Over the course of your life, you’ve probably known someone who holds on to all their receipts, no matter how old or trivial those receipts may seem. Maybe it was your grandfather and his shoebox. Maybe it’s your mother and her filing cabinet. Maybe it’s you and that overflowing desk drawer.
While the practice of saving receipts can verge on obsession, startups have good reasons to retain and organize those little scraps of paper with care. Receipts help your business keep track of expenses, so you can provide proof of purchase for any future exchanges or claims under warranty, understand what your organization is spending too much money on, reimburse employees when necessary, and, of course, deduct everything you possibly can on your taxes.
But there’s another benefit to keeping receipts: account reconciliation.
Think of receipts as the primary sources in your company’s financial history. When you’re scrutinizing your bank statements to make sure you’ve received every good and service you’ve paid for, and that your account reflects your actual history of transactions, receipts (almost) always provide empirical evidence of what actually happened. They lend a rock-solid foundation to a comparison between two corresponding data sets.
In the accounting field, we call this process receipt matching. Historically, receipt matching has been a detail-driven and time-consuming endeavor, but it’s an important part of recordkeeping for any growing business. And, ultimately, associating every transaction with a receipt will make your life as a business owner a lot easier—here’s how:
How Receipt Matching Can Make Startups’ Lives Easier
Where did that $200 expense last September come from, anyway? Your transaction history can’t always provide the answers to questions like this. You might see $200 deducted from your bank account, with the transaction dated September 7th, but perhaps you don’t recognize the company in the description, and there’s no additional category or label associated with the record. Whether automatically generated or logged in a hurry, the entry just lacks the information you need to understand what went down.
…Unless you kept the matching receipt. Because receipts are shared between a buyer and seller, they contain all the information both parties need: the seller, what they sold, how the buyer paid for the item or service, and where and when the transaction took place.
Consider the scenario above—except you find an an unexplainable number in your records—and multiply it by 50. Imagine you have to hunt down dozens of mysterious transactions. Now imagine it’s the afternoon of the last day before you have to close your books for the quarter.
This is why it’s vital to keep your receipts and regularly match them to your accounts. If you do, updating your books is simply a matter of plugging information from one source into another. If you don’t, you’ll have to rack your brain and create a patchwork of data from emails, phone logs, internet histories—anything that explains what you paid for and why. Good luck with that.
Complete Control Over Expenses
Are you spending too much on office supplies? How much are your client lunches really costing you? Receipt matching makes it easy to separate your expenses into detailed, discrete categories, so you can see larger trends and patterns within your transaction history.
Moreover, receipts are your ammunition in the event that you get overcharged, don’t receive the items you order, or become a victim of fraud. Without the solid proof of a receipt, your bank or credit provider—not to mention the merchant in question—has no concrete reason to issue you a refund. It’s the reason so many retailers ask you to bring a receipt whenever you seek to return or trade in a purchase.
Defense Against Possible Audits
If you choose not to claim the standard deduction on your annual taxes, you will to need to hang onto your receipts. Itemized deductions hinge on detailed, reliable business records. And if you can’t provide a paper trail for the expenses you deduct, your chances of getting through an audit unscathed are slim.
The IRS recommends that you keep all receipts from the last three years for purchases of $75 or more for precisely this reason. No auditor wants to weed through statements to track down missing financial information, and what business owner wants to irritate the IRS?
How inDinero Handles Receipt Matching
With all this in mind, it may be difficult to ignore the compulsion to find a shoebox and uncrumple all the paper receipts in your pockets or wallet, or plastered to the floor of your car. Don’t go into hoarding mode just yet. Today’s technology has significantly sped up the process of receipt matching and reduced the need to hold onto physical proofs of purchase.
With inDinero, you can match your receipts to your transactions instantaneously. There are several ways to do this:
A) From your inDinero dashboard
You can upload receipts manually from your computer via our cloud-based platform, by navigating to Accounts and then to Receipts in the sidebar. Once you’re in the Receipt pane, click “New Receipt,” and you’ll be prompted to upload a file from your computer. It can be an image (such as a screenshot or photo), PDF, spreadsheet—whatever format in which the receipt was provided to you. From there, you can enter the transaction amount, receipt date, and category, as well as a description of the item.
Hit “Save,” and our system will automatically pull up a list of transactions that may match the receipt. Once you’ve found the matching transaction, click on the item, and then click “Link Transaction.” That’s it!
B) Send your receipts in via email
You can also email our service team to upload and match your receipts for you. All you need to do is send the file and information to firstname.lastname@example.org.
C) Send in photos or screenshots from your phone on the go
Finally, if you’re away from your office or computer—say, at a convention or business dinner—you can snap a photo of the receipt with a smartphone and add it to your account or email it to your inDinero team.
Already an inDinero client? Hopefully you’re already taking advantage of the receipt matching capabilities, but if you do have any additional questions, don’t hesitate to reach out to your team via your inDinero Help Center.
Not working with inDinero yet? Learn more about receipt matching and other key features and services we offer to help make your life easier as a business owner. Schedule a call with one of our financial experts today.