Author Topic: automatic expense itemization?  (Read 12667 times)

WageSlave

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automatic expense itemization?
« on: July 09, 2012, 10:29:53 AM »
Prior to finding this website and ERE (which was late last year), I kept very loose expense-tracking records.  Actually, I was half-way decent until last year, when our first child was born.  :)

But, as of the start of this year, my wife and I are trying to track things very carefully.  But as this thread made me realize, I think even now my view into our expenses may be at too high a level.

Our strategy has been to create a bunch of expense categories.  Every week, we look at all new expenditures, and add them to their respective category.  We track all this in GnuCash, and every month run various handy reports to see a breakdown of expenses.  This has been pretty handy for seeing an "executive level" view of our monthly expenditures, but not the details.  For example, say we spent $100 at Jewel.  We only buy groceries there, so we just add $100 to the grocery expense.  For something like Costco, where we get both groceries and household goods, we'll quickly divide the total outlay among those two categories.  But I won't have an itemized breakdown in either case.  So when I go back and review, it's basically impossible for me to answer the question, "what all did you buy that added up to $250 for household goods"?

What I'd like is to take it a step further, and basically have every single item on a receipt in some more usable format (doesn't have to be for GnuCash, a spreadsheet would suffice).

I have a document scanner (a Fujitsu ScanSnap 1500), and I have meticulously scanned all our receipts.  Has anyone experimented with any kind of OCR (optical character recognition) software for automating this?  I want to itemize, but I really don't want to take the time to manually type in every single item on a (for example) grocery receipt.


James

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Re: automatic expense itemization?
« Reply #1 on: July 09, 2012, 10:44:51 AM »
Wow, that would be a really awesome financial tool to be able to scan in receipts and have everything be imported to a format allowing you to view and manipulate the data.  It could be exported to Mint and other tools saving tons of time and effort, while yielding much better data.  I'd pay good money for that, but I haven't seen anything like it out there.

crunchy_mama

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Re: automatic expense itemization?
« Reply #2 on: July 09, 2012, 11:02:02 AM »
Just there /I started keeping more detailed records, although not scanning receipts.  It is a bit old school but works for me.  I have basics I keep track of in MInt.  However, I also have a binder in which I put more detail.

I have a monthly budget sheet and then individual sheets for all my budget categories:
utilities, house maintenance, house repair, utilities, charity, cleaning, farm/animal supplies, tracfone minutes, groceries, allowance/personal spending, clothing/personal care, education, kids activities, misc, gas, auto maintenance, auto insurance, car repairs, entertainment, dr visits, OTC medicine/Natural Health, Prescriptions

On each sheet I put each transaction for the month in that category

ie:
car repairs:
date- store- description of expense- ex) van computer- amount- monthly total

personal care:
make-up
deodorant and shaving cream

house maintenance:
air filters

groceries:
aldis-produce-
Farm- chicken
Azure- bulk goods

So, I don't put individual receipts in there but break down everything and explain where every dollar and penny went.  I wanted to do this so I can better project expenses, especially for those variable categories and also to see where we need to look at cutting more. 

arebelspy

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Re: automatic expense itemization?
« Reply #3 on: July 09, 2012, 11:29:43 AM »
Mint's categories are good enough for me.

I haven't felt the need to go more granular (i.e. "how much do we spend on detergent?") than that.

So I suppose our "groceries" part of our budget should actually be labeled "groceries/household items."

How much are you spending on household goods that it is a significant part of your budget?

I feel like we spend so little on those type items that to have it as part of grocery, cause it was bought at the same store, doesn't significantly inflate the grocery part of the budget, and the hassle of separating it out wouldn't be worth the tiny benefit of knowing exactly how much we spend on toilet paper.

Occasionally if we happen to spend a giant amount on something, I will split it out (i.e. if we bought a new bike at Wal Mart for $300 or something) as shopping, rather than groceries.  This is pretty rare though, done maybe twice per year.  If we bought something like a pillow ($10), I wouldn't bother.  I don't split out the pet food expenses, for example.

I just don't need that many individual categories.

YMMV.
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WageSlave

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Re: automatic expense itemization?
« Reply #4 on: July 09, 2012, 02:03:38 PM »
I haven't felt the need to go more granular (i.e. "how much do we spend on detergent?") than that.

So I suppose our "groceries" part of our budget should actually be labeled "groceries/household items."

How much are you spending on household goods that it is a significant part of your budget?

See this other thread I started.  In my first post on that other thread, that's what I was trying to say: what we call household goods, I would expect to be a small enough part of the budget that I could lump it into something else (e.g. groceries) and not worry.  But I'm already struggling with groceries, so wanted to keep non-groceries separate.  We're spending over $250/month on household goods right now.  That seems way too high (I would expect $50/month or less), but I can't isolate the source of the bleed.

Anyway, maybe I'll just manually type out the household goods category for now.  And, as time permits, experiment with some OCR software, and see if I can't automate this.  If I figure something out, I'll report back.  crunchy_mama's suggestion could also be useful, it's basically a half-way solution between where I'm at now and what I'm considering, i.e. more granular categories.  I'm not familiar with Mint (which seems to be quite popular around here), but in GnuCash, all categories (accounts, technically) are hierarchical.  IOW, I can create sub-categories under "household goods", yet not lose the ability to have the higher-level view.

I just don't need that many individual categories.

I find it's one of those trade-off situations.  More categories gives you finer-grained information, but at the expense of time spent doing your bookkeeping.  Fewer categories is quick and easy, but at the expense of granularity.  If our spending was down to a more comfortable level, I'd definitely opt for fewer, high-level categories.  But my wife and I find ourselves struggling to answer the "where does it go" question too often, which says to me we need to dig deeper.

igthebold

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Re: automatic expense itemization?
« Reply #5 on: July 09, 2012, 03:42:10 PM »
There's always Shoeboxed (https://www.shoeboxed.com/). I've used it.. it does the OCR, with QC by humans, but it doesn't itemize. Itemizing would be a *hard* problem, I think, especially given the personal nature of categories.

An interesting hack would be to use Amazon Mechanical Turk or Crowdflower, but it would be impossible to do in a cost-effective way. Fun to think about though.

WageSlave

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Re: automatic expense itemization?
« Reply #6 on: July 11, 2012, 11:55:43 AM »
Just an update for anyone who's curious.  I tried only one OCR program (FreeOCR).  The results were passable, but I discovered there's a bigger problem.  That is, every receipt is different.  Some places put every item on one line, some places have multiple lines per item.  Even the same store can have different receipt styles, depending on store location or even if you use the manual checkout versus assisted checkout!  In other words, the bigger problem is "normalization" or "standardization" of the data into a consistent format that can be fed into a spreadsheet.

I found that time spent re-formatting the data offsets any OCR gains; it's actually easier to just type things in manually.  This is true for at least relatively short receipts.  I haven't worked on an overly-long receipt yet.

I think for certain categories, I'm just going to have to make this manual entry part of our regular expense tracking process.

arebelspy

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Re: automatic expense itemization?
« Reply #7 on: July 11, 2012, 02:26:30 PM »
Thanks for the follow up.

Have you tried any of the receipt scanning solutions?  I feel like there might be a product out there for this, but I could be wrong (and it may be prohibitively expensive).
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skyrefuge

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Re: automatic expense itemization?
« Reply #8 on: July 11, 2012, 02:33:56 PM »
Surely such a piece of software must already exist.  Why?  Because a few weeks ago, I had the very same idea, except I was thinking of a smartphone app where you would just take a photo of your receipt, and some receipt-specific OCR would do all kinds of fancy magic with it.  And since every time I have a new and novel idea like this, I quickly find out that someone else has not only already had the same idea, they've even implemented it and started selling it!  I simply do not think it's possible that this is the one case that breaks that pattern!

Mirwen

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Re: automatic expense itemization?
« Reply #9 on: July 11, 2012, 11:40:23 PM »
I don't have an automatic solution, but I use Mint for this and it doesn't take more than 10 minutes every few days.  The transactions are automatically downloaded and then I make notes and split the transactions into categories as needed.  I don't go line by line, but I do make a note of what I bought so I can remember later.  For example, if I made a purchase at Lowes, I might notate that it was tiling supplies or a light fixture.  I make sure to do this at least every 3 days or so, so I don't forget what I bought.  You could save receipts for reference too.

Since I also have trouble with my household goods I have made several different categories.  I separate food groceries, non-food groceries (essentials), and shopping.  Shopping is further broken down into about 12 categories including tools, pets, kids, household items, clothes, yard, etc.  This has helped me see where it is all going.  However, the trouble for me ended up not being any specific category, so I'm still struggling.

catalana

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Re: automatic expense itemization?
« Reply #10 on: July 12, 2012, 05:36:04 AM »
Just an update for anyone who's curious.  I tried only one OCR program (FreeOCR).  The results were passable, but I discovered there's a bigger problem.  That is, every receipt is different.  Some places put every item on one line, some places have multiple lines per item.  Even the same store can have different receipt styles, depending on store location or even if you use the manual checkout versus assisted checkout!  In other words, the bigger problem is "normalization" or "standardization" of the data into a consistent format that can be fed into a spreadsheet.

I found that time spent re-formatting the data offsets any OCR gains; it's actually easier to just type things in manually.  This is true for at least relatively short receipts.  I haven't worked on an overly-long receipt yet.

I think for certain categories, I'm just going to have to make this manual entry part of our regular expense tracking process.
I was thinking you would find this issue as I was reading through the thread.  I worked alongside a team implementing invoice recognition at a University.  They discovered it was only worthwhile for suppliers that were used regularly, and could be relied upon to produce invoices in a consistent format.  There is a time cost to set it up to work reliably that means this kind of software isn't worthwhile for suppliers (and goods and services) that are used infrequently.

Even for an organisation spending 100m+ per annum, including several thousand on specialist software, there were many purchases which were simply more efficient to type in by hand.

This leads me to think you should concentrate on nailing your biggest / most frequent spend (probably groceries and maybe petrol) and not to sweat the other stuff.

mustachio

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Re: automatic expense itemization?
« Reply #11 on: July 12, 2012, 07:28:47 AM »

Arbor33

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Re: automatic expense itemization?
« Reply #12 on: July 12, 2012, 12:44:34 PM »
I know it wont accomplish everything you're looking for, but why not plop a divider on the conveyor belt and just cash out two separate times at the register? Regular groceries get their own receipt and household goods get theirs as well. At least that way, if you really wanted to go line by line you would be a bit more organized.

WageSlave

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Re: automatic expense itemization?
« Reply #13 on: July 12, 2012, 12:54:46 PM »
I know it wont accomplish everything you're looking for, but why not plop a divider on the conveyor belt and just cash out two separate times at the register? Regular groceries get their own receipt and household goods get theirs as well. At least that way, if you really wanted to go line by line you would be a bit more organized.

That's a good idea!  Only caveat is that my wife does virtually all the shopping, so I have to sell the idea to her.  It might be a hard sell, given that she manages an 18-month-old while shopping and checking out.

grantmeaname

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Re: automatic expense itemization?
« Reply #14 on: July 12, 2012, 01:02:45 PM »
You could also ask the cashier to print a subtotal on your receipt when she finishes one of your categories (like all the groceries). I don't know if Mint could handle it, but at least you would be able to track it separately.

arebelspy

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Re: automatic expense itemization?
« Reply #15 on: July 12, 2012, 07:52:13 PM »
You could also ask the cashier to print a subtotal on your receipt when she finishes one of your categories (like all the groceries). I don't know if Mint could handle it, but at least you would be able to track it separately.

Should be fine on Mint - it supports splitting transactions.

Arbor's idea is great (sometimes the simple solutions are right under our noses), and I like grant's tweak - should be much easier to convince the wife to just separate them in the checkout counter (put all of one type of item up first) and ask the cashier for a subtotal than convincing her to do two separate checkouts with separate payments every time.

And if you have her read this thread, then the latter idea will sound so much easier after reading the former, she'll be much more likely to go for it.  Just stop her from reading this comment.  ;)
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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