- Modern receipt-tracking apps help businesses track and calculate a wide range of expenses.
- From desktop computer software to apps designed for your mobile phone, receipt-tracking software digitizes documentation, and ensures simple reimbursement and taxation.
- Though apps do most of the work, businesses should establish best practices to ensure paperwork is kept organized.
- This article is for any small business owner looking to streamline their receipt-tracking efforts using specialized software.
A recurring piece of documentation you're likely to deal with as a small business owner are receipts and expense reports. Their importance to not just your balance sheet, but other responsibilities like annual taxes, makes the need for a quick and efficient way to document your receipts a must have for any business venture. To help you determine the best solution for you and your business, we examined what makes a good receipt-tracking app and asked business owners which one they preferred.
Why should you 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.
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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.
Which receipt-tracking apps do small business owners prefer?
When looking into receipt-tracking software solutions, we wanted to find the one that most people felt was the "best." There are many options to choose from, ranging from free apps with limited features to solutions with advanced features that require a monthly subscription.
Here are the top three solutions that small business owners told us about.
1. Expensify is a popular all-in-one solution.
While speaking with small business owners, the one name that most consistently popped up was Expensify.
"Expensify does a great job of pre-organizing receipts, but you can organize them to your liking in the app as well," said Tawnya Schultz, financial freedom coach at The Money Life Coach. "It does a lot of the heavy lifting for me, and it's super simple and quick to use so I'm not up for days doing expense reports or taxes."
The service starts at $4.99 per month for individuals and $5 per user, per month for business plans. Business plans come with high-powered features like automatic expense reporting and company credit card monitoring. Most of the professionals we polled considered it a worthwhile investment because of how automated it is.
"Manual entry is a thing of the past for users of Expensify because of the software's SmartScan technology that automatically scans, inputs and tracks business expenses," Masjedi said. "However, its unique selling proposition is that it can automate any possible expense tracking as long as it's within the software's current capabilities, including an estimated mileage usage for your vehicle using the wonders of GPS."
2. Rydoo is an inexpensive cloud-based option.
"Rydoo is the best receipt-tracking tool because it is cloud-based, inexpensive, feature-rich, has OCR scanning capabilities, and allows enterprises to limit access according to employees' roles and responsibilities," he said.
Plans are billed annually and start at $7 per user, per month for the Team plan, which covers up to 50 active users, and $9 per user, per month for the Growth Plan, which covers more than 50 active users. Both plans come with OCR scanning, mileage expense reporting, and approval flow, while the latter plan includes features like expanded expense policy rules and per diems.
3. AutoEntry simplifies receipt scanning and organization.
"I currently use AutoEntry for managing and organizing all of my receipts," he said. "It syncs well with the most popular accounting software programs. I can scan receipts and invoices and have a digital copy in my phone in seconds. Once uploaded, the system automatically extracts the numbers and inputs it into the system. There is no manual input required. This is a huge plus because even the smallest human error can completely compromise accuracy and snowball into huge errors. It's a major benefit for someone like me who isn't a strong number-cruncher.
AutoEntry uses a credit-based pricing model that's billed as a monthly subscription. What that means is that you're paying for credits to use for things like invoices (1 credit), bills with line items extracted (2 credits), bank statements (3 credits per page), and so on. Unused credits are rolled over into the following month. Plans range from the Bronze service tier, which costs $12 per month for 50 credits, to the Platinum service tier that costs $98 per month and comes with 500 credits.
Key takeaway: There are many receipt-tracking software solutions. The three most popular apps among the small business owners we spoke with are Expensify, Rydoo and AutoEntry.