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As your business grows you’re faced with the burden of managing thousands of paper and online receipts. If you’re still doing your receipt management manually (and chances are that you are) you may wonder how to organize business receipts with automation. 

I advise and help my clients in adopting automated accounting systems, as these enhance efficiency and save you those precious hours spent on manual data entry.

Not just that, with automation of business receipts, you're significantly reducing the risk of human errors that can lead to financial discrepancies down the line. Furthermore, you’ll find yourself making faster decisions due to real-time access to receipts. Automating your business receipts also supports compliance during audits.

These days, all businesses, large and small, have their own set of sustainability goals. One goal should be ‘going paperless’. Automation allows you to do that.

Overall, by adopting automated receipt management, you’re not only streamlining operations but also fortifying financial integrity and positioning your business for sustained growth and agility.

Broadly speaking, there are five steps to organizing and keep track of your business receipts:

  1. Capture receipts electronically by using a digital receipt management software or app.
  2. Store safely and organize your electronic receipts by utilizing cloud storage services
  3. Make use of optical character recognition (OCR) technology for extracting relevant information from receipts and categorizing them automatically.
  4. Integrate receipt management software with your accounting software for smooth expense tracking and reporting.
  5. Monitor and take regular feedback to assess system performance.

Now, let’s get into the details. 

Step 1. Choosing the right automation tool to organize business receipts electronically

A recent survey makes the case for automating business receipts pretty clear: 71% of respondents were of the view that increased automation would be the biggest trend in e-invoicing in 2023. 

Further, 26% of businesses are currently working on achieving receipts automation by 2024. Make sure you don’t fall behind.

Now, there are thousands of automation tools available in the market. So how will you choose the right business receipts automation tool? 

Well, to do that you should take into account the following factors: 

  • Compatibility with your present accounting software
  • User-friendly interface
  • OCR accuracy(we will explain this in a bit)
  • Integration options 
  • Pricing plans
  • User reviews

Some tool types you could consider are:

Receipt scanning and tracking apps

Receipt scanning apps usually allow users to use their phone camera to ingest receipts and turn them into structured data to feed into a receipt tracking app. 

A receipt tracker is a tool or app that helps you organize and manage your receipts. It allows you to store digitally and categorize receipts for expenses, making it easier to track and retrieve them. 

Many tools have features of both receipt scanners and receipt trackers. Some examples include Ramp, Quickbooks Online, Zoho Expense, Expensify, Wave, Neat, Shoeboxed, and more.

Expense management software

This type of software is used to automate tracking, submission, and approval of business expenses. You can easily capture receipts, categorize expenses, and generate reports through this software. Some examples are Ramp, SAP Concur, Zoho Expense, Coupa, Navan, etc.

Cloud storage solutions

These solutions are used to store, retrieve and share files over the internet. Your data is password protected and encrypted so there are no security issues. You could explore Microsoft OneDrive, IDrive, Sync, Apple iCloud, and similar storage systems.

Notes apps

you can use tools like Evernote or Google Docs for receipts by capturing and organizing them into notes. You can cover details like date and amount. Not just that, you can use tags, notebooks, and text notes for categorization and context. While these options are the easiest to get started with, they'll be difficult to manage over time and require a lot of manual effort. 

Once you've zeroed in on the automation tools to organize business receipts, the next step is to set up a filing system.

Step 2. Setting up a filing system

When you’re deciding how to organize invoices and receipts, setting up a filing system is important. Here, the aim is to maintain organized and efficient record-keeping processes. This helps you easily access and retrieve important receipts when you need them.

Whatever tool you use, the entire process can be broken down into three steps given below:

  1. Categorizing receipts based on expense types. Some common categories are Utilities, Office Supplies, and Travel.
  2. Using a consistent naming convention, including dates and brief descriptions, for easy identification.
  3. Creating folders corresponding to expense categories, and then organizing them by year or month for efficient retrieval.

Now you're ready to implement automation processes. But how to go about it? Let me explain.

Step 3. Implementing automation of business receipts

Implementing automation is a two-layered process wherein the following steps are involved:

  1. Receipt capture automation
  2. Data extraction automation

For a better understanding, let's get into the details of these two steps.

Receipt capture automation

Receipt capture automation involves using technology, such as optical character recognition (OCR) software, to extract and digitize information from paper or digital receipts. 

With the help of this technology you can easily capture details like date, amount, and vendor from receipts. Further, you can edit the captured content or perform searches. This eliminates chances of manual errors and saves a lot of time thereby streamlining expense management. 

Data extraction automation

Data extraction automation involves using software tools to automatically gather information from various sources, such as websites, databases, or documents, and organize it in a usable format. To extract data, you can:

a. Implement Optical Character Recognition (OCR) technology to extract text data from scanned receipts, making it easier to process and analyze. One tool to do that is Tesseract, a free software that can recognize text in images and convert it into machine-readable text. 

b. Integrate software solutions that specialize in extracting key data fields from receipts, ensuring accurate and reliable extraction for further automation processes. 

At this point some of you may wonder if these printed receipts work for tax purposes or if the IRS is accommodating enough to accept pictures of receipts. After all, what’s the point of automating if you still have to hold on to your wad of old receipts? 

Well, the answer is, yes, the IRS accepts electronic receipts as long as they are readable and have all the information that it needs. 

But don’t throw away those old paper receipts just yet! You should keep them for a minimum period of three years as a backup, in case of an audit. This also applies to LLCs.

Implementing automation processes for receipt capture and data extraction is just half the story. What's the other half, you may ask? 

Well, now we integrate the automation processes with our present accounting systems.

Step 4. Integrating automation processes with accounting systems

As you would’ve guessed, small businesses use various methods to keep track of sales. Some are manual methods like paper records or spreadsheets.

However, these days many businesses are also using accounting software to monitor sales, generate invoices, and track financial transactions efficiently. 

So, it’s important to seamlessly transfer your financial data from automated receipt tools to the accounting system, ensuring accurate and up-to-date financial records.

Again, there are three aspects to the above:

  1. Streamlining data transfer: Integrating automation processes with accounting software facilitates seamless data transfer between your different systems. Aside from reducing manual efforts, they also minimize data entry errors.
  2. Ensuring accuracy in bookkeeping: It’s a known fact that automation helps enhance accuracy by minimizing manual bookkeeping errors. It ensures that financial records are consistently and precisely updated, contributing to reliable bookkeeping.
  3. Compatibility considerations: When integrating automation processes, it's crucial to consider compatibility between the accounting software and automation tools. When there’s a seamless interaction between the systems, workflows become smooth with lesser disruptions.

Step 5. Monitoring and taking feedbacks of the integrated systems

Once you've successfully integrated your brand-new automation processes with your accounting software, you'll need to regularly assess the system's performance. You must make sure that it aligns with business requirements and identify any potential issues.

You'll also need to periodically compare financial records in the software with bank statements. If there are any discrepancies, get to the bottom of those and resolve them without any delays. This will help you in maintaining the integrity of your financial data, a crucial point.

Further, you'll need to make sure that you're adhering to legal requirements for digital receipts regarding electronic signature laws and tax regulations. To safeguard sensitive financial information, use data encryption and safe storage protocols. Additionally, have someone on your team schedule back-ups to prevent loss of data due to unexpected system failures. Yes, they do happen.

No implementation is complete without setting up a feedback mechanism. Analyze efficiency metrics like processing times, accuracy, scalability, error rates, and others to assess the performance of your automated business receipts system.

Furthermore, seek user feedback actively or if you are yourself using the system, identify areas for improvement and implement them.

6 free tools for business receipt organization

Often, small business owners who don’t have too many receipts to process are looking for free tools for receipt automation. So, if you too are exploring free tools to automate your business receipts, here’s a list:

  • Ramp: Offers free unlimited receipt collection, matching, and coding by integrations with Gmail, Outlook, Amazon Business, Uber, Lyft, and more. Discover all expense management features here.
  • Shoeboxed: Offers a free plan for scanning and uploading receipts. However, the users need to perform manual data extraction.
  • Expensify: While Expensify has paid plans, it offers limited free features for receipt scanning, expense tracking, and basic reporting.
  • Receipts by Veryfi: Provides free receipt and invoice scanning and uploading with OCR technology.
  • Zoho Expense: Offers a free plan for small businesses with features like receipt scanning, expense reporting, and mileage tracking.
  • Easy Expense: Offers free receipt scanning, mileage tracking and linking a single bank account.

Everyone’s needs are unique. So, before selecting a receipt automation tool, it's advisable to check its specific features, user reviews, and any limitations associated with free plans to make sure they align with your requirements.

But, if you want a one word answer to what’s a really good free receipt app? I’d suggest you explore Ramp. 

I’ve found Ramp has a really good free receipt scanning and uploading feature. Once uploaded, it can parse receipts for creating expense report entries. You can do all of this for free on your smartphone. Isn’t that great?

Further, I’m also asked if you scan receipts into Excel? After all, most of us are already familiar with Excel tools. The answer’s yes, you can scan receipts into Excel. You’ll have to use your smartphone’s scanner to scan the receipt. Next, you can save the image as PDF or JPEG and then insert the image into Excel. 

However, if you want to extract data, you will have to use an OCR tool or even Excel’s data extraction feature. As you would’ve guessed rightly, this process is rather time-consuming.

Summing up

When considering how to organize business receipts with automation, you need to follow all of the five steps mentioned above. 

Reiterating them, the process begins with choosing the right automation tools like receipt scanning apps, expense management software and cloud storage solutions. This is followed by setting up of filing systems which involves categorizing receipts, using naming conventions and creating folders as per expense categories. The next step is implementing receipt capture and data extraction automation. 

Once that’s done, we integrate automations with the present accounting systems. Last but not the least, we track and monitor how the systems are working and correct the glitches.  

Thus, organizing invoices and receipts with automation is a great way to maintain accurate and up to date financial records. Once you have successfully integrated your accounting system with an automated receipt management system, you can ramp up the processes of tracking expenses, reconciling accounts and generating financial reports, all in a flash.

Loved reading the content? Read more small business management tips from Gary on Ledger Labs blog.

Try Ramp for free.
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Founder & CEO, Ledger Labs, Inc.
Gary Jain is the founder and CEO of California-based The Ledger Labs, a top-notch automation-focused accounting firm. Gary is a certified accountant with more than 12 years of expertise. Among his diverse skills are business strategy, data analysis, and advanced financial reporting using BI tools. With his deep knowledge of automation and AI tools, he helps businesses shift their resources from mundane repetitive tasks to higher level financial tasks, thereby maximizing returns. By adopting his solutions and strategies, many businesses have transformed their financial departments from cost centers to revenue centers. As a CFO advisor, he believes in tightening the cash outflow tap and making business owners take the optimal approach to growing their profits. Gary is also the co-founder of Cosmos7, Inc., and co-founder and CFO of Branding Labs, Inc. He has also earned several accounting certifications from the IRS and Association of International Certified Professional Accountants.
Ramp is dedicated to helping businesses of all sizes make informed decisions. We adhere to strict editorial guidelines to ensure that our content meets and maintains our high standards.








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