoken on previous blogs about the power of digital record-keeping. In this short blog we are going to look at one of the key tools available – Receipt apps!
What are Receipt Apps?
Receipt apps are often referred to as ‘OCR’ (optical character recognition) after the technology a lot of these products use. Receipt capture technology is an app for your phone that allows you to snap a picture of a receipt.
The app then sends the picture to the cloud, where all of the data extracted from it. This means it reads items such as dates, amounts and names.
The software will usually have a guess at the type of expenditure. For example, if you’ve snapped a Costa receipt it may guess it is ‘subsistence’. You (or your book-keeper) then log in, review the receipts and tell/confirm with the software what the receipt was for. The software will learn your responses for future. The app can then transmit this to any book-keeping software you may have, or is available to download in a spreadsheet.
How does it save me time?
The software automatically reads the data in the receipt, so it saves a significant amount of time. Especially when compared to entering all your data to your records manually.
Once you get used to the technology, you can also set the software to not ask you to review certain receipts (let’s say you always just buy timber from the timber merchant) and those receipts will automatically be sent to your book-keeping software.
The technology is getting even better by the day. One platform recently added the ability to ‘fetch’ receipts directly from certain suppliers, so you don’t even have to log in and download receipts.
For example, you can have it connect to your O2 account and ‘fetch’ your monthly invoice. Each month when available it will grab it and stick it straight into the software for you. Adding a layer to this, if it is always telephone expenditure, you can set the software up for you to not even review the picture and transmit it straight to your book-keeping software.
If you are using a book-keeper or accountant, it is likely all you will need to do is snap pictures – they will sort the rest!
What apps should I use?
You can see these apps in action here:
Do I need to keep paper receipts?
The answer is yes and no. You need records to be available in case of a HM Revenue & Customs inspection. You may also need them for employment law, civil disputes, health and safety etc.
There is also the chance you took a really poor picture on your app and will need to retake it!
Our general advice is – keep them. Whilst companies like Receipt Bank, Auto Entry, Xero and QuickBooks are unlikely to falter, it is worth being prepared for any scenario.
If you are using receipt capture to store your information digitally, then we would suggest a simple ‘tub’ to just throw your actual paper receipts into, just in case of a (very unlikely) scenario where you may need to refer to them.
The underrated benefit of this technology
This technology with save you tax. We can’t pretend to estimate the amount of tax relief lost due to lost receipts, but it would be vast. If you imagine you bought fuel or similar with cash and then lost your receipt, the expenditure is gone from your records along with the tax deduction. Capturing receipts there and then will save you tax.
How can I work with a book-keeper / accountant on this?
Have a chat to your accountant or book-keeper to see if they recommend receipt apps. You (and they) can save significant time with these apps, so forward thinking firms will be excited to help you move into using this technology.
If you don’t have a book-keeper or accountant, or your current one doesn’t seem keen to use it(!), please get in touch with the team for a chat – we’d love to help.