Every UK business generates receipts and bills. The traditional response is a shoebox, an inbox folder called "Expenses," or a desperate quarterly scramble. The modern response is a receipt-capture app that uses AI to read documents, extract the data, and push it into your accounting software. This post compares the leading options and tells you which suits which business.
What these tools actually do
Receipt-capture apps perform three jobs: capture (photo, email, drag-and-drop), extract (OCR plus AI to read supplier, date, amount, VAT), and publish (push the data and image into Xero, QuickBooks, or Sage). They sit between you and your accounting software, converting paper and PDFs into clean, coded transactions.
The four main players
Hubdoc
Owned by Xero and included free with most Xero subscriptions. Good extraction accuracy for UK suppliers, simple interface, decent mobile app. Limitations: no rules-based coding to the depth of Dext, no expense-claim workflow for staff, and integration is Xero-first. A safe default for small Xero users.
Dext (formerly Receipt Bank)
The market leader for accountants. Best-in-class extraction, deep rules engine, supplier-level coding memory, multi-currency, line-item extraction (so a Tesco receipt becomes a coded list, not a single total), employee expense claims, and credit-card statement extraction. Works equally well with Xero, QuickBooks, and Sage. Paid per user/month. Our preferred tool for any client over £200k turnover.
AutoEntry
Owned by Sage but plays well with all platforms. Strong on bank statement and credit-card statement extraction — useful for catch-up work where bank feeds don't go back far enough. Pricing by document credit rather than per user, which can suit irregular volumes. Slightly behind Dext on UI but very capable.
QuickBooks built-in receipt capture
If you're on QuickBooks Online, the built-in receipt capture is free and surprisingly good for low-volume users. No separate subscription, simple mobile capture, decent extraction. Limitations: no rules engine, no expense-claim workflow, less control over coding. Fine for sole traders and small limited companies; not enough for businesses with employees claiming expenses.
The four-question chooser
- Do staff submit expense claims? If yes, Dext.
- Are you on Xero and under £300k turnover with no staff claims? Hubdoc is enough.
- Do you need to extract from bank statements or credit card statements? AutoEntry or Dext.
- Are you a sole trader or micro-business? Built-in QuickBooks capture or Hubdoc.
What "AI extraction" actually gets right
Modern OCR-plus-AI accuracy on UK suppliers is around 95–98% for the four key fields (supplier, date, gross, VAT). It struggles with: handwritten receipts, thermal receipts that have faded, non-UK suppliers in obscure currencies, and invoices with multiple VAT rates. Always do a 30-second human review before publish. The time saving is not "zero effort" — it's "two minutes per receipt instead of fifteen."
The four habits that make any tool work
- Capture at the moment of purchase. Photograph the receipt before you leave the café. Don't batch a month's worth.
- Use the supplier email forward. Forward digital invoices to your tool's inbox. Most extract automatically.
- Set supplier rules early. First time you process an Uber receipt, set it to code to Travel with 20% VAT, and every future Uber is done.
- Reconcile receipts against the bank feed. Every card payment should have a matched receipt. Anything unmatched is either a missing receipt or a duplicate.
The VAT angle that catches people out
HMRC requires you to keep a VAT invoice (not just a card receipt) for any expense you reclaim VAT on, above £25. A coffee shop receipt usually qualifies; an Amazon dispatch note does not — you need the proper VAT invoice from your Amazon Business account. Receipt-capture apps store the image, which is your audit trail. Our VAT compliance team uses these tools as primary evidence during VAT reviews, so the document quality matters.
What "Making Tax Digital" requires
From a digital-records perspective, capturing a photo of a receipt into Dext or Hubdoc satisfies MTD. The image plus extracted data form the digital record. You no longer need to keep paper. We cover MTD requirements in detail in our piece on digital bookkeeping — but for receipts, the headline is: capture digitally, keep the image for six years, and you're compliant.
Common failure modes
- Receipts captured but not published. They sit in Dext "to review" forever. Build a weekly publish habit.
- Duplicate publishing. Same receipt photographed twice and both pushed. Use receipt-capture tools' duplicate detection.
- Mis-extracted VAT. AI occasionally picks up the wrong number. Always glance at the VAT field on review.
- Personal receipts captured into business books. Lunch with a friend coded as "Client Entertainment" — HMRC notices.
Our recommendation by business size
- Sole traders: built-in QuickBooks/Xero capture.
- £100k–£300k turnover: Hubdoc (Xero) or QuickBooks native.
- £300k+, employees claiming expenses: Dext.
- Catch-up bookkeeping projects: AutoEntry for statement extraction.
Receipt management is the unglamorous workflow that determines whether your books are clean or chaotic. Pick a tool that fits your size, build the habit of capturing at the source, and you'll never lose a deduction or fail a VAT review again. Speak to us via our contact page if you'd like us to set this up for you.