What are receipt scanning apps and how can you use them?

A receipt-scanning app allows you to scan and digitally save receipts and other important documents. These digital tools use optical character recognition (OCR) to convert and save paper documents into a digital format. Once you have your documents digitized, you can use the data for your own purposes. For example, you can use receipt-scanning apps to help you track your expenses, manage your budget and earn rewards for your purchases.

If you want to take advantage of receipt-scanning apps, it helps to get familiar with how these apps work and about some of the best receipt-scanning apps for both personal and business use.

How receipt-scanning apps work

While receipt-scanning apps vary in how they function and their setup process, there are some general steps you’ll need to follow to begin using them:

1. Download the app: Go to your device’s app store and download the app to your mobile device. Most apps are available for iOS and Android. Many apps have a free plan and subscription plans that include additional features for a fee.
2. Create and set up your account: Follow the app’s instructions for setting up your account. This might include creating a password and linking the app to your bank account or digital wallet.
3. Scan receipts: For most apps, scanning a receipt is as simple as taking a photo. You’ll need to give the app access to your device’s camera so that you can snap a photo of the receipt and store it on the app. The app extracts key data from the receipt, such as purchased items, store information, date and total amount.
4. Retrieve and organize your digital data: The app will store your scanned documents, allowing you to search and categorize them using filters or keywords.

Common uses for receipt-scanning apps

Apps for scanning receipts are helpful for a range of activities. Here are some of the most common types of apps.

Expense tracking

Scan and store your receipts digitally to eliminate the clutter of paper receipts. Receipt-scanning apps make quickly organizing and retrieving purchase information easier for expense tracking.

This can be particularly useful for creating and maintaining a budget. Once you’ve categorized your expenses, you can analyze your spending habits and identify areas where you can cut back.

Expensify has many features that make it one of the best receipt-scanning apps for individuals, freelancers and small businesses. The app allows users to scan receipts, track expenses, generate expense reports, reimburse employees and send invoices.

The app integrates with over 45 accounting tools, like QuickBooks, NetSuite and Gusto. Expensify is free to use as an individual for up to 25 monthly scans. For companies, plans start at $5 per user per month on an annual subscription.

Tax preparation

Filing taxes is a chore many people dread because of the amount of recordkeeping involved. Fortunately, receipt-scanning apps make the process easier by providing a reliable way to keep the tax records the IRS and other tax agencies require.

Storing digital copies of your records can be safer than relying on paper documents, which can easily be lost or destroyed. You can also use your digital records to generate reports that help you prepare your tax filings.

Shoeboxed is a receipt-scanning app used by over one million businesses. It automatically extracts data from your receipts to create expense reports, financial statements and tax preparation documents. The app creates digital images that the IRS and Canada Revenue Service will accept if you undergo an audit.

Shoeboxed automatically categorizes your data into 15 tax categories and allows you to add your tax professional to your account to help generate tax reports.

Employee reimbursements

Companies use receipt-scanning apps to track employee spending and reimbursements. Employees can quickly scan and upload their receipts directly to the app, where their company’s accounting department can then easily access them. Many apps integrate seamlessly with accounting software and tools.

QuickBooks’ receipt-scanning app is a good example of this. The app scans receipts, extracts information and integrates the data automatically with your QuickBooks Online account. You can then use the data to create a variety of reports within QuickBooks, such as expense reports needed for reimbursements.

To use the QuickBooks receipt scanner, you’ll need to pay for a QuickBooks Online account. The regular price for the lowest-priced plan — the “EasyStart” — is $24 a month, although the company sometimes offers promotions for up to 75 percent off.

If you don’t need all the features of a QuickBooks Online account, you might consider saving money with another receipt-scanning app, Zoho Expense. The app has a free plan — ideal for freelancers and small businesses — and paid plans starting at $4 per user per month billed annually (minimum three users).

Earning cash-back rewards 

Some receipt-scanning apps offer you cash back and other rewards for purchases. In exchange for using the app to scan and submit your receipts, you’ll earn cash, points you can redeem for gift cards or other rewards like discounts, coupons or entry into a sweepstakes drawing.

These cash-back apps are typically free for you to download and use. The apps make their money by promoting specific products, brands and retailers. Some also earn money from advertisements and selling users’ shopping data to market research companies. They then share their commission with users in the form of cash back.

Many apps accept receipts from a wide range of retailers. Depending on the app, you might earn cash back from grocery stores, gas stations, restaurants, department stores and convenience stores. You can earn cash back from both in-store and online shopping. And it’s not just everyday purchases that earn rewards. Some apps offer cash back on big-ticket items like flights, hotel stays, car rentals and vacation packages.

Here are some of the best receipt-scanning apps for receiving cash back:

• Ibotta is best known for its cash back on groceries and retail purchases. You’ll need to select your offers from the app before you make your purchase and scan your receipt. Ibotta reports that its average user earns $256 a year in cash back.
• Fetch is simple to use and doesn’t require you to select your offers before submitting your receipts. Your receipts earn points, which you can redeem for gift cards to popular retailers like Amazon, Target and Nike.
• CoinOut allows you to submit receipts from almost any in-store or online purchase and earn “Coins,” which you can redeem for gift cards. You can earn additional Coins by completing simple tasks like snapping photos of product barcodes while you’re shopping.

Pros and cons of receipt-scanning apps

Receipt-scanning apps offer several advantages, but it’s also important to be aware of the downsides of relying on digitized receipts. Here’s a look at the pros and cons of scanning your receipts.

Next steps

Whether you’re an individual or a business owner, using a receipt-scanning app can be a good first step in organizing your finances. These apps help you reduce paper clutter and provide easy access to the data you need for expense tracking, reporting and tax preparation.

Your next step might be to take advantage of other tools that help you manage your personal finances. For example, you might want to learn about the nine best apps for saving money. If you’re looking to increase your income, you’ll find some great opportunities with these 10 best money-making apps. If you’re a gig worker, you might want to find out which finance apps can help you maximize your income and find more work.