By Cameron Cooper

The rise of digital receipts has relegated to history the image of clients handing over a shoebox full of traditional paper receipts to their accountants at tax time. Well, almost.

Heather Smith FCA, an accountant, educator and technology writer, says it is really only technophobes and some microbusinesses that are persisting with paper receipts for accounting purposes.

“I’m working with accountants and bookkeepers who want to modernise and they’re just not seeing shoeboxes anymore,” she says. “It’s an extraordinarily rare thing these days.”

In a world where digitalisation continues to reshape our daily activities, digital receipts are quickly superseding their paper counterparts. At the same time, they deliver a range of environmental benefits (see below).

However, some retailers and hospitality businesses are missing out on capturing customer details. They continue to issue paper receipts to customers, instead of sending digital receipts directly via email, SMS or banking apps. This prevents them from capturing customer contact details and shopping habit data so they would be able to engage customers in targeted marketing campaigns.

Client education opportunities

Debbie Kandauw CA, senior policy advocate – sustainability and business reform at CA ANZ, says this reluctance in some quarters to innovate presents a chance for savvy accounting firms to educate their clients about digital technology.

This could include information on digital receipts and e-invoicing, which has the potential to boost their clients’ profitability and streamline their reconciliation processes.

CA ANZ has run webinars on e-invoicing and hosted live demonstrations across different accounting software packages to illustrate how easy it is. Apart from eliminating the need for paper invoicing, the Pan-European Public Procurement On-Line (PEPPOL) framework that is used in Australia and New Zealand reduces the incidence of incorrect or missing inputs that can often occur with paper invoices.

Kandauw admits the adoption of e-invoicing in Australia is still quite low, as some businesses believe it is a way for government to keep tabs on income, or that it could incur additional costs. “However, accounting software such as Xero and MYOB already has the capability to do e-invoicing,” she says. “It’s as simple as switching it on.”

Smith agrees that accountants should consider deploying their technology specialists to inform clients about digital technologies. Why not hold an information session for clients, or provide tech tips through online marketing communications?

“Not all accountants are doing that,” Smith says. “It’s kind of like they’ve always done tax, so they sit back and focus on tax and that’s it. But for other accountants who are looking at the whole data picture, this is where they can help and make a difference for their clients.”

From an accounting point of view, Susan Tremlett FCA, chair of the Auckland CA ANZ Tax Special Interest Group, says digital innovations and software tools have clearly improved the efficiency and accuracy of accounts – for accountants and their clients.

“It’s just about educating clients to make sure that they do put receipts, invoices and other things in Xero because then it just makes everything so much easier,” says Tremlett, who adds that these systems also streamline GST reconciliation. “There’s no need to spend extra time calling the client or digging through boxes of receipts to try to work things out.”

This frees up accountants to do more value-added work for clients around forecasting, upcoming obligations, filings and payments.

Tremlett says even her retail sector clients are “absolutely digital all the way”. She expects AI innovations to further automate and digitalise accounting processes, but is confident that the role of accounting professionals will not be compromised.

“We’re still going to need the various different professionals to put a qualified lens on things, but certainly having to spend less time on data entry or basic analysis of bank statements is fabulous.”

Pros and cons

With digital receipts, it is widely accepted that they offer a range of benefits for firms and businesses, including:

• Improving convenience – they are easier to store and retrieve than paper receipts, and they do not fade over time
• Empowering marketing – they provide an easy way to grow customer email lists and gather customer data
• Delivering targeted content – they allow businesses to mine data and then provide content or services that are relevant to individual customers.

Smith says one obvious advantage for businesses that use digital receipts across all their operations is that they can automatically claim all tax expenses.

“You are putting everything through your books that needs to go through your books,” she says. “You’re not losing any receipts that are on the dashboard of the car, fading in the sun. What that means is your accounts and all your information is up to date and timely, so you’re able to make data-informed decisions.”

Digital receipts and other digital records can be easily accessed, archived and searched digitally, which saves time and reduces stress for business owners, while storage requirements can be slashed when paper records are scaled back or no longer required.

There are potential downsides to the digital format, if a business:

• Deletes emails and loses access to digital receipts
• Loses or replaces a phone and doesn’t have data backup systems.

Concerns about data privacy and security remains paramount, and robust encryption protocols and transparent data-handling practices are required to mitigate risks.

“You’re not losing any receipts that are on the dashboard of your car, fading in the sun... All your information is up to date and timely.”

Watch this space

The receipt space continues to evolve. Once it was innovative to send email receipts, but younger generations are increasingly shunning emails in favour of texts and apps.

“Everything is already on our mobile phones anyway, so it makes sense that the next step is digital receipts and that kind of stuff,” Kandauw says. She cautions, though, that items such as receipts have to be stored for many years as proof of purchase when it comes to tax returns.

While Kandauw says accountants can advise their clients on digital receipts and e-invoicing, she also encourages CA ANZ members working within business to be e-invoicing advocates. “Our members in business should be having those conversations internally to raise awareness,” she says.

For Tremlett, there is little nostalgia for the old days of receipts in shoeboxes. “My heart sinks when people give me paper files and boxes. But thankfully that’s on the way out.”

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The paper receipt toll

For all the business efficiencies of digital receipts, there may be an even more compelling reason to adopt the technology – saving the environment.

According to Green America, receipts in the US use 3.68 million trees and about 38 billion litres of water every year, while the production and disposal of receipt paper “emits the carbon equivalent of over 471,000 cars on the road”.

In Australia, UTS research indicates that producing receipts annually uses up 150,462 trees, 1.56 billion litres of water and 104.7 million kilowatts of energy, or enough to power 18,500 homes for a year. Alarmingly, most receipts are coated with a toxic industrial chemical called bisphenol A (BPA) that can harm people and the environment.

CA ANZ’s Debbie Kandauw CA says digital receipts and e-invoices offer a sustainable alternative by eliminating the need for paper. This also minimises the carbon footprint associated with printing and disposing of paper receipts, along with cutting paper transportation costs.

“So, it’s a huge cost saving for the environment as well,” she says.

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Tech tools

Tech guru Heather Smith FCA is well known as an accounting educator who produces the popular Accounting Apps podcast.

She is an advocate for tools such as Slyp. If retailers sign up for the service, it creates smart receipts that link customers’ receipts to their bank accounts and banking apps. Smith also recommends Weel, a platform which businesses can use to track and manage spending.

For example, if Smith purchases a product at a Slyp-enabled retailer using her Weel virtual card, Weel will automatically export a digital, tax-compliant receipt into her accounting software program.

“There’s no touching, no scanning or anything like that, so it just automates the whole process and frees me up.” With only about 2000 or so retailers using the service in Australia, Smith says there is great scope for expansion. She adds that there are also many receiptscanning solutions on the market, including Dext (formerly known as Receipt Bank), a phone app which simplifies expense tracking and minimises data entry for accountants, bookkeepers and businesses.

“Some of these tools are horizontal and suit everyone, but then you have the ones that are more nuanced and in-depth that can break out the line details in a lot more detail for accountants and businesses.”

Promisingly, a growing number of major retailers are offering apps that allow customers to go paperless and store receipts in those apps. Smith says the transition from paper to digital receipts represents one step towards a more sustainable and technologically advanced future. She has no doubt that innovators in the digital receipts and e-invoicing spaces will keep developing new and better solutions.

“What we really want to see is more relationships like Weel and Slyp have in place in that point-of-sale system, to automatically issue receipts to your phone. If it is taking you time to process a receipt, I’d encourage businesses to talk to a software developer and talk to peers, and work out ways to minimise and automate that process. It gives you great freedom and flexibility, and your clients will get on board with it.”

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