The Connected World
The main reason businesses lose time on data gathering is paper. And even in the Xero cloud age, physical records are still slowing down the process. In fact, much of the traditional bookkeeping process is just moving information around.
First, clients need to get their receipts and invoices to their accountant or bookkeeper. This usually involves the dreaded shoebox of paperwork, or it might have progressed to an email of scanned PDFs.
Either way, someone then has to spend hours typing all the data into a spreadsheet or into Xero. It’s slow, it’s boring and it’s really easy for errors to creep in. Then it’s time to comb through the bank feed to work out which items are paid and unpaid.
The advance of digital commerce has changed all of this, especially with the increasing ubiquity of open APIs. More and more transactions take place entirely online.
For example, when your client pays a utility bill by direct debit, your energy supplier generates an electronic invoice. It’s possible for that invoice to be picked up, the data recognised and transferred to their books, along with proof of payment, without any effort from you.
In this case, all that’s left for you to do is click ‘Reconcile’ in Xero. The next step is up to you. But how do you build an automated process that’s also fully reliable?
With such a convoluted process, it’s no surprise that there have been many partial automation solutions. Each of these offers an incremental increase in efficiency. One of the simplest ways is also the most seldom used - simple email forwarding.
Every email provider, from Office to Gmail, offers the ability to forward emails based on sender. With one simple change, your clients would never have to remember to forward a supplier invoice to you, or lose their audit trail in a busy inbox.
So why doesn’t every small business just set their suppliers’ email addresses to automatically forward to their accountant or bookkeeper? The truth is that, in isolation, most partial automation systems deliver too little value to make this worthwhile.
After all, when every document still needs two minutes to be transcribed into Xero, what is the incentive to save two seconds?
The real power comes when the process is connected – a series of events where each enables further efficiencies. We are now at a place where this is possible.
Electronic document capture enables automatic data recognition, which can then be matched to a bank feed for certainty, and reconciled instantly and safely.
So how does this work in Receipt Bank?
Data is Mobile
One of the biggest early advances in real-time accounting was implementing mobile technology. Suddenly, everyone had the ability to view the same information instantly, wherever they were.
The main problem was that the information they were looking at was seldom ‘real time’. Due to traditional processes of delivering records once a quarter, or even once a year, the data was often months out of date.
Mobile apps that captured receipts changed all this. Suddenly documents could be shared the moment they were received. The real-time dream was finally a reality. And since Apple and Google had spent millions developing a phone that everyone could use, even the most technophobic clients could be brought on board.
Having pioneered app-based receipt capture early on, Receipt Bank also expanded mobile interactions to include Whatsapp-style messaging to clarify receipts and invoices, as well as automated submission reminders to prompt clients to send in their documents.
Accounting is now moving from a mobile-capture system, where receipts can be snapped on the go once physically received, to an API-based system where documents are captured as soon as they are generated.
Receipt Bank’s Invoice Fetch links directly to over 2000 suppliers that deliver their monthly invoices via an online portal. This means our system can pick up the invoice automatically, import it into the client’s account and extract the data straight away.
There’s no work for the client, the bookkeeper, or the accountant, just instant collection.
Going Beyond OCR
OCR stands for Optical Character Recognition, and it’s been around in various forms since the early 20th century. OCR software is designed to analyse images of printed text and turn it into data that a computer can process more easily – or put into a spreadsheet/general ledger.
Applying it to receipts and invoices has always been a challenge as there is no set format for transaction records. That makes it hard to set rules for how a machine should approach reading a document.
This changed with the advent of AI and machine learning.
Receipt Bank was an early adopter of applying these new technologies in the accounting space. There was a common refrain that machines could never know clients as well as their accountants. And we agreed.
That’s why Receipt Bank’s extraction module learns from accountants and bookkeepers. In fact, every single user has a dedicated machine learning map that learns from their preferences and expertise.
That means every time you edit and review the data extracted by our system, for example, correcting a supplier, the algorithm learns and applies the rule to similar items.
We now process over 4,000,000 receipts and invoices every month, with the highest accuracy of any cloud app. Processing times have decreased by 80% in the last year alone.
The end result is automation that accountants and bookkeepers can trust, as it learns from you just like a member of your team.
The introduction of bank feeds was a huge step for Xero users. Everyone could now save huge amounts of time on reconciliation by matching transactions directly to a bank feed.
We have the ability both to use it as the final check in the system, and to pull the data earlier in the process as a source of truth. Not only is this essential to check the accuracy of extracted data, but it also helps answer the age old time drain of working out whether an item has been paid or not.
So, if you’re client sends in a receipt which matches a line in their bank feed in Xero, we let you know. We even put the bank data right next to the extracted data, so you can check it’s all correct.
Using Xero’s API, Receipt Bank can publish to a variety of locations in the ledger. Since users are notified instantly if an item is already in the bank feed, it can be published straight to Paid Items and reconciled straight away.
It’s all part of building control and certainty into every step of the bookkeeping process.
The Bookkeeping Switch
Once, bank reconciliation was the final result of a long, arduous process – the sigh of relief that signalled a safely balanced transaction.
Now, however, reconciliation has become the first step on a journey of adding value. With one click, accountants and bookkeepers have a solid foundation for advice, forecasting or even just growing the size of their practice.
We’ve seen sole practitioners handling over 200 clients on their own, thanks to the effective implementation of automation tools like Receipt Bank.
Now is the time to make the bookkeeping switch - stop spending your time just getting the data and start using it to make a difference.
Receipt Bank puts you into control of the process. What you do with the time you save is up to you.