Receipt Processing

A receipt, different from an invoice, is a document or slip that serves as a proof of transaction when payment has been made or received for purchases of goods and services.

The transaction may happen between an enterprise and a consumer in a store, where the receipt will be issued by the cashier, or between two different business entities. The customer can pay in the form of cash, checks, or direct transfer when invoices are received. When payment is fulfilled, it is in the company’s best interest to release a receipt immediately or within the next business day.

It is generally a good practice to record or to store receipts properly. Besides serving as proof of payment or goods received, receipts are also required when filing taxes for certain tax exemptions.

A receipt typically includes the following details:

Date and time of the transaction
Customer’s name
Vendor’s name
Item, product, or service purchased
Prices of all items
Total purchase amount
Reference number
Address
Any discounts or codes
Any voucher used
Method of payment (cash, credit, or check)
Bank details (if applicable)

A receipt, different from an invoice, is a document or slip that serves as a proof of transaction when payment has been made or received for purchases of goods and services.

The transaction may happen between an enterprise and a consumer in a store, where the receipt will be issued by the cashier, or between two different business entities. The customer can pay in the form of cash, checks, or direct transfer when invoices are received. When payment is fulfilled, it is in the company’s best interest to release a receipt immediately or within the next business day.

It is generally a good practice to record or to store receipts properly. Besides serving as proof of payment or goods received, receipts are also required when filing taxes for certain tax exemptions.

A receipt typically includes the following details:

Date and time of the transaction
Customer’s name
Vendor’s name
Item, product, or service purchased
Prices of all items
Total purchase amount
Reference number
Address
Any discounts or codes
Any voucher used
Method of payment (cash, credit, or check)
Bank details (if applicable)

The Process

Receipt Processing refers to the specific function of an Accounts department that documents receipts received from the company’s vendors and suppliers, and issues receipts to customers and clients when receiving payment for their sales and making payments for their purchases.

The process begins with collating receipts collected over a specific period of time, which an accountant will then summarize by capturing the information and making entries in the appropriate journals based on the methods of payment.

For example, if the customer had paid cash, the cash receipt journal is debited while the sales journal is credited. If the payment was made with check, the accounts receivable is debited until the check is deposited, after which an entry in the cash journal is entered and the accounts receivable credited.

When a receipt is received from a supplier, it means that the payment has been acknowledged and the transaction has taken place. The accountant will then debit the accounts payable and credit the cash journal.

Receipt Processing refers to the specific function of an Accounts department that documents receipts received from the company’s vendors and suppliers, and issues receipts to customers and clients when receiving payment for their sales and making payments for their purchases.

The process begins with collating receipts collected over a specific period of time, which an accountant will then summarize by capturing the information and making entries in the appropriate journals based on the methods of payment.

For example, if the customer had paid cash, the cash receipt journal is debited while the sales journal is credited. If the payment was made with check, the accounts receivable is debited until the check is deposited, after which an entry in the cash journal is entered and the accounts receivable credited.

When a receipt is received from a supplier, it means that the payment has been acknowledged and the transaction has taken place. The accountant will then debit the accounts payable and credit the cash journal.

Why Outsource Receipt Processing?

A strict standard operating procedure (SOP) should be put in place when processing receipts in order to avoid or detect fraud within the company and to ensure no information was stolen or altered.

Even if the company’s staff are honest, law-abiding employees who love their employer, as long as the process is traditional and manually executed with pen and paper, there are bound to be difficult challenges and error simply due to the fact that no human is perfect. In such a case, more often than not, it results in financial losses to the company, and more resources will be needed to comb the books in order to search for the exact errors, which adds to the many days already spent in the first part of the process.

The current trend of receipt processing involves new detection technology and artificial intelligence, as well as software with integrated features which take away much of the manual labour of data entry. By capturing images of receipts using a tool as simple as a mobile phone camera, a software capable of the optical character recognition (OCR) feature is able to extract accurate information by recognizing the texts and characters in any image, document, or files, immediately classify the nature of the expense, attach the digital copy to the data entry, and posting into the accounting software.

As such, with the removal of manual data entry, following up on these receipts simply requires one more set of eyes to match the correct information scanned to the original receipt, record accordingly in the company's financial records, and file away appropriately for future reference.

While some manual labour is still required to ensure accuracy and precision in the extracted output, automation plays a crucial role in increasing efficiency in any business. The digitization of receipts, combined with automatic extraction of scanned documents, and the faster report and delivery drastically reduce the initial processing time and the possibility of human error, as well as make operations easier to manage overall.

The challenge faced by many small businesses, especially those that just started, is the lack of resources to allocate to the activity of processing receipts as the real focus should be on business growth, creating sales, and generating revenue. However, not having the time, energy, or money to hire a dedicated headcount or buy a receipt processing software are not excuses for management to ignore this part of operations altogether.

Larger corporations with an in-house accounting department will usually invest in the tools necessary to help their staff’s performance become more efficient, and this approach directly translates into time savings and profit. Smaller business owners, who are rightfully focusing all their resources on marketing their products and services, are often left to perform operational tasks like receipt processing during afterhours on workdays, learning on their own with little to no knowledge of how to properly manage their entire accounts.

In such a scenario, the small business owner is left with two choices. The first is learning the ways of accounting through courses or training. The second is to outsource these tedious tasks to an accounting firm who, more often than not, already has the updated software, knowledge, experience, and professionals trained to handle these common processes, and more, on a daily basis.

A strict standard operating procedure (SOP) should be put in place when processing receipts in order to avoid or detect fraud within the company and to ensure no information was stolen or altered.

Even if the company’s staff are honest, law-abiding employees who love their employer, as long as the process is traditional and manually executed with pen and paper, there are bound to be difficult challenges and error simply due to the fact that no human is perfect. In such a case, more often than not, it results in financial losses to the company, and more resources will be needed to comb the books in order to search for the exact errors, which adds to the many days already spent in the first part of the process.

The current trend of receipt processing involves new detection technology and artificial intelligence, as well as software with integrated features which take away much of the manual labour of data entry. By capturing images of receipts using a tool as simple as a mobile phone camera, a software capable of the optical character recognition (OCR) feature is able to extract accurate information by recognizing the texts and characters in any image, document, or files, immediately classify the nature of the expense, attach the digital copy to the data entry, and posting into the accounting software.

As such, with the removal of manual data entry, following up on these receipts simply requires one more set of eyes to match the correct information scanned to the original receipt, record accordingly in the company's financial records, and file away appropriately for future reference.

While some manual labour is still required to ensure accuracy and precision in the extracted output, automation plays a crucial role in increasing efficiency in any business. The digitization of receipts, combined with automatic extraction of scanned documents, and the faster report and delivery drastically reduce the initial processing time and the possibility of human error, as well as make operations easier to manage overall.

The challenge faced by many small businesses, especially those that just started, is the lack of resources to allocate to the activity of processing receipts as the real focus should be on business growth, creating sales, and generating revenue. However, not having the time, energy, or money to hire a dedicated headcount or buy a receipt processing software are not excuses for management to ignore this part of operations altogether.

Larger corporations with an in-house accounting department will usually invest in the tools necessary to help their staff’s performance become more efficient, and this approach directly translates into time savings and profit. Smaller business owners, who are rightfully focusing all their resources on marketing their products and services, are often left to perform operational tasks like receipt processing during afterhours on workdays, learning on their own with little to no knowledge of how to properly manage their entire accounts.

In such a scenario, the small business owner is left with two choices. The first is learning the ways of accounting through courses or training. The second is to outsource these tedious tasks to an accounting firm who, more often than not, already has the updated software, knowledge, experience, and professionals trained to handle these common processes, and more, on a daily basis.

Benefits of Hiring an Outsourced Receipt Processing Partner

Standard operational model:

An outsource accounting firm does not need to create systems from scratch – they are already using one. Each step of the process has already been carefully planned and built to preserve the integrity of your account. Rather than figuring out the key to increase efficiency doing these mundane tasks on your own, hand the task over to an accounting firm who has the skills and capabilities to handle the job, and who is already handling the same job for other companies.

Access to high-end software:

In order to process a large quantity of receipts and transactions among various financial documents for clients of all sizes and fields, accounting firms will typically invest heavily into cloud-based accounting tools and software to run their daily operations as finance is their field of expertise. Outsourcing your accounting tasks to an outsource partner means tapping into their resources without expending any of your own costs to acquire and install new software, which can cost you precious capital, and you will have to learn to use yourself as opposed to having a team who already understand how to use it.

Hours of free productive time:

Every business owner knows that time is the most valuable resource. Releasing your operational responsibilities to an outsource partner frees up precious productive hours that can be otherwise used for planning strategies, building relationships and networks, or simply for resting without worry. The monthly expenses needed for this partnership can prove to be worth the investment, even if only for the assurance that your company's accounting reports are in good hands and completed.

If you are looking for an outsource partner to take over your company’s receipt processing and other financial functions, call or email us today to find out how we can help you scale your business.

Standard operational model:

An outsource accounting firm does not need to create systems from scratch – they are already using one. Each step of the process has already been carefully planned and built to preserve the integrity of your account. Rather than figuring out the key to increase efficiency doing these mundane tasks on your own, hand the task over to an accounting firm who has the skills and capabilities to handle the job, and who is already handling the same job for other companies.

Access to high-end software:

In order to process a large quantity of receipts and transactions among various financial documents for clients of all sizes and fields, accounting firms will typically invest heavily into cloud-based accounting tools and software to run their daily operations as finance is their field of expertise. Outsourcing your accounting tasks to an outsource partner means tapping into their resources without expending any of your own costs to acquire and install new software, which can cost you precious capital, and you will have to learn to use yourself as opposed to having a team who already understand how to use it.

Hours of free productive time:

Every business owner knows that time is the most valuable resource. Releasing your operational responsibilities to an outsource partner frees up precious productive hours that can be otherwise used for planning strategies, building relationships and networks, or simply for resting without worry. The monthly expenses needed for this partnership can prove to be worth the investment, even if only for the assurance that your company's accounting reports are in good hands and completed.

If you are looking for an outsource partner to take over your company’s receipt processing and other financial functions, call or email us today to find out how we can help you scale your business.

Standard operational model:

An outsource accounting firm does not need to create systems from scratch – they are already using one. Each step of the process has already been carefully planned and built to preserve the integrity of your account. Rather than figuring out the key to increase efficiency doing these mundane tasks on your own, hand the task over to an accounting firm who has the skills and capabilities to handle the job, and who is already handling the same job for other companies.

Access to high-end software:

In order to process a large quantity of receipts and transactions among various financial documents for clients of all sizes and fields, accounting firms will typically invest heavily into cloud-based accounting tools and software to run their daily operations as finance is their field of expertise. Outsourcing your accounting tasks to an outsource partner means tapping into their resources without expending any of your own costs to acquire and install new software, which can cost you precious capital, and you will have to learn to use yourself as opposed to having a team who already understand how to use it.

Hours of free productive time:

Every business owner knows that time is the most valuable resource. Releasing your operational responsibilities to an outsource partner frees up precious productive hours that can be otherwise used for planning strategies, building relationships and networks, or simply for resting without worry. The monthly expenses needed for this partnership can prove to be worth the investment, even if only for the assurance that your company's accounting reports are in good hands and completed.

If you are looking for an outsource partner to take over your company’s receipt processing and other financial functions, call or email us today to find out how we can help you scale your business.

Every SME Can Become Large

InTune Outsourcing - Creating Financially Driven Businesses and Entrepreneurs.

Show Me How

Every SME Can Become Large

InTune Outsourcing - Creating Financially Driven Businesses and Entrepreneurs.

Show Me How