How to Store Business Receipts: An Effective Strategy

Managing and storing receipts in the current business environment is more than just a clerical task—it's an integral part of financial management, tax compliance, and operational efficiency. Proper receipt storage can save your business from financial discrepancies, legal issues, and potential tax audits.

Here, we've developed an effective strategy to help businesses organize and store business receipts with a special focus on leveraging a digital solution.

Why is it important for small business owners to store receipts?

Receipts are critical for maintaining accurate financial records. They serve as proof of business transactions, and expense receipts are essential for tax purposes, budgeting, and financial planning.

Mismanagement of receipts can lead to inaccurate tax filings, missed deductions, or issues during audits. Developing an effective strategy for storing receipts is crucial, as it can ultimately affect your bottom line.

What is the best way to store and organize business receipts electronically?

Unless you want to manually enter potentially hundreds of receipts throughout the year, we highly recommend organizing and storing receipts electronically. The digital method will save you an enormous amount of time and money.

Here's a step-by-step strategy to help you manage your business receipts effectively and efficiently.

1. Develop a systematic approach

Before integrating any tools or applications, establish a systematic approach to handling receipts, bank statements, and credit card statements. Categorize and file receipts based on type (e.g., office supplies, travel expenses) or by projects.

Decide on a storage method—whether digital or physical—and how frequently you'll organize and review these documents. Remember that physical storage is prone to damage and loss, so we recommend a digital solution.

A digital systematic approach ensures consistency and makes retrieval easier when needed. This approach to filing receipts will save you time, money, space, and frustration.

2. Go digital

Moving away from paper-based systems to digital solutions is advisable for efficiency and security. Organizing receipts electronically reduces physical space needs and minimizes the risk of loss due to damage or misplacement.

When looking for digital tools for receipt management, consider the following:

• Scanning apps: Use mobile apps designed to scan documents to convert physical receipts into digital formats quickly.

• Cloud storage services: Choose a platform that can be used to store and organize digital receipts, with the added benefit of allowing you to access your documents from anywhere at any time.

• Dedicated financial software: Consider investing in financial software or apps specializing in expense tracking and receipt management. These tools often offer additional features like categorization, reporting, and integration with accounting software.

3. Maintain regular updates

Consistency is vital in receipt management. Set aside regular intervals—weekly, bi-weekly, or monthly—to update and organize your receipts and receipt storage. This practice helps avoid backlogs and ensures your financial records are always up-to-date. It’s also an excellent opportunity to review your expenses and stay on top of your financial management.

4. Plan for security and backups

Digital solutions offer enhanced security compared to physical storage but are not immune to risks. Opt for platforms with robust security measures and regularly back up your data. Shoeboxed, for example, offers secure cloud storage, ensuring your data is protected against loss or theft.

5. Train your team

If your business involves multiple people who incur expenses, they must understand the process and importance of receipt management. Train your team on how to collect, record, and submit receipts promptly and correctly. Clear guidelines and a simple, consistent process can significantly enhance compliance and efficiency in receipt organization.

6. Plan for long-term storage

Understand the legal requirements for receipt retention in your jurisdiction, as they vary by location and type of expense. Businesses are typically advised to keep receipts for at least three to seven years. Plan for long-term storage accordingly, ensuring your chosen method remains viable and accessible.

How can Shoeboxed help small business owners store receipts electronically?

Shoeboxed is specifically designed to organize and store receipts electronically. Using a digital solution like Shoeboxed or any other chosen system ensures consistency and compliance across the organization.

Shoeboxed is a good solution for how to store business receipts.

Shoeboxed's award-winning features

Shoeboxed offers many features to help small business owners store and organize receipts effectively and efficiently.

Receipt scanning

Users can scan receipts using a mobile app or mail them directly to Shoeboxed for scanning and uploading. The mobile app lets users use their phone's camera to scan small business receipts from anywhere. 

The receipt app features OCR technology for converting printed text into searchable data. The mobile app is excellent for quick and easy uploads and tracking business expenses all in one place.

Business owners can also opt to outsource receipt organization to Shoeboxed. Users can stuff a postage-paid envelope, also known as a Magic Envelope, full of physical receipts and mail it directly to Shoeboxed’s processing center for free. The receipts are scanned, human-verified, and uploaded into their Shoeboxed account.

In addition, a small business owner can forward receipts to the designated Shoeboxed email address they received when signing up. The forwarded receipts will automatically appear in their Shoeboxed account.

Shoeboxed even offers a custom Gmail plug-in to auto-import digital receipts. The plug-in locates e-receipts in your inbox and automatically sends them to your Shoeboxed account.

Business owners can upload receipts to their Shoeboxed account from their desktop or laptop. Multiple receipts can be submitted simultaneously with the drag-and-drop method.

Data extraction

Shoeboxed turns physical receipts into digital records.

Shoeboxed extracts data from receipts, such as vendor, date, and total amount, automating the data entry and making the information easily searchable, editable, and accessible, especially during tax season.

Organization and accessibility

Easily organize receipts electronically with Shoeboxed.

Receipts are categorized and stored securely online. The digital filing system is accessible from anywhere, at any time.

Expense reports

With Shoeboxed, your scanned receipts are automatically transformed into comprehensive expense reports with just the click of a few buttons. This makes reimbursements and tax deductions a much easier and quicker process.

Audit-ready

Shoeboxed ensures all your receipts are audit-ready and turned into data for tax time.

The IRS accepts digitized receipts, ensuring audit compliance and readiness. During an audit, the receipts of any questionable business expenses can be easily searched and accessed. 

No more flipping through hundreds of receipts to find the needle in the haystack. A systematic approach to filing receipts saves time, money, and frustration.

Frequently asked questions

Is there an app to organize receipts electronically?

Shoeboxed is an example of an app that organizes receipts and creates a filing system. This system makes storage, reimbursements, and tax deductions a breeze, especially during tax season and audits.

Shoeboxed is an innovative app designed to simplify managing business receipts electronically. This cloud-based solution caters to the needs of freelancers, small business owners, and corporate finance departments. By transforming physical receipts into digital data, Shoeboxed ensures businesses can track their expenses effortlessly and more accurately.

Shoeboxed offers a comprehensive solution that streamlines expense tracking and ensures compliance and accuracy. Adopting Shoeboxed allows businesses to transform their receipt management processes, enabling better financial oversight and strategic decision-making.

Can digital receipts be used for tax purposes?

Yes, digital receipts managed through Shoeboxed can be used for tax purposes. Shoeboxed allows digitizing and organizing your paper receipts into IRS-accepted digital formats. 

The application uses advanced technology to scan, extract, and categorize important information from your receipts, which can then be securely stored in the cloud and easily accessible during tax season and audits.

In conclusion

Efficient receipt management is non-negotiable in today's business environment. Businesses can enhance financial accuracy, ensure compliance, and streamline operations by understanding the significance of small business owners' receipts, organizing them systematically, and leveraging innovative solutions like Shoeboxed.

Caryl Ramsey has years of experience assisting in different aspects of bookkeeping, taxes, and customer service. She uses a variety of accounting software for setting up client information, reconciling accounts, coding expenses, running financial reports, and preparing tax returns. She is also experienced in setting up corporations with the State Corporation Commission and the IRS.

About Shoeboxed!

Shoeboxed is a receipt scanning service with receipt management software that supports multiple receipt capture methods: send, scan, upload, forward, and more!

You can stuff your receipts into one of our Magic Envelopes (prepaid postage within the US). Use our receipt tracker + receipt scanner app (iPhone, iPad and Android) to snap a picture while on the go. Auto-import receipts from Gmail. Or forward a receipt to your designated Shoeboxed email address.

Turn your receipts into data and deductibles with our expense reports, including IRS-accepted receipt images.

Join over 1 million businesses scanning & organizing receipts, creating expense reports, and more—with Shoeboxed.

Try Shoeboxed today!