Why We Advocate for Hubdoc Over Xero Bills
Recently, a client decided to move away from using Hubdoc for receipts and bills, opting instead to use only Xero Bills and incorporating the Approval step. While this approach is entirely viable, I wanted to provide some context and clarity around why we generally recommend Hubdoc over Xero Bills for bill and receipt management.
Understanding the Options
Over the past few years, Xero has introduced multiple ways to enter bills and receipts, including:
- Xero Bills
- Xero Files
- Hubdoc
- Xero to Xero Network
- E-invoicing
Each of these has its own strengths, and it often comes down to an “if this, then that” situation, which makes it difficult to standardise processes. While Hubdoc is not perfect—none of these options are—we believe that it is generally still the most efficient solution for most businesses.
5 Key Reasons We Prefer Hubdoc
- Automatic Data Extraction
Hubdoc’s OCR (Optical Character Recognition) technology automatically reads, extracts, and populates key fields such as invoice number, dates, supplier name, and amounts. In contrast, Xero Bills requires manual data entry, which increases the risk of human error and takes more time. This is one of the main reasons I personally don’t use Xero Bills yet.
- Autosync for Efficiency
Hubdoc can be set up to automatically code and send bills and receipts directly to Xero. Depending on the settings, these transactions can appear as Spend Money, Draft Bills, Awaiting Approval Bills, or Approved Bills. For example, in my own business, I simply forward my Microsoft subscription invoices to Hubdoc, and they appear in Xero as Approved Bills, ready to match with my direct debit payment—no manual data entry required.
- Built-in Filing System
Hubdoc stores and organises all bills and receipts in a single place, making it easy to search by supplier, amount, or date. This ensures all financial documents are easily retrievable when needed.
- Convenient Mobile App
The Hubdoc app allows users to capture paper-based receipts and bills using their phone camera. While similar functionality exists within the Xero app and Xero Files, those alternatives often involve extra steps compared to Hubdoc.
- Seamless Email Integration
You can set up email rules to automatically forward invoices and receipts to Hubdoc for processing, further reducing manual data entry and improving efficiency.
Making Xero Bills More Efficient
For businesses that prefer Xero Bills, one way to improve efficiency is by ensuring that Xero Contacts have default account codes set up. This way, when entering bills, the relevant coding fields populate automatically, reducing the time spent manually selecting codes and improving consistency.
The Rise of E-Invoicing
As a heads-up, e-invoicing is becoming the preferred method for receiving bills securely. Several government agencies and large businesses are already transitioning to e-invoicing-only policies. This method allows invoices to be sent directly from one accounting system to another, bypassing the need for manual entry or document scanning.
Since e-invoicing automatically creates draft bills, it will reduce the need for Hubdoc in those cases. However, it doesn’t yet apply to receipts, and adoption will take time, meaning we will likely use a hybrid system of Hubdoc and e-invoicing for the foreseeable future.
As e-invoicing becomes more widespread, businesses will need to develop clear processes to manage a combination of e-invoicing and Hubdoc effectively.
Final Thoughts
Ultimately, the best system is the one that works best for each business. While Xero Bills can be a good option, we continue to recommend Hubdoc as the most efficient way to process bills and receipts due to its automation, filing capabilities, and seamless integration with Xero.
If you’re unsure which system is best for your business, we’d be happy to discuss your options and help implement the most efficient solution for you.
