Why receipt management is important
Businesses must capture and store business receipts efficiently. Here’s why:
To Prepare for Tax Season
Effective receipt storage simplifies tax preparation, eliminating the minutes and hours spent rifling through paper documents that get in the way of a productive tax preparation process.
It also makes answering questions that may come up during tax preparation season easier to answer without the stress of attempting to track down specific paper receipts in your filing cabinet.
To Streamline Expense Reimbursements
Employee expense reimbursements occur when employees pay for business expenses using their own money, and their employer then refunds them the amount within a reasonable time.
Understandably, this process tends to require stricter policies for business-related expenses than those purchases made with a corporate card—with an emphasized need for documentation, business purpose details, and approval checks.
To process and properly account for reimbursements, corporate finance teams oftentimes must chase down their employees for details and documentation, which is extremely time-consuming and distracting when trying to close the books.
By storing receipts effectively, you support a more efficient expense reimbursement process by eliminating the difficult and unnecessary task of sorting through collections of physical receipts.
This streamlined approach allows you to locate necessary transaction records readily, empowering finance teams to process reimbursements efficiently. Tools like Rho give you more means to achieve clearer financial insights and quickly make business decisions.
To Control Spend
Proper receipt storage can help you identify spending trends and pinpoint issues early.
You maintain a clear picture of spending habits by tracking expenses on a job code or project basis.
For example, if one specific job code has had an extraordinary number of transactions, you can flag this to your leadership team and discuss ways to address the problem.
To Support the Finance Team and an Efficient Month-end Close
Receipts significantly enhance the efficiency of the month-end closing process, a typically tense period for finance teams.
Well-organized receipts – filed systematically – aid the finance team in precise bookkeeping and maintaining reliable records.
This preparedness allows your business to be ready for a smoother audit process, minimizing concerns that typically arise beforehand in case of an audit.
To Facilitate Warranties
Some purchases - computer equipment or hardware, for example - could qualify for a warranty if the product breaks or is faulty.
However, many retailers require a paper or electronic receipt when navigating the warranty process.
Having diligent recordkeeping can help ensure you have the proper records to take advantage of equipment warranties.
Why store receipts digitally
While many organizations rely on traditional paper-based systems for managing receipts, significant benefits come with digitizing this process.
Scanning receipts and maintaining a digital copy makes it faster for finance teams to go back to reference transactions as needed compared to rifling through paper records that may or may not be available anymore.
You can more easily link digitally stored receipts to specific expense reports, job codes, or projects, enabling better tracking of company spending. No more paper clips or staples. A real-time budget dashboard provides more oversight than a pile of expense reports.
One of the biggest sources of expense delays is errors caused by manual entry. With digital receipt storage, the risk of handwriting issues or mistakes caused by the sheer amount of time it takes to complete paper-based expense reports is reduced.
No Misplaced Receipt Issues
How many times have you lost a receipt you needed for an expense reimbursement? When you use a receipt scanner app like the Rho Mobile App right after your purchase, you eliminate any risk of losing a receipt.
Digital receipt files are easier to manage during accounting reconciliation because citing specific data or information takes less time than locating a paper record.
Handling a Wide Array of Receipt Formats
Businesses often need to deal with receipts in various formats; it’s generally easier to standardize. By scanning paper-based receipts, you can create an efficient expense tracking system that simplifies the process - regardless of the type of vendor you are working with.
How to store receipts digitally
Tip 1: Save Receipts to Google Drive
An expense incurred can be easily stored in Google Drive by scanning the paper receipt and saving it in organized folders. Paper receipts could also be forwarded as email receipts, which can be stored systematically.
Tip 2: Develop the Habit, Snapshot Your Receipts Promptly
Commit to promptly capturing images of your receipts after purchases. With high-powered scanning apps on your iPhone or Android device, this process has never been simpler. The moment you get a receipt, snap a picture of it.
Not only will this save the physical receipt digitally, but it also opens doors to additional benefits. Many of these scanning apps offer advanced features like data extraction.
This functionality allows for further analysis and categorizations, providing detailed insights into your spending trends. Building this habit of immediate receipt scanning will enhance receipt management and make expense tracking highly efficient.
3. Use an Expense Management App
An expense management app could be a game-changer. Not only does it store the receipt, but it also aids in matching the receipt with the correct expense, easing the reimbursement process.
This practice eliminates paper clutter and transforms expense reporting into a simple, seamless process, which brings us to Rho.
How Rho makes it easy to capture and store receipts
Fortunately, Rho adds simplicity to your receipt storage and expense management process, reducing it to just a few easy steps.
Let's explore how Rho works using a practical example of a construction small business owner purchasing lumber from a hardware retailer for a specific job.
Step 1: Make Your Purchase
Before starting the new job, you visit a hardware store and purchase your lumber using your virtual or physical Rho credit card at the cash register.
Step 2: Take a Photo of Your Receipt
Don’t forget to take a picture of your printed receipt! This simple step can save you (and your finance team) a world of frustration later.
Step 3: Upload the Receipt Picture to Rho
You can do this one of two easy ways.
Option One: Upload the picture to the Rho Mobile App, available on both iOS and Android devices.
Option Two: If you have enabled text alerts, respond to the text alert you receive with the picture of your receipt.
Step 4: Detail Your Transaction in the Rho Mobile App
Regardless of location, you can utilize Rho's mobile app to fill in necessary transaction details like job codes, notes, or additional receipt details.
Step 5: Let Rho Do the Rest
In seconds, all your recorded data flawlessly integrates from Rho into your chosen general ledger software or ERP, including QuickBooks Online, NetSuite, Sage Intacct, and Microsoft Dynamics 365 Business Central.
Rho’s accounting software integrations automate the payment transaction data reconciliation process for you, so your finance team can spend less time completing month-end close and more time managing the business.
Have Acumatica or another ERP solution? No problem! Rho supports CSV exports, making Rho data flow easily into your accounting solution.
Wrap-up: Perfect receipt management with Rho
Whether you're a business owner or a finance team looking to boost efficiency and cut costs, the Rho platform and Rho Mobile App can help you create a digital receipt filing system that simplifies your expense management process.
To learn more about how Rho can help you simplify receipt management and expense management generally, get in touch with a Rho payment specialist today!
FAQ: Receipt Management
How long should I keep electronic copies of receipts?
The IRS provides different guidelines, ranging from three years from the date you originally filed to seven years if you file a claim for a loss from worthless securities or bad debt deduction. Please consult IRS guidelines for more information.
Do I need to keep paper receipts?
While there are platforms like Rho that can simplify your expense management process, it is still good practice to maintain copies of different types of receipts.
Fortunately, Rho maintains digital receipt files in our system for up to seven years.
How do I organize receipts for tax purposes?
It’s generally easiest to maintain digital records of your receipts and organize them in clearly labeled, permissioned folders using a cloud-based digital file storage system like Dropbox or Google Drive.
How does the Rho Mobile App support an efficient month-end close?
The Rho Mobile App’s instant receipt capture ensures controllers and finance leaders don’t worry about chasing employees at month-end.
Plus, employees can upload important transaction data when they fill out expense information in the Rho Mobile App, eliminating some of the back-end work finance teams traditionally complete at month-end.
Read why sales teams love the Rho Mobile App today.
Does Rho connect to QuickBooks Online or Sage Intacct?
Rho offers QuickBooks Online, Sage Intacct, NetSuite, and Microsoft Dynamics 365 Business Central integrations. For other ERPs, Rho makes importing Rho data easy via CSV.