If you want a tax deduction, you better be ready to offer proof. People get screwed in tax courts around the country when they can’t substantiate a purchase years after your tax return has been filed.
The best way to prove to the IRS that you actually make a purchase is to keep that receipt, but nobody wants to keep those cheap, wilting pieces of paper around until the Statute of Limitations has expired. So I decided to go out to the app world to find the best receipt scanner would be to justify your tax expense.
For my first round, I’m focusing on the Android platform, since that’s my daily driver. If I can get my daughter to stop watching Doc McStuffins on the iPad long enough to evaluate iOS, I’ll give that a look at a later time.
I used a bit of a random method to find these apps (a few recommendations, but mostly based on ratings in the Play store). If there’s one I missed, let me know.
There are some “needs” and “wants” when it comes to any app. I really only have a handful of “needs,” though.
- It must store an image of the receipt somewhere secure and accessible for at least three years.
- Since I’m mainly addressing this to new, small businesses, it must be cheap or free
Anything beyond that is nice, but not necessary.
With that out of the way, here are the programs.
Microsoft Office Lens Android
This program works, and it’s free. Best of all, if you have a Windows Phone, it’s available to you.
If you want to use this app, though, be ready to do nearly everything manually. You take the picture on your phone, and you can make it upload to OneDrive or OneNote, but that’s about it. Heck, I couldn’t even figure out a way to make it save to a special “receipts” OneDrive folder.
If you just want a way to get receipts saved into the cloud, this will do it. If you want anything beyond that, you’ll have to look elsewhere.
This is, by far, the most full featured stand alone app that I tried. Take a picture and the OCR will do its best to convert it into text and save it in the relevant category. My testing showed that the OCR isn’t perfect (for example, it confused Krispy Kreme for Subway), but its as good as anything else I tried.
The receipt is automatically saved in their online system at numreceipt.com. You will have to create a log in to use the program. If you want to store your receipts elsewhere, you can also back it up to Dropbox with a push of a button.
Once the receipt is in there, you can do almost anything you want with it. Create multiple businesses. Categorize the receipt as business or personal. Breakout the individual purchases in the receipts to different categories. You can even break out sales tax if you want to try to deduct that (though you have to do it manually).
As an added bonus, the program lets you track business miles.
Once everything is in there, both the app and the web version create nice charts and graphs about your expenses. Not necessary for our purposes, but a nice feature.
The program is free with ads, but it’s limited. For example, I think you only have 200 mb of online space for free. I’m not sure what that translates to in terms of receipts it can hold, but it’ll likely cause a problem at some point. Upgrading costs $2.99 a month or $33 a year for the “Plus” plan, which seems reasonable, and comes with some other features that might be useful.
For a program that does it all, it has one big downside. The interface is a bit clunky. It’s not an insurmountable, and I was able to figure out where everything was in just a few minutes, but the programmers were clearly going for function over form.
This had a really high rating on the Play store, but it’s for the wrong reasons. This program is designed for individuals to put in their receipts, rate their experience, and earn “points” that turn into cash.
It may be a great program to earn a bit of cash for a little time, but it is not made for tracking expenses. Moving on.
I liked that this program had no log in requirement. At least at first. Then I realized it has nothing else we need, either.
If you’re looking to scan your receipts into expense reports, I think this’ll work. It allows you to take pictures, enter information, then export it into PDF. Which is great for some purposes, but not for what we’re looking for.
Receipts by Wave
When you open this app, it requires you to create a log in. Or, thankfully, you can sign in with Google or Yahoo. Nice touch. I hate creating and remembering new log ins.
The program then asks you to create a business. You can select “I don’t have one” if you want to use this for personal uses only.
One you get into the app, it about as simple as can be. Select “business” or “personal” through the hamburger menu, then press the + at the bottom to take a picture of a receipt. The receipt processes through the OCR, then asks you to verify the information.
That’s it. Everything after that is done from your computer at waveapps.com.
Clearly, the idea behind this is to get you roped into their other feature sets. Just by a brief glance through everything, it looks like you can get a pretty good set of programs for free. Like a simplified version of Quickbooks. But that’s a review for another time.
If you don’t mind using their online set, this is a great program, and a great option.
I was a bit hesitant to download this program, since I assumed it’d be more for creating expense reports than tracking receipts. And, unfortunately, I was right.
The program has a slick interface, and like the Receipts by Wave, it’s very much a set and done. Take the picture and put it through an OCR. Verify that the information is correct. Then you create a report that you export.
If you want to do anything else, it looks like the paid version can sync with Xero and Quickbooks. I didn’t look into any of that, though, since it wasn’t really what I wanted.
One other note: it does track mileage. Which would be nice is the other parts of the program did what I wanted them to do.
This app turned be off as soon as I saw the “Free for the first 14 days.” I tried it, though, just in case it was good enough to justify the hefty 14.99/mo price tag.
The interface is definitely slick. Again, take the picture, upload it, and the program takes care of the rest. It even has the added feature of breaking out the expense to various clients or projects, which could certainly be helpful depending on the business your running.
It’s a bit too rich for my blood, though. And I’m a little unsure where, exactly, the receipts go. And what happens if you cancel your subscription, do the receipts go away?
Probably not, but I’m not willing to pay $15 a month to find out when there’s other great options for small businesses.
While using the programs, I came away the most impressed with Wave, but I hesitate outright recommending it. You have to be willing to use their system for all your business needs for the program to work. Based on my initial impressions, it’s a pretty good system for a sole proprietorship, but I haven’t dug in enough to say for sure.
NumReceipts seemed like a bit more of the practical choice if you’re trying to mix and match your systems, but again, the interface is a bit clunky, and you probably should be prepared to pay if you have a lot of receipts.
Finally, if you really don’t have that many physical receipts, don’t over think it. Something like Office Lens or another automatic camera backup system will easily take care of the one-off receipt, which you can than manually stick in a file in the cloud if the IRS ever comes knocking.