Update: Learn more about this topic from out blog post titled 12 Reasons Why Evernote is THE Choice for Tax Management and Financial Organization for the Self-Employed.
Ready to lose the shoeboxes and folders of receipts that typically come with expense management, bookkeeping and taxes? It's time to take your taxes paperless. This webinar presents the skills and structure you need to save hours and hours of time tracking expenses, not only at tax time, but all year long.
Evernote Business Certified Consultants Stacey Harmon and Kristi Willis show you how to use Evernote to digitize and centralize all your receipts, and present workflows for managing your bookkeeping with Evernote.
Original Air Date: September 2014
Platform Demo: iOS and Mac Desktop
[7:45] Getting receipts into Evernote
[17:50] Case Study: Kristi's Receipt and Expense Management
[22:18] Paying Employee Expenses with Expensify
[27:01] Case Study: Stacey's Receipt and Expense Management
[44:48] Case Study: Client example
[Stacey] Welcome to this edition of the Get Untethered hangouts! Thank you for joining us, hello from Houston today and Kristi as you can see is still in Austin. We’re going to be talking about expense and receipt management in Evernote. This is a great topic that proved to be a huge time and effort savings; great efficiencies gained by moving this process into Evernote. Kristi and I differ in how we do this and we’re going to demo and actually show you our system in great detail as we go through here.
First of all, I know my picture maybe a little bit grainy I’m on a friend’s network on in a darker room with the thunder and lightning storm going on outside so we're keeping our fingers crossed that this is all going to work out really easily and well. Let me introduce myself, I’m Stacey Harmon and this is my co-author Kristi Willis and we are the authors of Untethered with Evernote. We’re also Evernote Ambassadors and Evernote business certified consultants. We love Evernote and it's central to what we do both professionally and personally. This is a monthly hangout where we are expanding on some of the concepts that we talk about in our book.
We clearly cover expense and receipt management in the book; this hangouts designed to you go into more detail about that. Don’t forget that you can watch these on demand on our YouTube channel, where you can find all of our past hangouts as well. Today obviously we're talking about managing receipts and expenses, which is covered in Chapter 4: Smooth Operations.
[Kristi] Hi Stacey, and hello Andrew, thanks for checking in with us on the Q&A window; well I have a little bit of a mess behind me but that’s getting organized. I’ve taken it upon myself to organize all of our family photos and documents, so we’re in mid-sorting process.
I'll tell you I really have the process that changed my world. I’ve been using Evernote for years before this really became a big thing for me. When I went out on my own five years ago and started my own business I had no idea what a big deal receipts were going to become in my world. This is the process that was really kind of changing for me because I cannot stand little pieces of paper a I tend to lose them. So Evernote has really transformed this for me. There is just a small smattering of the receipts that I get and particularly as somebody who works with food, I have all kinds of grocery receipts; we're working on a cookbook right now and so lots of recipe testing going on. It is really easy for this to get out of control for me. I have a weekly process where I get the receipts into Evernote and I think that's the single most important thing that it was just get the receipts into Evernote, and then having a process from there really helps.
7:50 There are a lot of different ways you can get the receipts into Evernote. I’m going to cover just a couple of those. One of my favorite ways to get at receipts and Evernote particularly when I'm traveling, I don't have to carry the receipts with me, is to photograph them. I use the document camera on Evernote. If you want more advanced photographing there are different Scanning Apps for both Android and iPhone that you can use as well. For my purposes the Evernote document camera has always worked great. It puts us in a scannable text, so and searchable text, and so I’m be able to find the item whether I search for Office Depot or whether I search for the date I'll be able to find it that way.
This has been a really great to just get it in there on the fly. Stacey has taught me to take the photos in the hotel room in the morning as a great best practice. The other way to get receipt in is I will scan them. I have been known to have a little scanning party on Friday nights with a take-out pizza and maybe some wine. I cannot recommend enough having a great scanner.
9:10 - I currently am using a Fujitsu ScanSnap that Fujitsu was kind enough to give me to test as an ambassador. It’s the one on the right. If I’m going to be gone for a long period of time I can take it with me because it's so small. What I covet is the big Evernote ScanSnap specifically designed for Evernote; if you haven't seen the video of this, go on the Evernote site and watch it. This is coming to KW Solutions Group this year… this is my one big “I have to purchase” for the year because you can just throw our receipts into it, hit scan, and it learns where you store your receipts. Its beautiful it makes me cry little bit. There are other scanners, too. Stacey has a Canon that she really likes. Look for a scanner that is specifically designed to get things into Evernote because I think you'll find that cuts stuff out of the process and makes life much easier.
10:25 - Another way that I get the receipts into Evernote is that I email them. With your Evernote account, you have a unique email address that I have saved to my Contacts- brilliantly calling it Evernote- and when I get a receipt in my email I can just forward it to Evernote. By default any email that you forward to Evernote goes to you default notebook but you can specify a notebook if you use the “@” symbol in the subject, then specify the notebook name.
For example I've had all receipts that need to be reconciled with our accounting system in a “.Receipts to Reconcile Notebook. You can also add a tag if you know it. For example, I used the expense utilities tag because this was the WiFi on a trip. I could even add a reminder if I’d like, using the exclamation symbol. This is one great way that you can add things; I will admit that when I'm being lazy or I don't know the name of the notebook I will just forward it to Evernote and let it go in my inbox and then I process my inbox regularly. You also can set up something called auto-filing in your Evernote preferences. When you do that, when you email receipts to Evernote, it will find similar types of documents and put them in the notebook for you. I would be afraid that if turned on auto-filing that they would go to the end notebook, the reference notebook, not the inbox.
[Stacey] Kristi, before you move on, I want to answer a common question that I get when I talk about this auto filing with the subject line, notebook and tag. One of the things to keep in mind is that you have to be very specific and know the exact name at the notebook or tag that you want to auto file. One of the questions is, is if I spell that wrong or don’t have it, what happens? It will default to your default Inbox. The note still gets created, but just goes to your default Evernote inbox.
14:00 - [Kristi] Absolutely. So because the syntax can be a little challenging to remember, another great way to get email receipts into Evernote is if depending on the email tool you’re using, you can clip them into Evernote. I use Google Chrome and Gmail and I’ve got the Evernote Webclipper right there, and while I’m in my email, I can just click the Web Clipper, it recognizes it's an email and it clips it appropriately. What I love about the clipper is it makes it easy for me to pick the right notebook and the tag because it helps me fill that in.
I have also and I didn't put in here, but I've also started using Boxer, which on my iPhone, which is an email app that will let you send things directly to Evernote, and that has been really great, because again I can add it directly to the correct notebook.
You know John, it is difficult to remember the syntax for the subject line. I do pretty well to remember that it's @notebooks. For me, it’s easiest to remember that it goes to this place, so @ is the location for me. The pound sign for the tag is harder for me, but I just think of it as a hashtag, which is like a keyword, which is a tag. If you remember @ is the place, and the pound sign is the hashtag or the tag and so that has helped me a little bit with that. I will admit that it is, as I have started using Evernote more and more and I have more notebooks and more tags, it is harder for me to remember.
Using the clipper or putting it in my inbox so I can process it later has been a little bit easier to than remembering the syntax.
[Stacey] It also goes back to remembering the pound sign and the @ symbol, and for me, just like Kristi, I remember the hashtag is a pound symbol, just like a tag. But your notebook naming conventions should be simple, too, especially if you’re forwarding often. For example Receipts, or Incoming Receipts.
16:08 - [Kristi] The other way to get receipts into Evernote is through digital retrievers. Stacey is going to talk more about FileThis, but FileThis will allow you to connect a Credit card, a utility, all different kinds of statements to Evernote and it will collect them for you and put them in your Evernote system. If This, Than That, or IFTT and Zapier will allow you to collect receipts as well depending on your system. For example I have added a screenshot that will allow you to you create a recipe to uploade receipts that match a certain criteria to Evernote. Ranny brought up a great point I just loaded iOS 8 but for all you iPhone users, when you upgrade, you can now clip directly into Evernote which is wonderful!
The key is just get the receipt into Evernote. That is the first step; I’ll talk you a little bit through our process, I don’t work with a CPA like Stacey does so I have a little bit simpler process than she does. I will just walk you through what we do. My job is to get the receipt into Evernote, once that happens, I make sure that all those receipts are in a receipts to reconcile notebook.
[Stacey] Do you see that question there about why you put a “.” Before your Receipts to Reconcile folder?
[Kristi] Great question, Catherine, the reason I did is that your netbook naming is going to appear in alphabetical order and because I want the receipts to appear at the top of my financial notebook, which you'll see an example of that stack, I just added a dot so I can still call it receipts, but have it appear at the top of my list. Adding a symbol forces a sort order.
19:20 - As part of Lillian’s regular processes, she goes in, finds receipts in the notebook, and goes through a reconciling process with our accounting software, FreshBooks. You could use anything but we use FreshBooks. Lillian goes in and cross-references the expenses with FreshBooks. Things from the business checking account are auto-loaded into FreshBooks, if I pay cash or a personal credit card, Lillian would add that into FreshBooks. She then categorizes it in FreshBooks with the categories that we have agreed-upon. Then in Evernote, she tags that item with that same category so if I go back and I wanna say show me all the notes in Evernote that are promotional I can pull that in Evernote using that tag and I would be able to search in FreshBooks for things that have the promotional category and double check those.
We use the tagging system to be able to do that. Once it has been tagged in Evernote and entered in FreshBooks and categorized, Lillian then moves it from Receipts to reconcile into you a notebook for that year. Each year has its own set of receipts, and everything goes into that notebook. You can see that this screenshot is after I had a scanning party. This is little snapshot of my finances stack, so you can Receipts to Reconclie appears at the top. As we move things out of there, they go into the year’s notebook.
There are a couple other pieces to my receipts process. When I travel for clients, I need to bill those expenses to them. So I add the “billable to client” tag so that I can keep up that I did charge this back to someone. When they get entered into FreshBooks, a copy of that receipt gets added and appears in the client’s invoice. Until I send an invoice it shows up as billable, and then once it gets paid it shows up as recouped. I'm able to track, so if I wanted to say okay what was the thing that was billed to client today get paid back I can see that in my system.
22:30 - The third place that we’re using Evernote and receipts is about paying employee expenses. Lillian incurs expenses when she has mileage, when she's recipe testing for the blog or the cookbook and what we decided is that we're going to track those in Expensify. Expensify is a great, free tool, that you can use to track expenses. I love that you can figure out your mileage and it allows you to attach receipts, all kinds of stuff. Lillian can go in and track her expenses there. Then she can submit an expense report to me and I get an email that there's a new report, I can approve it, and then it electronically pays her.
Then I can export that expense report to Evernote, so that it is stored with everything else that I need. Those get added to an Expensify notebook in Evernote, then I have a list. I can go in and be able to look back at what are the expense reports that I’ve paid for Lillian and this will all be in that Expensify notebook. Once I process that, I will add that to the 2014 Expenses because that's part of what we had for this year’s expenses.
Everything by the end of the year is in that 2014 Notebook. If I needed to produce receipts for anything as long as its for this year I'll be able to find it in there. It is being tagged with the category, cross reference with FreshBooks, and so everything I need is in there. I’ve actually gotten rid of my filing cabinet in the last few months because everything is Evernote! Using all of these tools has gotten rid of the little scraps of paper.
[Stacey] I want to make a couple of points, there’s a couple underlying assumptions that we want to just articulate. Number one is obviously Lillian and Kristi’s case has access through a shared notebook to these. We’re sharing notebooks with team members, which is one of those core skills that I assume everyone picked up on. Also, moving notes around is a key part of Kristi’s process, and a key part of my process as well. In that first hangout we did, strategies for organizing your notes with Evernote, we cover several of the ways to make that kind of thing happen quickly because you may feel overwhelmed by the movement and the talking about what Kristi and I are laying out in terms of our process, but in reality, Evernote makes it so easy to move and transfer data around through key commands, through multiple ways to drag and drop notes and notebooks that it's really not overhead its efficiency.
[Kristi] Gary has a good question. Do I break my notebook down by month? I don’t, the reason why is that it would just be too many notebooks for me. What I do do, I didn’t show a great example of that, is I put the date of the expense in the name of the note. So that if I am searching for everything from October, I can put in a search string that will return just to October notes. So I actually use a naming convention and I know Stacey is going to talk more about naming conventions.
27: 45 - [Stacey] One of the key ways that Kristi and I differ is that I’m actually outsourcing the data entry to a bookkeeper with my system. It gets a little more complex, but we wanted to introduce you to that in case that is your scenario as well. I want to give you some background on how I designed my process. It started with me sitting here saying, “How am I going to track the status?” The reality is that I’m designing a receipts and expense workflow and I had to decide how I wanted to move things through each process. I looked at all of those things and I said okay here's my available tools that I’m going to deploy in my system. Tags are one of them. I do use tags in my system but in a very simplified way. That is the first tool in my wheelhouse.
The other is the Inbox/Outbox mentality. I’m using a shared notebook to help define where things are in the process and it's a very effective technique to moving things through a workflow; I use it not only my expense workload but when we design workflows for clients and you know manage our internal communications. If something is in one notebook, it needs to be worked on then moves to another when the status changes.
29:35 - The third is the naming conventions. How I name my notes helps impact the status and the process and in the question that Andrew asked here, “Does Evernote read the data, then therefore become searchable by date?” That’s a big part of it. The search feature of Evernote is so powerful but it is really not necessary to break things down into monthly notebooks. I don't break them down into monthly notebooks either I really just put everything into a year. I deal with things by year because again every photo that's put into Evernote is indexed by Evernote and I can then search for that date, for that amount, for that vendor, and those types of things are very important tools that help me to retrieve information when I need it.
[Kristi] Stacey if I can just add one thing, the one challenge, and the reason I have been adding the date to the name, is every now and then I'll get a receipt where the day is not clear or because I have so many restaurant receipts that might be hand written that the day isn't showing up well in search because it's not written well… that is why I did go ahead and put the date in the name because I needed to have a little bit more consistency and couldn't rely on all the receipts that I have to have the date in them.
[Stacey] I completely agree with Kristi, I use that, too. Additionally it helps differentiate between that forty-eight Panera receipts to know which day it’s on at a glance. In answer to that question, I have all of those tools, and what I developed is a stack that I call HE Bookkeeping. I also want to articulate I actually care about both my personal and my business expenses in terms of a receipt perspective. I just prefer to have all that information it help me in my personal budgeting understand where things are going. Reconciling that; sometimes I put business expenses on the wrong card you know that kind of a thing, so I a process that encompasses both my personal and business receipts.
The first notebook though that I have is really just kind of a back office function I call it Key & Questions, I use the dot to sort it to the top. I put things that are helpful to understanding and documenting my work… accounts that I have with QuickBooks. I put any templates about particular data entry that I want to have happen by my bookkeeper this way if the bookkeeper hires someone else in essence a training manual there for them. I have code about what automatic payments that I’ve authorized for my credit cards; you know these just reference materials that impact the system I centralized in a key and questions notebook.
33:35 - Like Kristi said, digitizing and centralizing the information and the receipts is core to the process and I use all the skills that Kristi oriented you to. I’m constantly photographing receipts from the field, I’m scanning using my Canon. I’m traveling right now and I have my Canon scanner with me so that I can scan from the road. I travel with it; when I travel I've got a folder that I use for my process. If I can’t photograph it there, I put it in this inbox folder, then I’ll go through and I will scan them when I have 5 minutes to do that. Sometimes when I’m at the airport I’ll do it, etc.
I am emailing in receipts and then I love FileThis. I’m going to show you some screenshots about that. That is kind of the missing part.. I don’t have to scan or email in PDF documents of my credit card or utilities, I can just have it auto-added to my account.
What happens is on the first thing I do is and digitizing and I'm centralizing those in my Raw Scans notebook. The point is, get the data in there, and sometimes I don’t have time to name it the way I want, or I know I’m getting an invoice and the payment of that invoice. I might want to mesh at another time. I’m centralizing this all into a raw scans notebook.
34:55 – FileThis is a part of this. Here is a screenshot of my account. I went in there and I picked from the right hand side all of the utility and credit card and bank accounts that I have… I told FileThis Fetch, my account credentials and what they do is they go through and, in essence, sweep those accounts on a weekly/daily basis and it sucks out the statement and puts it in my Evernote account as a PDF. Here’s an example: my CitiBank Visa card is connected, on the right hand side I have a File This notebook for CitiBank Visa. It puts a new note in there, tells me where it came from, and puts a PDF of the statement in there. In addition, it actually e-mails me to say, “you have a new note in your FileThis notebook in Evernote!
My process then is I go into Evernote, I move that note into the Raw Scans folder, and now it’s part of my process along with my other documents that have come in.
The second step is I clean up and I review. I actually have my assistant go through and normalize the data. When something goes into the Raw Scans notebook, I have her go through and change the subject line of the note… you can see here, that I get a date and I put the title of the vendor in the subject line. Now depending on your process you may choose to reverse the date so you have the year at the beginning so that when you sort all your annual receipts it will be in numerical order.
I'm cleaning up the data, I have my assistant normalize the note title which is going impact data entry that's done; I can write at notes around the note I want at this time but I'm basically cleaning up and reviewing. We’re also merging notes at this phase. If I've got say an invoice that came in and then a picture of the check that I wrote or receipt of the Pay Pal expense that was used to pay it, I'll have that merged at this point so that those two notes are becoming one.
Step 3: my assistant will be working in that shared notebook. I will go in when I have time, and I will also do a find and move notes. I actually forgot a part, you can see it here. The assistant will add whether it is a personal or business expense in the tag. At some point I’ll go through and do a Find. The screen on the left shows my saved search for all notes tagged with “business.” You can see in the upper right hand toolbar, you can see what the search is. I quickly scan those to see if the data entry looks correct, then I’m mass moving notes into their proper notebook. Either Business Incoming, or Personal Incoming. This phase is separating them out into their own notebook. That prepares them for data entry into my system.
The next phase then, is that the bookkeeper that is also in on that shared notebook. They will then do the data entry into QuickBooks for me. They will use that Key & Questions notebook to understand my chart of accounts better and what I intended. If they have a question, they’ll just put question in the naming convention so that I can then sort and see all of the questions in the notebook.
She’s actually using annotations features in Evernote to really mark up the PDf there and highlight the numbers that need further clarification about what category those should be coded to. At some point, as she does the data entry, my process is, she’ll put DONE in the subject line of the note. The goal is that all of those incoming notes from Raw Scans go into the Inbox and then when they’re processed, DONE gets added.
So step five is that we move those as soon as they’re all mentioned as DONE. This is just ongoing, maybe on a weekly basis. Those receipts will get moved from business to personal to incoming. You can see at a glance I can get a feel for how much data or where people are in the process by the note count that’s on the right hand side of my stacks. Then what happens is over the year that type of stuff adds up and things move through this Raw Scans, business or personal incoming, onto personal processed or business processed, and at the and of the year, or when I'm ready to do my taxes February 1st, of course… what I will do is those processed become my archived notebooks for the tax year. I’ll rename the notebook to 2014 Taxes Business Receipts and that becomes my archive and my audit trail.
Then I also at this point will create a tax documents notebook that the intent is to share with my CPA. So my bookkeeper, I trained them on Evernote, I got them into Evernote. What I did is I created a tax document, they don’t actually need all my receipts unless there's a question or an audit so I just put in all of my 1099s all of my miscellaneous income, all at my mortgage interest statements, all those things that actually do impact that I would typically just hand them in paper format… I scanned it, put it into this tax document, and then I publicly share it with my CPA.
The screenshot shows that at the bottom he can choose to view the notebook if he needs to see the data from and browser. To my chagrin, he emailed me back hard copies of documents, which I will promptly scan and put into my system. He doesn’t need to be an Evernote use, he just needs access to the public notebook. When the process if over I can just unshared this notebook and keep it retained in my archive.
That's my process. I wanted to also show the screenshot from my client here in Houston. He’s an Evernote Business user, and he actually has his accountant is a very important part of his overall operations because he's dealing with some bigger structure than I am… she's actually also on Evernote Business. He actually adds her as part of his business account, and that gives them some additional collaboration and they use this inbox/outbox technique. The second notebook there is title Ann, and any receipt he gets is put into there, then she does the normalization of the data and entry into QuickBooks. After that, she moves it into the accounting notebook.
45:55 - A couple of things he does, he uses Skitch to write the code in the PDF or the image that is inserted into the note. This is because his bookkeeper and accountant is actually printing some of these. And that wraps up my process!
Kristi and I both use FreshBooks, but I only use it for invoicing, not account reconciliation. I am a huge fan of this outstanding tool. I might create a PDF of revenue that was received through FreshBooks and add it to my Tax Notebook so that my CPA can receive that information when compiling my taxes. You can see the difference is about how you can work with outside people versus an internal team in managing here.
[Kristi] Both of these give a good overview of what the process can look like and I have to say that for me the big piece was having that Inbox process in place where receipts have a place to live until they’re reconciled. Then having that collection point, the naming conventions and the tags have been really helpful. I was very excited to get rid of the file folders that were overflowing with receipts. I think you've converted me finally to sign up for FileThis because I just would love to scan that statement in. I think I’ll be switching to that.
[Stacey] The other thing, too, is that I actually am able to keep up on them quicker and pay them in a more timely manner. It just happens faster because it happens automatically and I don’t have an e-mail that I have to then add to part of my process. It’s just there. I'm very impressed with the tool.
We’ve talked about some of these details extensively in the resources notebook at GetUntethered.com. Kristi and I put in writing a lot of those things we weren’t able to expand upon in the book. We add and update that all the time!