Data Entry the Old Way
Before this killer app came along data entry was tedious, boring, and repetitive.
In the past, to save money, businesses started outsourcing data entry to India and the Philippines where labour costs are cheaper.
Now this killer app, made in Canada, called HubDoc is the biggest game-changer in monthly accounting and bookkeeping I have seen in decades.
And, by the way, there are other apps that do what HubDoc does, I just haven’t used them.
Also, full disclosure, our company are raving fan users, that is the sole motivation to write this blog – to let people know, who may have missed this app, what is available out there!
Data entry the old way involves taking source documents – either in electronic format or hard copies and entering the details – field-by-field – into the accounting software.
The data clerk must enter a lot of details – the date, the vendor, the amount, which account it will be posted to, and extract the sales tax separately.
How could a software app possibly rival a human being for speed and accuracy and reliability?
What is Now Possible
There has been a quantum leap in the accuracy of Optical Character Recognition (OCR) software in the past few years.
And, I think this quantum leap has largely gone unnoticed. A lot of us remember the scanning software of a few years ago that would take a Word or PDF document and convert it to searchable text. It would often be riddled with errors and people just could not safely rely on its accuracy.
“Over the decades, OCR has grown more accurate and more sophisticated due to advancements in related technology areas such as artificial intelligence, machine learning, and computer vision. Today, OCR software uses pattern recognition, feature detection, and text mining to transform documents faster and more accurately than ever before”. – Brief History & Evolution of OCR from Netchain 2
Although, OCR software was utilized extensively by librarians to digitize historical newspapers, its application to accounting has rarely been seen for what it really can do in practice.
Ok, so what can HubDoc do for your business, and have you be motivated to move your books into the cloud to gain some of these amazing benefits?
The first thing HubDoc does is gather up all your documents from whatever source – emailed, dragged in from your computer, or snapped on your phone. It will also – in the background, after you provide one-time credentials – seek out bills and statements from hundreds of sources, such as Rogers, Telus, BC Hydro, and large banks.
You can setup a unique email and have your vendors send their invoices directly to HubDoc. An example for Joe’s Barber Shop would be [email protected].
All right, so now that HubDoc has gathered all your documents what is next?
From there, HubDoc will begin its sophisticated digital extraction. It will read the emailed, scanned, or photo’d document and extract out:
- The date
- The vendor name
- The amount of the bill
- The taxes
- The due date
Now, this is where is gets really interesting (I know, I know only an accountant can get excited about document extraction software, right?!)
Most bills in almost any business are recurring in nature. The dates and amounts may change but the vendors remain the same.
What you can do next inside HubDoc is setup rules for what to do with specific vendors.
HubDoc will then actually pre-code those invoices to the correct account according to your rule and post it automatically to your General Ledger in your accounting software.
I will say that again, in case you missed the power of this. HubDoc will extract the details of an emailed bill, and pre-code it to correct General Ledger account, even extracting the sales tax, like GST, that is recoverable.
Does This Eliminate the Bookkeeper’s Role?
The bookkeeper together with HubDoc becomes elevated to a higher role. She/he becomes a bookkeeper by exception. Looking at the pre-coded docs and re-coding the exceptions.
All they have to do is login to HubDoc and review all the daily pre-coded bills and ensure they are correctly coded.
Then they “publish” them to either Xero or QuickBooks Online.
This is where some real magic happens. Once they hit “publish” the PDF version of the source document is pushed into your accounting software and posted automatically, ready for payment later.
The PDF document is attached to the transaction. In addition, the document can be pushed to Dropbox (or other online storage sites). So now the document is safely stored in 3 placed – HubDoc, Xero or Quickbooks Online, and Dropbox (or other storage site).
For those who want full control of where the docs are, they can synchronize the Dropbox docs with their own computer. Now your docs are residing in multiple, secure sites in the cloud as well as your local computer.
This means you can virtually…
Audit-Proof Your Business
Each transaction inside your accounting software has a PDF source document attached to the transaction. This makes reviewing your transactions a breeze.
One of the pitfalls for most businesses when under audit is to find all the source documents that the auditors are requesting. Now, they are attached to each transaction, and also organized neatly in file folders inside HubDoc.
This not mean you are audit-proof fully by the way. Of course, all the expenses must be incurred for the purpose of earning income, and they need to be coded correctly.
What HubDoc does do though is eliminate the problem of matching and gathering.
The other thing it does is create folders inside Dropbox – automatically – for each vendor and it renames each document very nicely.
No longer do you see strings of undecipherable characters for the name of the doc. It will extract the name of the vendor and the date and re-name it accordingly.
Save Tons of Time
All of this save tons of time. You become virtually paperless with bills being sent directly by the vendor.
You no longer need to scan paper and then upload.
No data entry is required. All you need to do is double check the correct coding.
By the way, I have not had one inaccurate number (mis-reading of the actual numbers) with HubDoc from thousands of documents. That is better than we could expect from human beings doing the same thing!
The posting is a mouse click now, so no entry is required in the accounting software.
No printing and filing documents in filing cabinets saves time and space.
When the controller or you as business owner go to review your own accounts, it saves you time by having all the documents attached to each transaction inside your accounting software!
Now that your bookkeeper has been elevated to a bookkeeper “by exception”, he/she will likely enjoy their work more and this extra step improves accuracy even more.
You see you haven’t eliminated the bookkeeper, you have reduced the need for a data entry clerk.
(What the impact will be on the data entry clerks in India and the Philippines will remain to be seen. They will, over time, certainly have to adapt).
Even Multiple Page Docs Can by Split
Now, HubDoc, with its constant focus on innovation allows for documents to be received that are multiple pages. It will actually split a multi-page document and code each bill separately!
This is another huge time-saver. Before, bills from vendors could not be uploaded in bunches. Each bill had to be separated out.
With HubDoc and a good cloud-based accounting software (Xero or Quickbooks Online) you can achieve many benefits:
- Significant time savings, which means money to you
- More accurate recording of source documents
- Better control of your accounts for accurate recording
- Real-time accounting so your books are kept up-to-date daily
- Documents on-hand so that you can help reduce the pain and time costs of an audit
- Bookkeepers are elevated to higher roles
Thank you for reading…