About a 18 months ago, I raved about Shoeboxed. We have since used it successfully for catch-up jobs where we had to work through a couple of years of receipts, especially when no bank reconciliation was possible.
But what had been elusive to me was how to use it on a day-to-day basis. The main reason is that it means losing the power of the bank rules in Xero. Even though, there are 4 useful scenarios:
- Receipts that are paid with personal money
- Unpaid invoices (if they are not due for a while)
- Data storage
- Contact details from business cards
Receipts Paid with Personal Money
Naturally it is best to pay every business expense through a business bank account or credit card. But we all know that this is not always possible. Xero Touch is great for the occasional receipt, but you still have to enter all the data yourself.
The equivalent Shoeboxed app lets you take a picture and extracts all the data from the receipt. And if you have a bunch of them, you can just post them and they will even scan all of them.
The only thing you need to do manually is select which account an expense belongs to (only once for each supplier, it is then saved as a rule and will happen automatically) and push it into Xero.
Anyone using Xero to bulk pay invoices needs to enter them. Shoeboxed automates that. The only drawback is that no due dates are captured and no bank account details. But if you get invoices from the same suppliers where you have the payments details already in Xero it can help to streamline your processes.
I am hoping that they keep adding the Due Date as a piece of data that they will extract, so if you want to use that function, let Shoeboxed know. The more they hear it, the more likely they are to implement it.
Another option is to just use it for storage of your business paperwork. Shoeboxed is fully ATO compliant and will definitely speed up the process of finding specific receipts if you ever have an ATO audit.
In this scenario, there is no need to categorise your receipts and invoices, nor to push them into Xero. You just put everything in and forget the paper files.
Contact Details from Business Cards
I had a drawer full of business cards and wasted so much time going through them to find someone. Then I posted them all to Shoeboxed and now all these contact details are in my Google contact and I can actually find a contact easily.
Shoeboxed – Step by Step
The following process explains how to use Shoeboxed with Xero. It assumes that Shoeboxed is already connected to Xero (something we do for our clients).
The explanations are specifically for when you send an envelope in, but if you email them in or use the app, it is very similar.
1) Prepare Scanned Receipts
Go to the receipts section and filter what you see by choosing the Uncategorised Receipts in Categories and possibly specific envelopes in Envelopes.
Next show enough items on the same page, so that all the receipts you want to work with show on one page.
Lastly, sort by vendor by clicking on the “Vendor” heading to speed up the categorisation in the next step.
2) Categorise New Suppliers
You can tick all suppliers that you want to categorise into the same category, but it is more useful to select all receipts for one supplier only and then add them to a category. It speeds up the next step.
3) Automate the Categorisation
The power of Shoeboxed really comes to the forth when most of your suppliers are categorised and automatically receive the correct category without you having to do anything.
If you choose just one supplier in step 2, you will get the option to save a rule.
Please note that sometimes it might not be useful to automate “categorise a supplier” if you purchase a wide variety of things that do not belong under the same expense category.
4) Mark for Export
Select all receipts you want to export to Xero. If you use Shoeboxed for unpaid invoices and receipts paid with personal money, it might be useful to do that in two separate batches, so that you can distinguish them better in Xero.
After selecting what you want to export, choose Export Receipts under Choose Action.
5) Prepare Export
On the next page you can select where to export the receipts to. In Additional Settings, it might be useful to choose “Don’t export receipts that have been exported to Xero”, unless you know for certain that you have deleted them in Xero.
We recommend using the “Verify & Send to Xero” button, as this gives you the option to review the totals and GST amounts.
6) Run Export
It is possible to change the totals, GST amounts and expense categories in this step. To help with that process, you can hover over the icons at the right to see more detailed data. Once have reviewed everything, run the export.
Your receipts arrive in Xero within seconds.
7) Receipts in Xero
Receipts arrive in Xero as draft invoices (unless you have selected the other option before). When you click into one, you’ll see a link to the original scan of the receipt or invoice.
For the receipts that you have paid with personal money (provided you are the business owner), you want to pay them off from a Drawings Account. You can either do that for individual receipts or with a bulk payment once a month.
Over to You
I’d love to hear more ways of how you are using Shoeboxed to reduce the time you spend on bookkeeping.