The Best Way to Keep Receipts and Expenses Organized in 2023
Updated: Sep 8
What is the easiest, the most convenient and the fastest way to organize your receipts, expenses and income in 2023?
In the world we live in today, we encounter a mixture of paper and e-receipts, invoices and other documents. For small businesses and freelancers, sorting and categorizing your expenses is not only a convenience, as it is often mandated by law. At least if you want to claim any tax deductions, that is. The easiest way to ensure you don't miss any deductions is to use a receipt scanning app.
Organizing receipts may seem like a tedious and cumbersome task, but doing so can save you time, money, and stress in the (not so) long run. Whether you're an individual looking to keep your personal expenses in check, a small business owner needing to track expenditures, or a freelancer managing a labyrinth of receipts, we've got answers for you. Read on to discover the best way to keep receipts organized in 2023.
Why Organizing Receipts Matters
Keeping your receipts organized is crucial for several reasons, including but not of course limited to:
Tax Deductions: Properly organized receipts can help you claim all your eligible tax deductions.
Expense Tracking: Regularly checking receipts can help you maintain a budget and monitor your spending habits. We have a separate blog article for detailed things you should know about receipt scanning and expense tracking.
Warranty Claims: Some purchases come with warranties that require the original receipt for claims. Storing the warranty receipt digitally helps you ensure that it is both easily found and not damaged after 1-2 years.
So we strongly recommend that you have some way to organize all your receipts and expenses. It is a plus if your solution also tracks your income records, bank statements, and other important business documents. There are the age-old methods of filing cabinets, envelopes and clipboards, full-on digital solutions like receipt scanner and expense tracker apps, and some solutions in-between like using a document scanner and Google Drive folders manually.
Traditional Methods: The Paper Trail
Filing Cabinets: The Paper Graveyard
The filing cabinet is a relic from a time when paper was everything and 'cloud' was something you only looked up to see in the sky. If you’re nostalgic for the days of flipping through folders, this age-old and battle-tested method keeps your receipts secure and organized in what could be considered the sarcophagus of paperwork.
Envelopes: Like Pinterest of Old Times
You might think envelopes are only good for birthday cards and last-minute gift money, but behold the envelope system for organizing receipts. A method so old-school, it's almost vintage. Tuck your receipts into marked envelopes and pretend you're sorting Hogwarts letters, only less magical and more about tax deductions.
The Clipboard System: A Catch-Em-All System for Pokemon Enthusiasts
Remember clipboards? Those handheld boards that made anyone holding them seem important? Well, they're not just for survey takers or production assistants on movie sets. Use a clipboard as your 'in-box' for receipts you collect on the fly, and feel like a clipboard-carrying professional—just one who deals in grocery and gas receipts.
Going Digital With Receipt Scanner and Expense Tracker Apps
As you probably noticed, I made some funny remarks about the old methods of dealing with receipts and small business preaccounting. What you should do in the modern world is of course to use a dedicated small business receipt scanner and organizer app. Here are some options that range from completely free to a 1-2 cups of coffee per month. Well worth the investment.
Google Drive
Scan and store your receipts in dedicated folders within Google Drive for a free, secure option. This is pretty much like the digital version of the "Envelope" method described in the previous section.
Evernote
Evernote is a popular app that offers the functionality of scanning documents and tagging your receipts for easier retrieval. However, it is not specifically tailored for expense management and is more of a general-purpose solution to document management and note-taking.
Receipt Scanner and Expense Tracking Apps
Receipt scanners and organizer apps like SparkReceipt are the modern way of dealing with both paper and digital expenses. You scan track expenses by scanning paper receipts, by adding PDF invoices or even by forwarding your e-receipts directly to the app.
Best Practices
Scan Your Expenses Immediately: Make it a habit to immediately add and sort your expenses. Otherwise the paper receipt is destined to crumble, fade and be forgotten to a bottom of a purse somewhere. The more time go by, the harder they are usually to find. When I used
Back-Up Your Data: Whether it’s scanning, photocopying or using a general cloud storage, always have a backup. Even though cloud-based receipt scanning software of course use good practises for backups, it is always a good idea to pull e.g. monthly reports out of them and store them in a separate place in case you lose access to your account for any reason.
Expert Tips and Tricks
Utilize OCR Technology: Optical Character Recognition can help by digitizing the text for you, making the text within the scanned receipts searchable and auto-processable by other advanced technologies like generative AI. OCR is a common feature in most expense tracker apps today. Some apps, like SparkReceipt, go further by integrating generative AI to analyze the scanned text contents.
Use AI for categorization: How about having a dedicated receipt organizer right in your pocket? With the recent advancements in generative AI, you should use an app that can deeply understand the contents of your purchase and categorize your receipts accurately in all scenarios.
Add your e-receipt forwarding address to most used services: In SparkReceipt and some other similar receipt scanners, there is a functionality to forward all your e-receipts directly to the app. That is all good and convenient all in itself, but a true expert will add the personal forwarding address directly to the most common sources of receipts, e.g. like Uber.
Conclusion
Organizing your receipts doesn't have to be a chore. Whether you prefer a traditional paper method, a cutting-edge digital app, or a combination of both, there's a best way to keep receipts organized that suits your lifestyle and budget. Implementing these methods and best practices can make the process straightforward and beneficial in the long run. That being said, the convenience and speed provided by modern receipt scanner apps, in our opinion, far outweight their (usually) low monthly cost.
Liked this article? Share it with your friends and family who could benefit from a more organized approach to scanning, tracking and keeping receipts! Feel free to comment below with your own tips and recommendations.