Tag: bookkeeping

Tools to Help Small Business Owners Track and Organize Business Receipts

As we discussed in the last blog, keeping track of business receipts and invoices can be challenging for small business owners, especially given how busy they are. Fortunately, there are a variety of small business receipt tracking tools available to make organization much easier.

Why Digitize Your Receipts?

It is a good idea to invest in a scanner or a phone scanning app so you can store receipts electronically. Over time, the ink on receipts can fade. Receipts can also become unreadable due to wrinkles or smudges, and they can easily be misplaced. To avoid these issues, scan your receipts soon after each purchase.

Once your receipts are scanned, you need a system to organize them.

I no longer own a pizza restaurant, but I do manage an Airbnb property. For this business, I organize my receipts into digital folders by category. Most of my expenses are set up on auto-pay, which makes tracking much easier. Other bills are emailed to me, allowing me to download them as PDFs and store them electronically. As a result, I have very few paper receipts to manage.

This simple method of scanning and organizing digital files works well for me. However, if I were still running a restaurant, I would likely need a more robust solution. Below are several receipt tracking apps you may want to consider for managing receipts and expenses in your small business.

Shoeboxed

Shoeboxed is both a receipt scanning app and a receipt scanning service. If you have accumulated a large number of paper receipts, you can save time by mailing them to Shoeboxed, where they will be scanned and uploaded for you.

You can scan receipts with your phone or mail them in for processing, and forward emailed receipts directly into the app. It uses Optical Character Recognition (OCR) to convert receipts into searchable text, letting you search by vendor, date, or expense category. The app automatically organizes receipts based on your preferences and includes mileage tracking along with human data verification for accuracy. It also integrates with many popular accounting systems.

Best for: Small business owners, freelancers, consultants, nonprofits, and anyone managing a high volume of receipts

Considerations:

• Not as strong for full expense tracking compared to accounting platforms

• Pricing increases with the volume of receipts

• Not a complete accounting system

Wave Receipts

Wave Receipts is part of the Wave platform and works alongside Wave Accounting. It allows small business owners to capture receipts and automatically integrate them into their accounting records. It is not a standalone receipt management system.

You can scan receipts using your phone or upload them via email. It integrates seamlessly with Wave’s free accounting software with no limit on the number of receipts you can upload. The tool automatically creates expense transactions from your receipts and matches them with bank transactions to reduce duplication, while cloud storage makes retrieval simple.

Best for: Very small businesses, freelancers, and startups looking for a budget-friendly option

Considerations:

• Limited integration with other accounting systems

• Fewer organizational features compared to more advanced tools

Neat Receipts

Neat Receipts is a simple receipt scanning and management system. It is essentially a modern, cloud-based version of a desktop filing system.

You can capture receipts via email, photo, scan, or upload, and it uses OCR technology with human verification for high accuracy. This creates searchable, organized records and provides a clear audit trail for tax and accounting purposes. It integrates with QuickBooks and other accounting systems, making it easy to keep everything in one organized place.

Best for: Very small businesses with a large number of paper receipts that already use an accounting system

Considerations:

• Primarily a filing system rather than a full accounting solution

• Limited accounting features

• Requires an annual subscription paid upfront

FreshBooks

FreshBooks is a full accounting platform designed for very small businesses. In addition to receipt tracking, it includes invoicing, proposals, time tracking, and bank reconciliation.

The mobile app lets you scan receipts on the go, and it automatically categorizes expenses while allowing you to email receipts directly into the system. It links receipts to bank transactions and combines receipt management, expense tracking, and invoicing in one convenient platform. You can also generate tax reports and profit-and-loss statements, plus it offers access to accounting support.

Best for: Solopreneurs, service-based businesses, and consultants who want an all-in-one system

Considerations:

• May be more than you need if you only want receipt management

• You may pay for features you do not plan to use

Which Receipt Tracking Tool Is Right for You?

All of these tools offer strong options for managing receipts and small business expense management. The right choice depends on your business needs, the volume of receipts you handle, and whether you want a standalone system or a full accounting platform.

Here is a simple guide to help you decide:

Choose Shoeboxed if:

• You have a large volume of paper receipts

• You want audit-ready records with minimal effort

• You already use separate accounting software

Choose Wave Receipts if:

• You want a low-cost, simple solution

• Your finances are straightforward

• You want receipts tied directly to basic bookkeeping

Choose Neat Receipts if:

• You want well-organized records with light accounting support

• You prefer structured, guided workflows

• You already use accounting software and just need better organization

Choose FreshBooks if:

• You run a service-based business

• You invoice clients and track billable expenses

• You want a polished, all-in-one accounting system.

Have you tried any of these systems? If so, I would love to hear about your experience.

5 Simple Tips to Keep Your Business Receipts Organized

Running a small business means keeping track of many financial details, and one of the most important is organizing your receipts and invoices.

Good record keeping not only helps you understand where your money is going, but it also makes tax preparation easier and protects you if your business is ever audited. With a few simple systems, you can organize your business receipts and stay on top of your expenses without adding more stress to your busy schedule.

Serving customers, building relationships, networking, paying bills, sending invoices, and managing employees is the life of a small business owner. With so many moving parts, it’s easy for small details to slip through the cracks. That’s why having a simple system to organize your business expenses and receipts is so important.

My husband and I owned our restaurant in the days before phone apps, cloud storage, and doing many tasks online.  I had to keep track of paper receipts and bills.  My favorite tool was an accordion file. It had a pocket for each month.  When my produce supplier made his twice-a-week delivery, the invoices went into my accordion file. When I paid the window washer, the receipt went into the file. When I paid a bill for the business, I wrote the check number and date paid on the bill and slid it into the file. At the end of each month, I totaled my expenses by category and entered them into a spreadsheet.  At the end of the year, all my receipts were in my accordion file so that I could easily verify my expenses. Then the receipts went into a manilla envelope to be saved in case I needed them in the future.

Today, there are alternatives to mailing invoices and writing paper checks, which make record keeping easier.  Yet, many business owners still find it challenging to keep track of their business receipts.  Below are some easy tips to help you keep your business receipts and invoices organized.  In my next blog, I will look at some apps to help even more.

Have a designated place for receipts and invoices

Many organizers recommend that you have three designated receptacles, such as trays, baskets, or folders, in which you put important papers until you have time to deal with them. One tray would be for bills that need to be paid, one for completed work that needs to be invoiced, and the third for documents to be filed.  As soon as documents are received, whether through the mail or delivered in person, they should be reviewed for correctness and then placed in the appropriate repository until you are ready to pay bills or send out invoices. Upon dealing with these items, the supporting documents should be put in the “file” tray until you have time to file them.

Set up online folders to store receipts and invoices that are sent digitally

Many of your suppliers will send you invoices via email or text that allow you to simply enter your payment information. Save these receipts in digital files.  To eliminate the need to keep paper receipts, you can scan them and add them to your digital file system.  Scan apps for phones can make this an easy process. As an alternative to scanning, you can snap a picture of your receipts and store the pictures.  Scanning receipts also helps to protect their legibility, so you can read them clearly in the future.

Setup Auto-Pay for Regularly Occurring Bills

Most banks make it easy to set up automatic payments for regularly occurring bills.  Some companies, such as utility companies, will send the bill to the bank. You should down load the bill for your records, however, as the bank may not store the bill long-term. Banks must store payment records for several years, but they are not required to store invoices. Make it a habit to download the bill at the time you authorize payment.  Store the invoices in the digital files you have created on your computer.

Schedule Time Regularly for Bill Paying and Invoicing

Set aside time each week, or more often, to pay bills and send out invoices.  It is important to put this on your calendar and commit to keeping up with these tasks.  Scheduling time on your calendar helps you to build habits that ensure that your bills get paid, your invoices get sent out, and your records are kept up-to-date.  In the long run, this habit will save you money and reduce your stress.

Match your receipts with your bank and credit card transactions.

Include time in your bill management schedule to review each bank statement and credit card statement. Match each transaction with your receipts.  If you are missing a receipt, the earlier you realize this the sooner you can search for it and the more likely you will be to find it. Keep in mind that if you should face an audit, the IRS will not accept credit card statements. You must be able to produce legible receipts for each expense you deducted on your tax return.

All your business documents should be kept for at least seven years after you have filed your tax return. You should also set up backup storage, in case you have a problem with your computer.  You can store your files on an external hard drive or in the cloud.

Follow the steps above to organize your receipts and invoices.  It will reduce your stress and save you money on your taxes.  Watch for my next blog on apps to make these processes even easier.

Know Your Financial Statements—The Income Statement

As a business owner, understanding your financial statements is key to making informed decisions. In this post, we’re diving into the income statement—a crucial report that shows how well your business is performing over a specific period of time, whether it’s a month, a quarter, or a year. Simply put, the income statement tells you how much revenue you’ve earned, how much you’ve spent, and—ultimately—whether you’re turning a profit.

Revenue: The Starting Point

The income statement starts with revenue, also known as sales or income. This represents the money your business earns before any expenses are subtracted. For most businesses, revenue can be broken down into different categories, depending on the nature of the business.

Common sources of revenue include:

  • Sales (products or services)
  • Fees and commissions
  • Rental income and interest income
  • For nonprofits, revenue also includes donations

You might also break down your revenue into specific categories to gain deeper insights into how your business is performing in different areas. Here are a few examples of how businesses typically organize revenue:

  • In-store vs. online sales
  • Food vs. beverage sales (for restaurants)
  • Restaurant sales vs. catering sales
  • Sales by department (women’s, men’s, and children’s clothing)
  • Sales by location (if you have multiple stores)

Cost of Goods Sold (COGS): Direct Costs Tied to Sales

Next, we have the Cost of Goods Sold (COGS), which represents the direct costs associated with producing or acquiring the goods you sell. COGS is often separated from operating expenses because it directly impacts your revenue.

The formula for COGS is:

COGS = Beginning Inventory + Purchases – Ending Inventory

For manufacturers, this cost also includes direct labor (the wages paid to employees who produce the product) and the raw materials used to create the product.

Keep in mind, determining your COGS accurately requires precise inventory management. Regular inventory counts—whether manual or tracked through software—are essential. Also, fluctuations in purchase prices can affect your COGS, especially if inventory items were bought at different prices.

Operating Expenses: The Cost of Running Your Business

Now, let’s talk about operating expenses—the costs involved in running your business day-to-day. These expenses can be fixed or variable:

  • Fixed expenses stay the same every month, such as rent, salaries, insurance, and depreciation.
  • Variable expenses change from month to month, such as wages (if you’re paying hourly employees), utilities, credit card fees, and supplies.

Some expenses can fall into both categories. Take advertising for example: while contracted services like digital ads might be a fixed cost, other components—like ad spend or promotional events—could fluctuate based on your business decisions.

Other Expenses: Beyond Operations

In addition to operating expenses, businesses also incur other expenses that are not tied directly to day-to-day operations. These are typically separated on the income statement.

Here are a few examples of “other” expenses:

  • Loan payments: The principal portion of a loan repayment isn’t deductible, but the interest portion is. Only the interest is accounted for here.
  • Capital expenditures (CapEx): While expenses related to property and equipment are legitimate business costs, they aren’t shown directly on the income statement. Instead, these are capitalized on the balance sheet and then depreciated over time.
  • Taxes: These include property taxes, sales taxes, and income taxes, and are generally listed separately from operating expenses.

The Bottom Line: Profit

After all expenses have been deducted, what’s left is your net profit (or loss). This is the amount that ultimately accrues to the owner(s)—and what determines if your business is financially healthy.

Final Thoughts

The income statement isn’t just a tool for accountants; it’s an essential document for any business owner. Understanding each section allows you to make smarter decisions about pricing, expenses, and growth. By regularly reviewing your income statement, you’ll have a clear picture of where your business stands and what adjustments might be necessary to hit your goals.

Here’s a template to show you what an income statement looks like:

Company Name
2025
Revenue
  Less:  Cost of Goods Sold 
Gross Profit $             –  
Expenses:
  Administrative Expenses
  Advertising and marketing
  Credit card fees
  Depreciation
  Insurance
  Interest expense
  Licensing and registration
  Professional Services
  Professional Memberships
  Office Expense
  Owner’s Draw
  Rent
  Supplies
  Telephone & Utilities
  Travel Expenses
  Wages
Total Expenses $             –  
Net Profit (Loss) $             –  

If you’d like a changeable balance sheet template, feel free to email me at susan.ball5@aol.com, and I’ll send it your way!