What Are e Receipts And How Do They Benefit Businesses?

The case for moving away from paper receipts

Traditional paper receipts – which are either hand-written or printed from a cash register – were once the preferred way of confirming financial transactions, and remain popular among a section of businesses and consumers even in today's digital age. But with the rapid rise of online payments and the growing adoption of digital technologies, more and more businesses are replacing physical receipts and invoices with their electronic versions.

True, traditional versions printed on paper are simpler, more tangible, and at most times don't require the customer to share their personal information. But there are more factors working against them than in their favour.

Disadvantages of paper receipts

• Physical receipts are easily lost or damaged. Most people tend to throw them away or misplace them, and it is no different for companies.
• They take up a lot of space. We often see offices and factories with multiple shelves, cabinets, and even entire rooms dedicated to storing these records. However, many establishments operating out of small spaces do not have the physical space to stash months worth of paper slips. This is especially true for firms with predominantly remote and hybrid workforces.
• They contribute to waste and harm the environment. According to research by the non-profit Green America, an estimated three million trees and 10 billion gallons of water are lost to the production of paper slips each year and printing them contributes to about 300 million pounds of waste annually.
• There have been instances when printed receipts were found to be coated with harmful chemicals such as BPS, which is linked to cancer and reproductive issues.

Advantages of electronic receipts

In comparison, receipts in electronic form have the following advantages:

• They are stored digitally (in the cloud, on hard disks and devices, in apps, etc), doing away with the need for physical storage space. This makes it easier to file, organise, search for, and retrieve them. They are also less likely to be lost or damaged.
• They save on paper, ink, and the labour costs associated with producing paper receipts, making them a more cost-effective option for companies.
• They are environment-friendly (often referred to as green receipts) because they reduce paper consumption and pollution.
• They lower the risk of human error from manual data entry practices and are, therefore, more accurate.
• When integrated with your company's expense management system, e receipts help simplify reimbursements.
• Similarly, by integrating them with accounting systems, companies can automate their tax calculations, which reduces error and saves time. They are less likely to fall foul of tax laws.
• Electronic receipts are instantly accessible, which makes them useful not only to businesses but also customers, taxpayers, tax authorities, and auditors.
• Lastly, easy e receipts are also a powerful marketing tool. It is common practice for businesses to use them to collect a customer's email address and other personal information, which it then uses to engage with the person (for instance, by offering incentives and discounts).

Introduction to digital receipts

A receipt is confirmation that a purchase has been successfully made and paid for. It is an important document for both buyers and sellers. For businesses, it represents a sales record, showing that money has been received for goods or services purchased. Note that apart from serving as proof of payment, receipts are extremely essential for tax filing and compliance.

An e receipt is simply an electronic version of a printed receipt. Like a traditional receipt, it contains detailed information about a purchase that has been made, including:

• Name, address, and logo of the business
• Date of transaction
• Description of goods or services purchased/sold
• Quantity of goods or services
• Cost per item
• Total cost, including tax amount charged or discount availed, if any
• Currency in which the settlement is made
• Mode of payment used (such as credit card, bank transfer, mobile wallet, etc)

It can be further customised to include other relevant information such as special promotions and instructions on how the amount is to be paid.

Apart from purchases, companies also issue digital receipts for refunds.

Understanding e receipts

While paper receipts are printed out of cash registers or written by hand, receipts in electronic form are generated by point-of-sale systems and delivered to the customer in their preferred mode, such as via email or text message or as a QR code.

Digital receipts come in various forms – PDFs are very popular but they can also come in the form of plain text, HTML, and images. The flexibility e-receipts offer means that businesses can choose from a wide variety of e-receipts based on their storage capacity, data handling requirements, and accessibility conditions.

How does e receipt generation work?

Here's an example: a manufacturing company purchases raw material from a vendor, who sends the company a digital invoice. Once the invoice is paid, the vendor inputs the purchase and payment details into their receipt-generating software, which then issues a digital receipt and delivers it to the company. The process of generating and sending an e-receipt is typically automatic.

The technology behind issuing e receipts can vary. For example, email receipts use APIs that integrate with accounting software while QR code-based slips need to be scanned by a smartphone app.

The main advantage of using e-receipt technology is that it streamlines the transaction process in its entirety – right from the point of sale to storage and record-keeping. The software automates manual processes such as information processing and record-keeping, significantly reducing human error and increasing efficiency.

Furthermore, using e receipt generation software with data capture technology enhances expense management. Advanced algorithms sort business expenses listed in the receipts under relevant categories – such as travel spend, office supplies, raw material purchases, and so on – which makes it easier to search for, track, and manage spend.

How e receipts simplify tax deduction and filing

Digital receipts simplify tax deductions and tax filing in many ways.

First, while they are not mandatory under law, electronic invoices and receipts are universally accepted and recognised as reliable purchase records. Tax authorities also allow their use as documentation to support claims for tax credits and refunds.

Because they are stored digitally, e-receipts are easier to organise, search, and access. And as they are less likely to be lost or damaged, the risk of missing a tax deduction due to lack of documentation is significantly lowered.

Receipt-generating technology usually comes with in-built automated processes for data entry and calculations, so accounting teams can make error-free tax deductions in a fraction of the time that they would using a manual system.

With perfectly organised and up-to-date records at their fingertips, companies will find themselves prepared to face tax audits and be able to produce valid proof of business expenses whenever the authorities demand it.

Tax authorities, such as the Inland Revenue Authority of Singapore, are widely supportive of e-receipt initiatives and advise companies to keep proper records of receipts and invoices, warning that lapses could lead to rejected tax claims. Worse, they could even face penalties and financial mismanagement charges.

How to store e receipts and manage them

We store e receipts digitally, but where exactly is that?

There are many ways to save e receipts and invoices digitally. Some companies have a dedicated e mail folder to hold their receipts. Some buyers and sellers keep them in digital wallet apps. Both methods are convenient, but they might not offer the best accessibility.

A better option could be cloud storage. Many organisations upload their PDF receipts to the cloud as this is one of the safest and easiest ways to keep track of documents digitally.

You might also consider creating a digital spreadsheet using a tool like Excel. This is especially helpful if your company's focus is solely on keeping track of expenses.

Perhaps the most convenient storage solution is to integrate e receipts with digital accounting systems, especially invoicing and billing software and expense management software. Digital accounting systems are an end-to-end solution to the challenge of storing, organising, managing, and tracking financial records.

For companies that use both e receipts and printed receipts, it is advisable to take screenshots of the latter or scan them in order to create digital versions for safe-keeping.

Benefits of e receipts for customers

Businesses have much to benefit from the use of e receipts, including lower administrative costs, efficient record-keeping, and environmental awareness. They are particularly essential for customer engagement as they bring the following advantages:

• Unlike their printed versions, e-receipts can be sent instantly and directly to customers.
• The person receiving the document can access it anywhere (on any device) and anytime (even as soon as it has been sent). This makes it easier for them to manage even large volumes of it.
• Electronic receipts are generated using automated processes, making them more accurate, up-to-date, and free of the errors and typos common with paper versions.
• Digital receipts aren't easily misplaced or stolen. And thanks to advanced security, privacy, and encryption technologies, they are considered far more secure and tamper-proof than paper-based slips.
• Customers appreciate the ease with which they can receive, access, retrieve, track, and save their e receipts.
• Similarly, taxpayers can use them conveniently to support their tax deductions and claims for refunds and credits.
• Apart from recording a transaction, an e receipt can provide additional value to a consumer by carrying personalised and customised details about promotions and discounts.

Easy e receipt management with Aspire expense management

No more missing receipts! With Aspire's expense management platform, companies can take their e receipt initiative to the next level. Our spend management solution keeps all your company's expenses and supporting documents in an easily accessible and secure central depository.

With it, you can also automate all receipt requests and syncs card payments and employee claims.

That's not all. It simplifies and streamlines reimbursements – employees simply need to scan their receipts via the Aspire app and can submit their claims within seconds.

This expense management platform is best utilised when paired with other Aspire products, such as our powerful multi-currency business account, which comes with unlimited virtual corporate cards for all your employees and super fast global payments at market-leading rates.

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