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There can be so much hype when new technology kicks in.

Also, monthly software fees to go online add up to more than desktop software.

Some people compare the price of online accounting to Quickbooks Desktop.

Likely QuickBooks Desktop is a lot less expensive.

This is false economy.

Here is why…

Online Accounting is a System

Online accounting is vastly different from traditional accounting.

In traditional accounting, clerks spend all their time on data entry.

To show you, here are all the steps to process a supplier bill.

Step 1 – The Supplier Mails/Emails Bill

The bookkeeper takes the vendor bill and enters the following:

  1. Date
  2. Looks up supplier name
  3. Records the GST/PST portion
  4. Records the amount
  5. Records the account to post to
Step 2 – The Bill is Paid

The bill is paid by cutting a cheque or doing an Electronic Fund Transfer (EFT).

The bookkeeper must record the payment in the accounting system:

  1. Do a payment entry to record a decrease to the bank
  2. Record the reduction in amount owing to that vendor
Step 3 – Bank is Reconciled

Once a month the bookkeeper must now reconcile the bank.

He/she does that by printing off the bank statement or viewing it online.

They must match each transaction from the bank to a transaction in the accounting software.

Note that all the 3 steps above take time. They are prone to errors (keying in so many numbers dates and other details).

It is a terrible misuse of a good bookkeeper’s intelligence. They become data entry clerks.

Now, compare the above steps to processing a bill using online accounting software.

I am assuming 3 software programs to do this:

  1. HubDoc for data extraction
  2. Xero for the accounting software (could be Quickbooks Online)
  3. Online bill payment service (Plooto, a Canadian company)
Step 1 – Vendor Emails Bills to HubDoc

HubDoc does the following:

Extracts for you:

  1. Date
  2. Invoice number
  3. Vendor
  4. Amount owing
  5. GST
  6. PST
  7. Due date

HubDoc codes the vendor bill to the same account as the last time you did it.

High-end accounting technician reviews what HubDoc did above. He/she glances over to ensure amounts for taxes and total bill, date, and account code are correct.

(Note the error rate for extraction with HubDoc is ridiculously small. Some bills if they are faint or formatted weirdly need some human intervention. I have seen almost zero error rate on the numbers).

Technician, after a quick once over, clicks “publish”.

Here is the recap of what the human does:

  1. Quick eyeball check of what the software “data clerk” did
  2. Click “Publish”
Step 2 – Bill Moves to Accounting Software

Now the bill moves automatically to Xero with a PDF copy attached to the transaction.

The transaction was recorded automatically.

Step 3 – Bill Moves to Plooto for Payment

The PDF copy of the bill is automatically fetched by Plooto.

The owner or manager now has 4 mouse clicks to do:

  1. Choose bill for payment
  2. Choose your bank account to pay from if you have more than one
  3. Clicks continue
  4. Clicks “process payment”
Step 4 – Recording Above Payment

Plooto then records the payment inside your accounting software (Xero) automatically.

It reduces the bank account and records the payment against that vendor bill, so your accounts payable goes down.

Step 5 – Bank Reconciliation

Xero has bank feeds. What bank feeds do is log onto your bank automatically and feed (hence “bank feeds”) the transactions into Xero, your accounting software.

Here is what your bookkeeper does:

  • He/she goes to bank reconciliation screen and sees where the system has auto-matched your transactions with the bank transaction. When matched they turn green.
  • She/he clicks “ok”.
Summary of Workflows

Look at the table below for a summary. The system does most of the work for you. Compare to the little the technician does.

Done for You by Software Bookkeeper Tasks
Document extraction for each bill:

  • Date
  • Amount
  • GST
  • PST
  • Vendor
  • Account Code
Glance over for accuracy

Clicks “publish”

Records each transaction in accounting software:

  • Increases accounts payable
  • Increases the expense
  • Decreases GST owing (recoverable)
  • Adds PST to expense amount (non-recoverable)
  • Attaches PDF copy of bill

  • HubDoc files the bill by vendor and pushes to Dropbox or Google Drive, etc.
  • It adds copy of bill to the specific transaction in accounting software

Paying Bill:

  • Transfers bill to Plooto (secure online bill payment service)
  • Records payment in accounting software by:
    • Decreasing accounts payable
    • Decreasing the bank, you paid it from





4 mouse clicks

Reconciling bank: 

  • System matches the bank item to the transaction in your accounting software


Reviews transactions every day or so.

Clicks “ok” on green system matches

As you can see HubDoc can easily replace full-time data clerks. Yes, exceptions must be managed. However, just look at all the steps done by the system above and the very few mouse clicks by the technician. The time freed up can go into systems management, and higher-end reporting.

What is the downside?

Mindset. Traditional bookkeepers are addicted to processing documents. They often bypass systems to feed their addiction to paper processing and data entry.

21st Century accounting technicians are tech savvy systems-focused users. They manage the systems and look for exceptions.

HubDoc is now free with a Xero subscription. Xero runs about $40 CAD/month. Plooto is just $25/month CAD and that includes 10 payments. Subsequent payments are just $.75.

When you add up the costs you can see it is low!

Imagine the times savings though! Would you rather have your bookkeeper do data entry, or high-level accounting that adds real value?

Thanks for reading..