How to Keep Track of Receipts

  • October 10, 2024
  • George Mahoney

In 2024, keeping receipts is more critical than ever for businesses. Effective receipt management ensures accuracy, tax compliance, and valuable financial insights. With manual methods prone to errors, many businesses are turning to automated, AI-powered solutions that save time and reduce mistakes.

Stricter IRS regulations make it essential for U.S. companies to maintain organized records to avoid penalties. Automated systems offer real-time tracking, simplifying audits and helping businesses optimize their budgets. This guide explores the best methods and tools for modern receipt tracking to keep your business efficient and compliant.

cash register, printer, receipt

The Basics

Why Tracking Receipts Matters

Tracking receipts is crucial for legal, tax, and operational reasons. It ensures compliance with IRS requirements, maintains financial accuracy, and provides insights into spending patterns. Well-organized receipts are essential for tax deductions and audits, helping businesses stay efficient and prepared.

Key Methods: Manual vs. Automated Tracking

  • Manual Tracking: Involves physically storing receipts and entering data into spreadsheets. This method is time-consuming and prone to errors.
  • Automated Tracking: Modern tools like Clyr use AI to capture, categorize, and store receipts in real-time. This saves time, reduces errors, and ensures compliance with tax regulations​​.

Common Mistakes

  • Failing to keep all receipts, including small ones
  • Delaying organization increases the risk of lost receipts
  • Relying solely on paper receipts, which are easily misplaced
  • Incorrectly categorizing expenses, leading to inaccurate reports

Using automated systems helps avoid these issues and keeps your records organized and audit-ready.

desk, work, business

How to Keep Track of Business Receipts (Small & Large Businesses)

For Small Businesses

Tracking receipts is crucial for tax compliance and maximizing deductions. For sole proprietors and small teams, keeping detailed records ensures you can claim every allowable expense and avoid IRS issues.

Simplified tools like mobile apps and cloud-based storage make this easier. Solutions such as Clyr’s real-time receipt capture allow users to submit receipts via SMS or email, automatically categorizing and storing them for future reference​​.

For Larger Businesses

Due to higher transaction volumes, larger businesses need more robust systems. Integrating receipt management with accounting platforms like QuickBooks or ERP systems streamlines the process, ensuring receipts are automatically matched and categorized.

Automation reduces manual entry errors and saves time across multiple departments. Advanced solutions, like those offered by Clyr, can handle large-scale operations, providing real-time insights and compliance across various teams​​.

How to Keep Track of Receipts for Taxes

IRS Guidelines for Keeping and Organizing Receipts

The IRS requires businesses to keep receipts documenting deductible expenses. These records should include the date, amount, and purpose of the expense. Organizing receipts by category—such as office supplies, meals, or travel—ensures easy access during tax preparation or audits.

Types of Receipts You Need to Keep

Receipts for tax-deductible expenses are crucial, including those for:

  • Gas and vehicle expenses for business use
  • Travel expenses (airfare, lodging, meals)
  • Office supplies and equipment
  • Client-related meals and entertainment

Preparing Receipts for Tax Audits

Receipts must clearly show the expense’s business purpose in the event of an audit. A detailed and organized digital log helps ensure you have all the necessary documentation ready for review. Aim to store both the receipt and any relevant notes or explanations.

Ensuring Compliance with IRS Standards

Using digital systems to scan and store receipts keeps them organized and easily accessible. These tools also help track expenses in real-time, ensuring compliance with IRS requirements by providing clear, timestamped records for all transactions.

receipt, money, groceries

Keeping Track of HSA Receipts

Why HSA Receipts Are Important for Tax-Free Reimbursements

Health Savings Account (HSA) receipts are essential for proving that your medical expenses qualify for tax-free reimbursement. The IRS requires detailed records for each transaction to confirm that the funds were used for eligible healthcare expenses.

Best Ways to Store and Organize HSA-Related Receipts

Organizing HSA receipts ensures you’re ready for tax filing or an audit. Keep both digital and physical copies in a clearly labeled system. Consider storing them by date or category, such as prescriptions, doctor visits, or medical equipment. This organization simplifies retrieval when needed.

Tools and Techniques for HSA Compliance

To stay compliant with HSA regulations, use digital tools that allow easy scanning and categorization of receipts. Ensure that each record includes the expense’s date, amount, and purpose. Automating this process reduces the chance of misplacing important documentation. It helps maintain up-to-date records in case of an IRS review.

How to Keep Track of Receipts Using Excel

Step-by-Step Guide on Using Excel for Receipt Tracking

  1. Create a New Spreadsheet: Start with columns for Date, Amount, Vendor, Expense Category, and Receipt Link.
  2. Enter Data: Input receipt details manually as you collect them. Attach digital copies by inserting links to scanned receipts stored in the cloud.
  3. Categorize Expenses: Use consistent categories like office supplies, travel, and meals for easy sorting and tax preparation.

Templates and Formulas to Automate the Process

  • Expense Categorization: Use a dropdown list to select expense categories, making data entry faster.
  • Linking Receipts: Store receipts in a cloud service (e.g., Google Drive) and hyperlink them in the spreadsheet for quick access.
  • Summing Totals: Use Excel formulas like SUMIF to automatically total expenses by category, date, or project.

Limitations of Excel

While Excel is useful for simple tracking, it becomes inefficient as your business grows. Manually entering and categorizing receipts is time-consuming and prone to errors. Excel also lacks real-time tracking and automated receipt matching, making it a limited tool for businesses handling larger volumes of receipts. At this point, upgrading to a more automated, dedicated receipt management system is advisable.

calculator, calculation, insurance

Using Accounting Software: How to Keep Track of Receipts in QuickBooks

Overview of QuickBooks’ Receipt Tracking Capabilities

QuickBooks offers powerful tools for receipt tracking. It allows businesses to scan, organize, and attach receipts directly to transactions. Its built-in receipt management features simplify the process, ensuring all financial records are stored in one place and easily accessible for audits or tax filing.

How to Scan, Categorize, and Attach Receipts to Transactions

  1. Scan Receipts: Use the QuickBooks mobile app to snap a photo of your receipt or upload it from your computer.
  2. Categorize Receipts: QuickBooks will try to match the receipt to an existing transaction or allow you to categorize it manually. You can assign categories like office supplies and meals or travel to each receipt.
  3. Attach to Transactions: Once scanned, receipts can be linked directly to the corresponding transaction in your accounting system, ensuring everything is properly documented.

Automating Receipt Tracking in QuickBooks

QuickBooks automates much of the receipt tracking process by auto-matching receipts to transactions based on dates, amounts, and vendors. This reduces the need for manual data entry and minimizes errors. Additionally, recurring expenses can be automatically categorized, saving time and effort.

Automating the Process: The Future of Receipt Tracking in 2025

Benefits of Automation

Automating receipt tracking offers significant advantages:

  • Time Savings: Automation streamlines the entire process by eliminating manual entry, allowing businesses to focus on higher-level tasks.
  • Error Reduction: Automated systems minimize human errors like miscategorization or lost receipts, ensuring accurate financial records.
  • Compliance: Automation ensures receipts are stored and categorized correctly, making audits and tax preparation much smoother.

AI-Driven Receipt Management

AI-powered platforms are transforming how businesses handle receipts. These tools automatically capture receipt details through scanning, categorize expenses based on pre-set rules, and store them securely in real time. This removes manual sorting and provides instant access to records whenever needed.

Proactive Reminders for Missing Receipts

Automated systems often include reminders for missing receipts or incomplete expenses. These reminders can be sent to employees via email or SMS, helping ensure all receipts are submitted promptly and preventing gaps in financial records.

Multi-Platform Integrations

The future of receipt tracking is seamless integration across various platforms—accounting software, ERP systems, and CRM tools. This connectivity allows receipt data to flow automatically between systems, eliminating redundant data entry and ensuring that financial workflows are fully optimized.

receipts, receipt, pay

Industry-Specific Tips for Keeping Track of Receipts

How to Keep Track of Gas Receipts

For businesses with mobile teams or vehicle expenses, tracking gas receipts is crucial for claiming deductions or reimbursements. Ensure that every receipt includes the date, location, and amount. Use digital tools to capture receipts on the go and categorize them under travel or vehicle expenses. Keeping detailed mileage logs alongside gas receipts can further support your deductions during tax season.

How to Keep Track of Receipts for Tax-Deductible Expenses

To maximize deductions, businesses should carefully track common tax-deductible expenses, including office supplies, meals, travel, and charitable contributions. Organize these receipts by category and ensure each includes a clear description of the business purpose. A digital solution helps ensure that all deductible expenses are captured, stored, and ready for tax filing, reducing the risk of missed deductions or compliance issues.

Best Practices: How to Keep Track of Expense Receipts for Maximum Efficiency

Scanning vs. Manual Entry: Why Scanning Is Faster and More Accurate

Scanning receipts is significantly faster and more accurate than manual entry. Businesses can instantly capture receipts using a mobile app or scanner, reducing the risk of data entry errors. Scanned receipts are also easier to organize and store, ensuring you never lose important documentation.

Cloud Storage Options

Storing receipts in the cloud ensures they are safe, accessible, and backed up. Popular options like Dropbox and Google Drive provide easy access and sharing features, while dedicated receipt management platforms, like Clyr, offer advanced categorization and reporting tools. Cloud storage eliminates physical copies and ensures receipts are available whenever needed.

How to Organize and Categorize Receipts

Receipts should be organized by vendor, date, and category (e.g., travel office supplies) for better visibility and reporting. This system simplifies audits, tax filings, and financial reporting. Regularly updating and categorizing receipts ensures that your records are always accurate and easily searchable, saving time and effort in the long run.

Conclusion

Efficient receipt tracking is essential for accuracy, compliance, and streamlined financial management. Manual methods need to be updated, which leads to errors and inefficiencies. Businesses can ensure real-time receipt capture, organization, and reporting by upgrading to digital and automated solutions.

George Mahoney
Chief Financial Officer, SMB Finance Expert

George Mahoney is a seasoned expert with extensive experience in financial management for field services, construction, and real estate companies. Known for his strategic financial planning and expertise in optimizing operational efficiencies, George has consistently driven profitability throughout his career.