What is Receipt Automation, Its Benefits, & How to Get It

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  • Manual receipt processing is slow and error-prone. Accountants spend too much time extracting and validating receipt data manually, increasing the risk of mistakes and inefficiencies.
  • Receipt automation streamlines data extraction and validation. Using OCR technology, you can automatically capture, extract, and import receipt data into your accounting system, reducing manual workload and improving accuracy.
  • Automating receipt processing saves time and costs. Hiring a data entry clerk is expensive, while OCR software can process hundreds of receipts in seconds at a fraction of the cost.
  • You don’t have to automate everything at once. Even automating a single step, like digitizing receipts or automating data import, can significantly improve workflow efficiency and compliance.

What is Receipt Automation?

What is Receipt Automation?

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Receipt automation reduces the need for manual intervention in the receipt handling process like data extraction, validation, matching, and archiving. 

Receipt processing is traditionally done manually involving typing data from PDF receipts to a spreadsheet, validating receipts to detect fraud, matching them with corresponding invoices, and storing them for future use. 

The process usually starts with data extraction for receipts, if automated, the use of an OCR tool can be done as it extracts vital data automatically. 

For receipt validation, there can be ERP or accounting software where you can match certain documents that can reflect on the receipt information such as an invoice. 

Why is Receipt Automation Important?

Receipt automation is important because it brings a lot of benefits including cost savings, time reduction, improving accuracy, and reaching compliance. 

To put it into a realistic perspective, hiring a receipt data entry clerk can cost $22.17 per hour, with the manual entry of a single receipt into ERP or accounting software taking 10-15 minutes. 

In contrast, OCR software designed for receipts and invoices costs around $40 per month. It can process hundreds of receipts in seconds, allowing you to import data easily into your ERP or accounting system.

Furthermore, the OCR accuracy is much higher than human ones, in terms of receipt data extraction. In fact, …

This cost and time reduction will significantly bring down expenses once you scale up in numbers. 

You can also use presets in receipt automation software that can identify fraudulent and non-compliant receipts for you to highlight 

How Does Receipt Automation Work?

It may be different for each business, but here are the usual receipt automation steps:

How does receipt automation work
  1. Receipt Capture: Receipts are collected from various sources, including paper copies, emails, and mobile apps. Scanning, photographing, or uploading them creates a digital record for extraction.
  2. Receipt Data Extraction: you can receive receipts by email, paper, or mobile apps. You can use OCR technology to extract necessary information like amounts, items, and more from PDF receipts into spreadsheets such as CSV and XLS. 
  3. Data Validation: The system checks if the extracted data is accurate by matching it with invoices, inventory, and bank statements. It also verifies calculations, discounts, and tax charges.
  4. ERP/Accounting Software Integration: Once approved, the information then can be integrated into databases like ERP systems or accounting software for further receipt management analysis and reporting. 
  5. Storage & Compliance: Data is then stored in a hard drive or cloud storage where it is stored for future uses. This is often brought up when there are internal investigations within a business. 

But not every step can be automated. Some accountants only automate one step like receipt data capture where they use OCR receipt extraction tools just to capture data and process everything else manually. 

How to Automate Receipt Processing for Your Business

How to Automate Receipt Processing for Your Business

Once you know all the steps, here is how you can start automating receipt processing. It’s alright not to automate every step, but one automated step is better than doing it manually. 

Step 1: Digitize Receipts

Most receipts come in paper formats. For you to be able to process and automate your receipts, you need to digitize them into at least in PDF format. 

To do this you have to scan receipts using a scanner. Avoid using a phone camera as these are prone to disturbances that affect the resolution. 

If a smartphone is your only option, make sure to follow proper OCR preprocessing techniques to enhance clarity and accuracy.

Step 2: Centralize Receipt Receiving

Then, centralize all receipts by collecting them in a single system or location, such as a dedicated accounts receivable software or a sole email account. This ensures that every receipt is accounted for and easily accessible. 

Centralizing documents in one place prevents any receipt from being overlooked or missed, This approach not only keeps your receipts organized but also streamlines the receipt processing portion of your accounting. 

Step 3: Extract Data from Receipts

Next is to extract the digitized and centralized receipt that you have collected. You can use an OCR receipt scanner to extract necessary information from the PDF receipts you have collected. 

These extraction processes often involve converting PDFs into structured formats like CSV or XLS, making the data easier to work within your accounting or ERP system

Some accountants use AI tools but AI has still many limitations and questionable accuracy consistency, that’s why the majority will use OCR as operating it is easy. 

Step 4: Automate Receipt Data Import Into Your ERP/Accounting Software

Use OCR software to automatically transfer receipt data into your accounting system

Most of these systems accept CSV files, but some have a strict column format. You can also use a receipt converter that organizes the column format according to what is required. 

This is important because accountants will use accounting software to process everything and the OCR tool will bridge this manual-task gap of importing receipt data. 

Step 5: Archive Your Receipts

After importing the data to your ERP or accounting system, you will have to save everything to a secure cloud storage or hard drive. 

Archiving does not mean you are done with the receipts, they should not be deleted. 

These copies of receipts will be valuable during investigations when there are issues within the client or their company. This could be used as additional proof during tax season when the auditor will request supporting documents. 

Conclusion

Getting into automation might seem intimidating, but setting it up is relatively easy. All it takes is experimenting with tools to find the best fit for your accounts receivables team. 

Not one can be the direct solution to your problems, but it can be enough to deal with a step like digitizing paper receipts or importing information to your ERP system. 

No matter what people say about the drawbacks, the benefits of receipt automation so far exceed those of doing things manually. 

Automate Receipt Processing with DocuClipper

Once you already firmed everything and you are willing to take on receipt automation, it is time to try DocuClipper

Docuclipper is a receipt OCR tool that specializes in converting PDF receipts into CSV or XLS formats. This tool removes the gap of manually typing your receipt data into a spreadsheet or accounting software. 

This receipt scanning software can process hundreds of PDF files in just under a few minutes with a customizable column format that you can work around with. You can also use the receipt OCR API features so you can integrate it into your ERP systems easily. 

This tool goes beyond receipts, it can process also bank statements, brokerage statements, credit card statements, invoices, and tax forms. 

FAQs about Receipt Automation

Here are some frequently asked questions regarding recept automation

What is an automated receipt?

An automated receipt is a digital receipt processed using automation tools like OCR software. These tools extract, validate, and store receipt data with minimal manual effort, streamlining tasks like data entry and compliance while ensuring accuracy and efficiency for accounting professionals.

Can AI generate a receipt?

Yes, AI can generate receipts using specialized software. It creates digital receipts based on transaction data, ensuring accurate details like amounts, dates, and vendor information. This is commonly used in e-commerce, accounting systems, and automated invoicing tools.

Can a receipt be digital?

Yes, a receipt can be digital. Digital receipts are electronic versions of traditional paper receipts and are often sent via email or stored in apps. They are more convenient, eco-friendly, and easier to organize compared to paper receipts.

How to do an electronic receipt?

To create an electronic receipt, use accounting or point-of-sale software that generates digital receipts. Enter the transaction details, and the software will produce a receipt that can be emailed or saved as a PDF. This ensures accuracy and easy sharing with customers or clients.

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