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Is your accounts team buried neck-deep in business receipts, struggling to keep up with an unrelenting daily transaction stream?
Maintaining a proper receipt record may seem like an elementary business procedure, but it is equally challenging, especially if your business is growing. If your business is a booming one, then the receipts would just keep on piling up. Under such trying circumstances, being able to capture and process data from receipts automatically can truly be a lifesaver.
In this article, we'll understand the role receipts play in running a business and how you can save important data from your receipts through automation.
Importance of receipts in business
When it comes to record-keeping in business, you can never be too careful. Let's take a look at how important receipts are for your business:
1. Track your business's progress
A receipt record gives you clarity on your transactions and helps you stay on top of your money flow. With that, you can determine if you're spending prudently and utilizing your funds efficiently.
Every day, your business deals with a lot of people- customers, suppliers, employees, contractors, middlemen, vendors, etc. Receipts record useful details like the date, parties involved, money exchanged, products sold, discounts, mode of payment, etc., and introduce transparency into your transactions. In case there are any disputes or discrepancies, receipts protect all parties involved by providing full information of the deal settlement.
3. Internal accounting
Businesses need to follow stringent record-keeping procedures, and every penny owned needs to be accounted for. Whenever a financial report is being prepared, you can refer to receipts for accurate documentation. In case your business is undergoing a tax audit, receipts can come in handy for cross-referencing. In other words, receipts are extremely useful for businesses during accounting and report preparations.
4. Prepare tax returns
Receipts help you keep track of your deductible expenses so that you don't miss out on anything when filling out tax return claims. You won't end up overpaying your taxes and might even see deductions in your tax payments. Moreover, receipts back up your claims during an inspection, and a proper record will help speed up the auditing process.
Types of receipts
1. Purchase receipt
A purchase receipt is a valid proof of purchase given by the seller to the buyer and records that the payment is complete. It contains specifics like the name of the product, product ID, quantities sold, sales price, discounts, total price, tax charges, service charges, buyer details, date and time of sales, seller information, etc.
2. Sales invoices
A sales invoice records the product/service details sold to the client, time and date of transaction, money owed by the customer, and the deadline on which the customer has to complete the payment.
3. Expense invoices
While performing duties for a client, you might have to pay for certain errands like travel expenses, procuring raw material, employing labor, etc., out of your own pocket. If your client reimburses these expenses, then you'll have to create an expense invoice that documents the expenses you incurred and what your client owes you.
4. Payroll receipts
A payroll receipt is a signed acknowledgment by the employee that they have received the salary for that month. It typically contains employee information, payment details, employee signature, and date.
Manual data extraction vs. Automated data extraction from receipts
1. Manual data extraction from receipts
Manual data extraction is the traditional method of gathering important details from documents (such as receipts), and manually entering them into a computer or physical files.
While manual data extraction is being phased out, many businesses, especially ones dealing with small amounts of data, continue using this age-old method for record-keeping.
These businesses would argue that manual extraction takes little time to set up and provides employment opportunities to many, as high-level qualifications are not required for data entry jobs.
However, businesses create and receive large quantities of receipts on a day-to-day basis. Having employees manually capture and organize important details from these receipts seems unpractical, especially in today's digital era.
Manual data entry is time-consuming and way too error-prone than one can afford to be in today's competitive environment. During manual keying of data from receipts, employees need to maintain a high level of accuracy, which can only be done through double entry. Meaning, first data needs to be entered, then a detailed manual verification needs to be performed to ensure that there are no errors.
Evidently, manual data extraction is a tedious affair. Moreover, your data integrity is very likely to get compromised, which is something you can't afford when dealing with valuable documents like receipts, invoices, and statements. One small discrepancy could lead to serious legal or financial repercussions.
2. Automated data extraction from receipts
In automated data extraction process, data is captured from documents through software tools and recorded digitally. Software such as OMR, ICR, RPA, etc., use AI and ML algorithms to capture important details from physical or electronic documents and save them in an organized manner in computer files.
Automated data entry technology has evolved significantly since the '90s. You can also capture unstructured information and automatically save it in a pre-defined format. With smart technologies like ICR, you can easily scan hand-filled receipts and capture written information accurately on your software.
Technology has been disrupting traditional business workflows for quite some time now. Through automated data extraction, you can process hundreds of receipts daily, fast-tracking your accounting and bookkeeping processes substantially.
Even though automation introduces a high degree of ease and flexibility in your daily finance-related procedures, you might feel apprehensive about going all-in. Cyber safety is a major concern for many businesses. You don't want your everyday transaction data to fall into the wrong hands.
Moreover, some companies resist automated receipt capturing because there is usually a learning curve involved in operating the software, and you need to invest time and resources to train your employees.
Despite these hesitations, most businesses find that the speed and accuracy automated data extraction injects into your workflows, trump the small risks involved.
Steps to automate receipt data extraction with Docsumo
Docsumo's data extraction interface is quite intuitive and facilitates quick processing of all types of business receipts, invoices, bank statements, forms, etc. Follow this simple 4-step procedure for efficient and accurate receipt capture:
1. Upload the receipt
To upload your receipt in an image or PDF format, click on the 'new' button at the top left of the web-app. Select the required document from your file explorer and click on upload. Your receipt will be uploaded in 30 seconds or less, and Docsumo will automatically classify it and add it to the documents list.
While uploading, Docsumo's advanced processing will check your document/image for any clarity or angle issues. Any problems found are automatically corrected.
Once your receipt capture is complete, click on the 'start reviewing' button at the top right of the web-app. In the review panel, you'll see your uploaded receipt on the right and the details extracted on the left.
When you click on a particular piece of information on your receipt, it automatically gets added to the corresponding field on the left side of the review panel.
You can also edit line items in the data extracted in tabular form.
Once you're done editing and validating the extracted information, click on the 'approve' button at the bottom left of the review panel.
4. Download your File
In the last step, you can download your approved data in 4 different file formats:
Through Docsumo's speedy processing and advanced verification, you can extract information from your receipts with 99% accuracy, and streamline your accounting workflows.
Having an organized record of your receipts and invoices is not just important for your peace of mind, but also essential for your business's smooth functioning and progress.
Through Docsumo's automated receipt capture, you can process thousands of receipts daily, in a matter of a few hours. With Docsumo, you save crucial transaction information digitally and won't have to store pages and pages of invoices, receipts, bank statements, bills, etc.
Docsumo has specific APIs and ML algorithms in place to process data from all kinds of documents. So no matter which sphere your business operates in, if you're looking for accuracy and speed in your document processing solution, then Docsumo is the right fit for you.