You know the feeling. There's a shoebox (or a drawer, or a folder on your phone) stuffed with receipts. There's a stack of supplier invoices that need entering into your accounts. You've been putting it off for days. Maybe weeks.
Here's the thing: 86% of small businesses still enter invoice data manually. That's thousands of hours collectively wasted on work that a machine could do faster and more accurately.
The good news? AI can now handle most of this for you. Not in some far-off future - right now, with tools that are affordable and genuinely easy to use.
The Real Cost of Manual Data Entry
Processing a single invoice by hand takes somewhere between 10 and 30 minutes. Find the document. Read the details. Type them into your accounting software. Double-check the numbers. File the original.
If you handle 50 invoices a month - not unusual for a busy tradesperson or small business - that's 8 to 25 hours of your time. Every single month.
And errors? They compound. A misread digit. A transposed number. Suddenly your books don't balance, and you're spending even more time hunting for the mistake.
When you factor in labour costs, manual invoice processing runs roughly £10–£16 per document. That's money you're essentially setting on fire.
Those hours could be spent on actual work. Or, here's a thought - having an evening off.
What AI Document Processing Actually Does
The concept is simple: you give the AI a photo or PDF of a document, and it "reads" it for you. It pulls out the key information - date, supplier name, amounts, VAT - and organises it neatly.
You might have heard of OCR (optical character recognition). It's been around for years. The problem was, old OCR was clunky. It could read text, but it didn't understand what it was looking at.
Modern AI is different. It understands document structure. It knows that the number at the bottom is probably the total. It recognises invoice layouts from different suppliers without needing templates.
The best tools process an invoice in seconds - with 95% or better accuracy. Compare that to 10-30 minutes of manual typing.
How It Works in Practice
Step 1: Capture. Snap a photo with your phone, or forward a PDF from your email. Some tools can pull invoices from your inbox automatically.
Step 2: AI extracts the data. Within seconds, it identifies the date, supplier, line items, amounts, and VAT. No templates needed - it adapts to different formats.
Step 3: Review and confirm. You give it a quick glance. Usually it's spot-on. If something needs adjusting, it takes seconds to fix.
Step 4: Export or sync. The data goes straight into your accounting software or spreadsheet. No retyping required.
What used to take an evening now takes a few minutes.
What Tools Are Available?
You've got options at different price points:
Built into your accounting software. Xero, QuickBooks, and FreeAgent all have receipt scanning built in. If you're already paying for one of these, you might have this feature and not even know it.
Dedicated scanning tools. Dext (formerly Receipt Bank) and AutoEntry are popular with small businesses and accountants alike. They typically cost around £20–£30 per month and handle high volumes well.
Custom AI solutions. For businesses with specific needs - unusual document types, complex workflows, or integration requirements - custom AI document processing can be built to match exactly how you work.
Before and After: A Quick Example
Let's say you're an electrician or plumber. Every week you're collecting receipts from suppliers, fuel stations, and tool purchases. Maybe 30-40 documents a month.
Before automation: You spend 5-8 hours each month entering receipts. Errors creep in. Your accountant flags discrepancies weeks later. Tax season fills you with dread.
After automation: You snap each receipt as you get it - takes five seconds. The AI extracts everything instantly. At month-end, you spend 30 minutes reviewing a clean spreadsheet and clicking "approve."
That's roughly 6 hours a month back in your pocket. Over a year? 70+ hours. Almost two full working weeks.
Common Concerns (Answered Honestly)
"Is it accurate enough?" With well-scanned documents, 95% or better. You should still review - but the AI does 95% of the work. You're checking, not typing.
"What about handwritten receipts?" AI is improving here, but it's not perfect. Printed text and PDFs are where it really shines. Handwritten notes may still need manual entry.
"Is my data safe?" Reputable providers use encryption and are GDPR compliant. Always check a provider's credentials before signing up.
"I'm not techy - can I use this?" The basic tools are dead simple. Take a photo, send an email. Done. More complex setups (connecting multiple systems, custom workflows) might benefit from professional help initially.
Is It Worth It for a Small Business?
If you spend more than 2 hours a month on data entry, almost certainly yes.
A £25/month tool that saves you one hour of admin has already paid for itself. Two hours saved and you're in profit.
Fewer errors means fewer headaches when HMRC comes asking questions.
And if you're already automating other parts of your business, document processing is a natural next step.
Getting Started
Start small. Pick one document type - maybe supplier invoices, or fuel receipts. Set up a tool with a free trial. Get comfortable with it.
Once you see how much time it saves, you'll want to expand. Add more document types. Connect your accounting software. Set up automatic email processing.
If you'd rather someone else handle the setup, that's exactly what our AI document processing service is for. We build custom solutions that fit your workflow - from £79 per month.
Frequently Asked Questions
How accurate is AI invoice processing?
Modern AI tools achieve 95%+ accuracy on clearly scanned or photographed documents. You should still do a quick review, but the vast majority of the work is done for you. Accuracy improves with printed documents and good-quality PDFs.
What tools can I use to automate receipt and invoice data entry?
Popular options include Dext (formerly Receipt Bank), AutoEntry, and built-in features in Xero, QuickBooks, or FreeAgent. For complex needs, custom AI document processing solutions can be built to match your workflow.
How much does invoice automation cost?
Basic receipt-scanning tools start from around £20–£30 per month. Many accounting platforms include scanning in existing plans. Custom AI solutions start from around £79 per month.
Do I need technical skills to set this up?
Not for basic tools. Most are as simple as taking a photo with your phone. Advanced setups connecting multiple systems may benefit from professional help with initial configuration.
Can AI handle invoices in different formats from different suppliers?
Yes. Modern AI-powered tools adapt to different layouts automatically, understanding invoice structure rather than looking for data in fixed positions.