As scanners shrink, their tax uses grow

The once-clunky scanner, formerly a heavy flatbed machine, has downsized to a portable device that can fit into a briefcase. Some models are designed for business cards; others can scan somewhat larger, letter-size documents. (Jonathan Wiggs/Globe Staff)

It's tax time, and for management consultant Eric Ochieng, that used to mean spreadsheets, receipts, and other scattered documents.

But now Ochieng handles his digital record-keeping with a portable document scanner that comes with software for categorizing images, whether it's a business card or a credit card statement. Ochieng says he also tracks all of his travel expenses, scanning in receipts and recording out-of-pocket and business costs. And at the end of the year, he runs ad hoc reports that he gives to his accountant.

"I have up-to-date information about expenses incurred, and immediate access to receipts and related notes, which are saved on my laptop," says Ochieng.

That clunky scanner, formerly a heavy flatbed machine, has downsized to portable document scanner that can easily fit into a briefcase and is typically made to scan receipts, business cards, and other small papers, as well as for letter-size documents.

Most of the scanners use technology called optical character recognition to recognize and interpret text, even analyzing the information and putting it in folders that users organize. You can export data to Excel, Quicken, Adobe Acrobat, or other software.

For example, Jeff Vogel, director of marketing at the Philadelphia-based technology company Neat Receipts, says for taxes, you can scan last year's receipts, assign the appropriate category (such as "Charitable Donations"), then run a report that automatically aggregates the data and even tells you where it belongs on your federal tax form by line item. The Internal Revenue Service accepts scanned receipts, so you can back up your data and dispose of all those pieces of paper.

One drawback of these scanners is that for prices of $150 to $250 and up, they serve only a single function. Many do not have compatibility with Mac computers. And they usually can't handle paper larger than 8½ by 11 inches. They also have trouble deciphering faded or handwritten receipts.

But Chris DiOrio, senior category merchant at Staples, says that he finds the portable business card machine is an efficient productivity tool.

"Rather than have a stack of business cards or key in the information, I can scan in my business cards and have the information automatically saved to Outlook," says DiOrio, who adds that after returning from trade shows or meetings, he'll scan the many business cards he has gathered and then save all of the contacts.

Vogel of Neat Receipts says that he's heard from customers who use these devices for personal and hobby applications as well. Uses include scanning clipped recipes to create a database of family favorites; children's artwork, report cards, and birthday cards for scrapbooking; prescriptions; checks; and warranties and receipts for product purposes.

"You can take static information locked in paper and turn it into actionable data that you can use," says Vogel.