Wednesday, May 15, 2024

What is Receipt Line Item?

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Stay on Top of Your Business Receipts. Without Stress, Spreadsheets, or Manual Data Entry.

Try Receipt-AI today.

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What is a Receipt Line Item?

Whenever you make a purchase, your receipt lists the individual products or services you paid for. Each of these entries is known as a receipt line item.

Understanding line items helps you:

• Track spending more accurately
• Detect billing errors
• Maintain clean records for accounting and taxes

A receipt line item includes specific details about what was purchased - such as the item name, quantity, unit price, and total amount. It breaks down the full transaction into clear, manageable parts.

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Real Example: Restaurant Receipt Breakdown

This receipt from Kuro Ramen (Chicago, Sept 28, 2024) includes:

• House Salad – $7.95


• Deep Fried Soft Shell Crab (2 × $7.50) – $15.00


• Kuro Ramen – $16.00


• Chicken Katsu Curry – $18.00

• Subtotal: $56.95


• Tax: $6.70


• Tip: $12.73


• Total: $76.38


• Paid with: VISA ending in 5119

Extracted using Receipt-AI and automatically synced with QuickBooks - categorized and organized in under 5 seconds.

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What Components are included in a Receipt Line Item?

1. Item/Description:

This is the name or a brief description of the product or service purchased. For example, it might say "Red T-shirt" or "Laptop Repair Service."

2. Quantity:

This indicates the number of units purchased. For example, if you bought three red T-shirts, the quantity would be "3."

3. Unit Price:

This shows the cost per unit of the item. For example, if one red T-shirt costs $15, the unit price would be "$15."

4. Total Price:

This is the cost of the quantity purchased for that line item. Using the same example, the total price for three red T-shirts would be "$45" ($15 per shirt times three shirts).

5. Category:

If you’ve connected your QuickBooks Online account to Receipt-AI, we’ll use your Chart of Accounts to categorize your receipt line items. If not, we’ll apply general business categories to your receipts instead.

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Another Example: Small Purchase, Fully Tracked

Receipt from Jackalope Coffee & Tea House (Oct 1, 2024, 7:46 AM):

• 2 × 20 oz Coffee – $5.60


• Sales Tax: $0.57


• Tip: $1.00


• Total: $7.17

Captured via SMS and processed by Receipt-AI.
Categorized as “Operating Expense – Meals & Entertainment” and uploaded to Xero - fully automated.

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Why are Receipt Line Items important?

1. Transparency:

Line items provide a transparent view of each component of your purchase. This transparency helps you understand exactly what you are paying for.

2. Expense Tracking:

Detailed line items make it easier to track expenses for budgeting and financial management. You can see exactly how much you spent on each item or service.

3. Dispute Resolution:

In case of any discrepancies or disputes, line items offer a clear record that can help resolve issues with vendors or service providers.

4. Tax Purposes:

Detailed receipts with line items can be useful for tax documentation, especially for businesses that need to keep accurate records for deductions and audits.

5. Business Analytics:

For businesses, analyzing line items on receipts can provide insights into purchasing patterns, popular products, and areas where costs can be optimized.

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Save Time. Stay Organized.

With Receipt-AI, all you need to do is snap a picture of your receipt and send it via SMS. We’ll automatically extract every line item, categorize it, and sync it with your accounting software - all in under 5 seconds.

No spreadsheets. No manual entry. Just smarter receipts.