How We Automated Hours of Manual Bookkeeping for Our Agency

Hey fellow entrepreneurs,

I'm here to share a story that many of you might relate to, especially if you've ever dreaded tax season. This isn't a story of instant success or a magic solution but rather a journey through the challenges of running your own business and looking for a smarter way to manage one of the most important but tedious tasks: organizing receipts, invoices, and bills for tax preparation.

Like many of you, I run a small agency. We write software for clients. Over time, we adopted a system of using separate email addresses for each client to maintain a semblance of organization and sanity. This way, we could sign up for services, receive receipts, and manage invoices in a somewhat organized manner. Practical, right? Well, it was until tax season rolled around.

That's when the real challenge emerged. Suddenly, we were faced with the Herculean task of digging through each email account to find, categorize, and compile every document needed for tax preparation. It was a process fraught with inefficiencies: setting up custom rules that never seemed to catch everything, manual searches that felt like looking for a needle in a haystack, and the ever-present fear of missing something critical. Clearly, this method was neither scalable nor reliable—just a massive, error-prone time sink.

Last tax season, I became extremely frustrated with this process. I had an idea to use technology to automate it, but I needed to figure out how. First, we experimented with various solutions, from tinkering with Zapier to integrate different apps to outsourcing the work to pricey accountants who, in turn, often outsourced the task at a fraction of the cost. Neither approach was satisfactory or cheap.

That's when my team and I decided to take action and develop something internally to automate the process using large language models (LLMs). We are a software development agency, after all, right? Our goal was to make the entire process less grueling and more efficient for everyone involved.

Luckily, after almost a year of development, the result was a game-changer for us. We built a tool called Receiptor AI that allows us to run bulk extractions for each client's email address to catch up with past documents and continuously monitor them for any incoming documents. All of this without lifting a finger. After extracting all those receipts and invoices, it automatically categorizes them based on our chart of accounts, sends them all to our accounting software, and organizes them into folders in Google Drive.

This way, we transformed our tax preparation process from a manual slog into a smooth, automated operation. Why is this important for us? As an agency that earns from clients and pays for services on their behalf, accurate tracking and categorization are vital. We need to report transactions to avoid financial discrepancies impacting our profitability since we might be unable to deduct these expenses correctly, leading to higher tax liabilities and reduced financial efficiency.

How do you deal with it with your business? Was there a solution that I wasn't aware of all along? The software took us almost a year to develop, but I'm delighted with the level of automation our bookkeeping has reached!

Automating this process has saved us time, significantly reduced errors, and gave us peace of mind. I'd be happy to share our tool with you to try out if you feel you are in the same boat and think it could be a relief for you.

Comment below or message me if you're interested in accessing it or want to share your tax season horror stories!