What are e-receipts (electronic receipts) and how do they work?

What is an electronic receipt?

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Electronic receipts, or e-receipts, are revolutionizing the way businesses handle transactions. E-receipts are a more organized, secure, and eco-friendly method for tracking business expenses. You can store them neatly in the cloud or integrate them directly into your financial management software.

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Businesses that have transitioned to digital expense receipts often discover advantages that go well beyond convenience. These include significant operational cost reductions and enhanced accuracy in financial reporting. In this article, we explain why e-receipts make it easier to monitor spending, streamline audits, and simplify expense reporting.

How do e-receipts work?

E-receipts compile all the details of your transactions into a user-friendly digital file that's at your fingertips whenever you need it.

Generation

When you finalize a transaction—whether by using your credit card in a brick-and-mortar store or confirming an online order—the system collects various data points, including the vendor's identity, list of purchased items, costs, and taxes. 

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The main difference between an e-receipt and a receipt is that an e-receipt won’t print onto thermal paper for you to take with you. Instead, all relevant information is compiled into a digital framework and delivered electronically.

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This should include details like:

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• Vendor’s identity and contact info
• Date and time of the transaction
• Name/CPU of the product or service
• Quantity of the products or services purchased
• Price of each product or service
• Total amount without tax
• Tax rate and tax amount
• Total price with tax
• Payment method

Formats

E-receipts are versatile. Email-friendly PDFs are among the most popular formats. However, electronic receipts can also be delivered as plaintext, HTML, or image files. This flexibility is designed to match varying business requirements around data storage, accessibility, and operational handling.

Data capture

When processing a large number of business expenses, data capture is where e-receipts show their true potential. Advanced algorithms automatically sort the receipts into the correct expense categories and tag them as “Office Supplies” or “Business Lunch,” for example. Automating this process minimizes human error and speeds up expense reporting.

Technology

The technology that powers e-receipts is their lifeline. For instance, email-based e-receipts use APIs to integrate directly with accounting software. On the other hand, QR code-based e-receipts are scanned by the customer's smartphone, making them more interactive and easily stored on mobile apps or devices.

How do e-receipts work in the real world?

For example, imagine a business traveler dining at an airport restaurant. She pays her bill, but instead of a paper receipt, she receives an email with a PDF attachment.

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The digital receipt is automatically forwarded to her company's expense management system, where the built-in AI categorizes it under “Travel Expenses.” There’s no manual entry or scope for error, and she doesn't have to worry about losing the receipt before returning to the office.

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To summarize, e-receipts are more than digital twins of their paper counterparts. They’re smarter, faster, and built to integrate seamlessly into modern businesses' digital infrastructure.

Benefits of using e-receipts for your business

There are many business advantages to using e-receipts. Here are five of the most important:

1. Cost savings

One of the most immediate benefits of e-receipts is cost savings. Businesses can realize significant operational savings by eliminating the need for thermal paper, ink, and additional labor costs associated with manual receipt handling.

2. Improved accuracy

Think of expense management as a row of dominoes. A single mistake can trigger a cascade of errors, leading to incorrect financial reports, compliance issues, or failed audits.

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By digitally capturing accurate transaction data from the outset, e-receipts prevent the first domino from tipping over. They can also automatically categorize expenses or integrate seamlessly into accounting software, providing precision and automation that paper receipts can’t match.

3. Better for the environment

While their practical advantages are clear, e-receipts also offer an eco-friendly alternative to paper receipts, many of which are coated with substances that make them non-recyclable. In an increasingly eco-conscious world, the shift to e-receipts can be part of your organization's broader environmental initiatives.

4. Easier retrieval

E-receipts solve the problem of how to store receipts digitally. This makes it easier to find specific receipts when needed, whether for a routine review or an unexpected audit, streamlining your overall business operations.

5. Simplified reimbursements

Creating expense reports can be time-consuming. But imagine the entire process, from purchase to reimbursement, is completely automated. E-receipts integrated with your expense management software streamline and simplify this workflow, freeing time in everyone’s schedules.

E-receipts for compliance and simplified reporting

E-receipts help businesses untangle the complexities of compliance and make reporting more straightforward. These are five reasons why: 

Easily searchable

Picture a vault where every receipt is organized, searchable, and secure. Whether stored in cloud storage or integrated directly into your accounting system, retrieving e-receipts quickly and easily via search dramatically benefits your business’s reporting and compliance operations.

Streamlined audit trails

For most businesses, audits are like unannounced guests—you never really want them, but you must be prepared just in case. E-receipts make these surprise visits less daunting. Their digital nature allows for straightforward audit trails, making it much easier for auditors to verify transactions and trace any irregularities.

Centralized reporting 

No one enjoys the scavenger hunt for crumpled paper receipts come tax season. E-receipts change the game by enabling centralized reporting. You can pull up all your transaction records on a single dashboard, allowing for effortless compilation and analysis. This speeds up reporting and makes it more accurate and comprehensive.

Automated tax calculations 

Errors in tax calculations can lead to penalties or even legal repercussions. E-receipts eliminate this concern by allowing for automated tax calculations. You can integrate them with your accounting automation software, automatically categorizing and calculating tax obligations based on the data captured during transactions.

Instant access for external parties

In many industries, compliance isn't just about internal management. It also involves external scrutiny. Tax authorities like the IRS treat e-receipts exactly like traditional paper receipts for tax and audit purposes. However, they’re even more convenient for this purpose, enabling instant third-party access.

How e-receipts integrate with Ramp to streamline expense management

Imagine if your expense management system could function like a self-cleaning oven, tidying up after each use, requiring minimal oversight, and performing efficiently. That's what you get when you combine e-receipts with Ramp's modern expense management software.

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With Ramp, e-receipts find their own home. The software grabs e-receipts from platforms like Gmail, Uber, and Amazon Business and automatically sorts them into the correct expense categories. It's like having a self-organizing filing cabinet that never goes out of order.

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Businesses that use Ramp can look forward to fewer errors, less time spent on tedious accounting tasks, greater financial productivity, and overall employee satisfaction—saving companies an average of 5% each year.