How e-receipts streamline business spend

In the not-so-distant past, expense management was synonymous with mountains of paper receipts. Every business expense was accompanied by a physical document that needed to be stored and managed. To make matters worse, paper receipts were notorious for their tendency to get lost or damaged just when you needed them the most. Unsurprisingly, accountants of the pre-digital era often found themselves buried under a sea of paper! 

Fast forward to today, and we have an effective digital solution: e-receipts. These electronic records are transforming the way businesses track financial transactions. They serve as undeniable proof of purchases and sales, making it easier for finance teams to keep tabs on different transactions and accurately determine various tax liabilities, such as VAT.

In this blog, we will explore the different facets of e-receipts, including their benefits for companies. Read on!

What is an electronic receipt (e-receipt)?

An electronic receipt, popularly known as an e-receipt, is a digital form of a paper receipt. Just like its paper counterpart, an e-receipt serves as proof of payment for a transaction. It features all vital details of a transaction, such as the date, time, items purchased, and amount paid, along with the seller’s details like address, phone number, email address and others. 

However, unlike paper receipts, e-receipts are issued electronically, typically via email, text message, or through a dedicated app or portal. The key advantage of e-receipts lies in the ease of storage and management, as they can be saved on your device or in the cloud. This makes them easily retrievable and safe against loss or damage.

How do e-receipts work?

E-receipts are a digital innovation that transforms the details of your transactions into an easily accessible digital file. Here is how it works:

Step 1: Completing a transaction

The generation of a digital receipt begins upon completion of a transaction when you swipe your card at the POS (point of sale). The system then gathers various data points such as vendor’s details, list of items purchased, their respective prices, and applicable VAT or other taxes. Instead of being printed on paper, this information is formatted into a digital document and delivered electronically.

Step 2: E-receipt is created and shared

E-receipts can be available in a number of formats depending on the vendor. While PDFs that are friendly to email are among the most common formats, e-receipts can also be offered in the form of HTML, plaintext, or image files. This adaptability helps meet diverse business needs pertaining to data storage, accessibility, and operational handling.

Step 3: Data capture and expense categorisation

For companies that process a significant number of business expenses, the real potential of e-receipts is revealed in data capture. Advanced software or apps (powered by OCR technology) automatically categorise the receipts into the correct expense categories, such as tagging them as ‘Office Supplies’ or ‘Business Lunch’. This automation minimises human error and accelerates expense reporting.

Step 4: Data integration and storage

The underlying technology that powers e-receipts helps determine the data integration and storage. For instance, e-receipts delivered via email use APIs to integrate directly with accounting software. On the other hand, QR code-based e-receipts are scanned using smartphone apps, offering easy storage on mobile devices.

To better understand the process of e-receipts, let’s consider the example of your marketing executive attending a conference in Dubai. He dines at a local restaurant and pays his bill using his corporate card, but instead of receiving a paper receipt, he receives an e-receipt via email. The e-receipt is automatically forwarded to your company’s expense management system, where the built-in AI categorises it under ‘business meals.’ There is no manual entry or scope for error, and he doesn’t have to worry about misplacing the receipt while submitting the expense report.

Benefits of e-receipts for your business

Adopting e-receipts can bring a multitude of benefits to your business. Here are some key advantages you might find beneficial:

• Convenience and efficiency: E-receipts eliminate the need to handle and store physical receipts, which can often be prone to loss or damage. With e-receipts, you can easily search and retrieve transaction details using keywords and tags. This can streamline your expense management process, making it efficient and less time-consuming.
• Reduction in human errors: Manual data entry is often subject to errors, which can lead to discrepancies in your financial records. E-receipts minimise this risk by automating the data entry process, even for a high volume of transactions. This ensures accurate financial records, leading to reliable financial reporting and informed decision-making.
• Financial benefits: E-receipts can help your business save money as the costs associated with paper, printing, and storage can add up over time. By switching to a digital system, you can significantly reduce these costs. The long-term cost benefits of e-receipts extend beyond savings on paper and printing. They also include savings from improved efficiency and accuracy in expense management processes.
• Environmental impact: Switching to e-receipts can also contribute to your company’s Corporate Social Responsibility (CSR) goals. By reducing the use of paper, you are saving trees and also reducing your carbon footprint. This aligns with global sustainability efforts and can boost your company’s reputation as an environmentally conscious business.

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How to store e-receipts?

Here are three methods you can use to store the e-receipts efficiently:

Cloud storage

Cloud platforms such as Google Drive, Dropbox, or OneDrive provide a safe and reachable way to keep e-receipts. These services enable you to keep all e-receipts in one spot that is easily accessible around the clock. This means you can easily retrieve your e-receipts whenever you need them, whether you are in the office or on the go.

Dedicated apps

There are also apps specifically designed for managing receipts. These apps offer features such as automatic categorisation, expense tracking, and integration with accounting software. By using a dedicated app, you can keep all your e-receipts organised in one place, making it easier to manage your expenses and reduce the risk of losing important receipts.

Integration with accounting software

Integrating e-receipts with accounting platforms like QuickBooks, Xero, or FreshBooks can streamline your financial management process. This integration enables you to import the e-receipts automatically into your accounting software, eliminating the need for manual data entry. It also makes sure that your financial records are accurate and up-to-date, helping you to maintain a clear overview of your business expenses.

Best practices for managing e-receipts

Managing e-receipts effectively can significantly improve your expense management process. Here are some best practices you might find beneficial:

• Organising receipts: Having a centralised digital repository for receipts brings numerous benefits. It makes accessing, managing, and organising financial records for tax purposes a breeze. You no longer need to sift through stacks of paper receipts or worry about losing them. With e-receipts, all your transaction details are just a few clicks away, making expense management more efficient and less stressful. For instance, you might consider creating folders based on categories such as business expenses, personal expenses, or dates. To simplify the process of finding specific receipts.
• Backup strategies: The digital nature of e-receipts allows for easy and efficient backups. Regularly backing up your e-receipts is crucial to avoid any potential data loss. This can be done either manually or automatically, depending on the system you are using. Timely backups make sure that you have access to your financial records even if something goes wrong. 
• Security measures: E-receipts often contain sensitive financial information, making security a paramount concern. It is important to take steps to safeguard this data. Using encryption and password protection can help keep your e-receipts secure, ensuring that only authorised individuals have access to this information. Additionally, it is crucial to ensure that any cloud storage service or app you use to store your e-receipts complies with the latest data protection regulations.

How do e-receipts improve expense reporting and policy compliance?

Electronic receipts can significantly enhance your expense reporting processes and ensure compliance with financial policies. Let’s have a look at the different ways in which using digital receipts can improve your expense reporting and policy compliance:

Enhanced data analysis and decision-making

E-receipts provide valuable information that can be used for detailed data analytics and decision-making. With all transaction details digitally recorded, you can easily analyse your expenses to identify trends, monitor spending, and make informed financial decisions. The digital nature of e-receipts allows for real-time expense tracking, providing your finance team with up-to-date spend data.

Precise tax reporting

E-receipts can facilitate accurate VAT calculations and compliance with tax regulations. This is particularly beneficial in regions with specific tax requirements, like the UAE. With e-receipts, you can easily track and calculate the VAT on your transactions, ensuring that your tax returns are precise and compliant with FTA (Federal Tax Authority) regulations.

Convenience for employees and finance departments

E-receipts simplify the process of preparing and submitting expense reports. This helps save time and reduce the administrative burden on your employees and finance departments. Employees are no longer required to keep track of paper receipts or spend time manually entering expense details. The finance team can process expense reports quickly and accurately, leading to expense management processes.

Clear and accessible records for audits

E-receipts offer a clear and checkable record of transactions, which simplifies the process of tracking and confirming expenses during audits. With e-receipts, auditors can quickly access and review transaction details, reducing the time and effort required to complete the process. This transparency also helps ensure that your business is compliant with applicable financial policies and regulations.

Improved accountability

With each transaction digitally recorded and easily accessible, you can keep a clear and detailed record of different expense categories. This transparency can help prevent fraudulent activities and ensure that all expenses are justified and in line with the company’s expense policy. It can promote a culture of accountability among employees, as they know that all their expenses are being tracked and reviewed, leading to more responsible spending.

Unlock the benefits of e-receipts with Alaan

At Alaan, we are dedicated to helping businesses streamline their expense management processes. We recognise the challenges that traditional paper receipts pose as they are time-consuming to manage, prone to errors, and difficult to reconcile. That’s why our corporate cards allow your employees to make necessary business expense payments without using their own funds, thereby eliminating the need for reimbursements.

Our corporate cards record every online and offline purchase directly in our spend management software, which is integrated with your accounting system. This means that the employee can share e-receipts for different expenses with the expense report for verification. Our corporate cards come with smart controls such as transaction limits and category restrictions, ensuring compliance with your expense policy. By eliminating paper trails, streamlining data entry, and providing a verifiable audit trail, we significantly reduce the administrative burden associated with your expense management processes.

In instances where a supplier or vendor is unable to offer an e-receipt, your employees can utilise our mobile app. Equipped with built-in OCR technology, the app allows employees to scan and share receipts with the expense management software in just one click. This eliminates the requirement for manual expense reports and ensures accurate categorisation and reporting of every cost, thereby reducing the chances of human errors. The app also offers real-time notifications when your employees make any payments using the corporate card, enabling your finance team to track business expenses in real time.

Our spend management software offers real-time visibility and control over all your spending. It seamlessly integrates with leading accounting software solutions like Xero and Intuit Quickbooks, facilitating accurate expense management, precise VAT calculations, and compliance with government policies. 

Interested in learning more about how Alaan can streamline your expense management process? Get in touch with our experts today to learn more.