Quick answer
To record a receipt in Xero, capture the image with Hubdoc, the Xero Me mobile app, or by emailing it to the inbox address attached to your organisation. The image is OCR’d, posted as a draft bill or expense claim, and waits for a human to confirm the supplier, the GL account, and the tax rate. Reconcile the resulting payment against the bank feed to close the loop.
When to use each capture method
Xero offers four practical ways to land a receipt in the ledger. Picking the right one for the transaction type is most of what separates a fast workflow from a slow one.
| Method | Best for | Posts as |
|---|---|---|
| Hubdoc | Supplier invoices and recurring vendor receipts | Draft bill in Accounts Payable |
| Xero Me expense claim | Employee out-of-pocket spend | Expense claim awaiting reimbursement |
| Email-in inbox | Forwarded supplier emails | Draft bill or file in inbox |
| Manual spend money | One-off cash purchases on a credit card | Spend money line on the bank account |
For a regular supplier you pay later, Hubdoc captures the bill, extracts the line items, and pushes it into the Awaiting Approval queue in Accounts Payable. For a coffee a staff member bought on their own card, the Xero Me app produces an expense claim that owes them money. The two flows produce different tax and bank consequences, so they need to be kept separate.
Capturing a receipt with Hubdoc
- Open the Hubdoc tab in Xero or the standalone Hubdoc app.
- Take a photo of the receipt or upload a PDF. Hubdoc emails, scanned uploads, and supplier auto-fetch feeds all arrive in the same inbox.
- Wait for the OCR to populate the supplier, date, total, tax, and (where the receipt itemises) line items. Two to three minutes is typical.
- Confirm the supplier matches an existing Xero contact. New suppliers auto-create on first use.
- Confirm the GL account and the tax rate. Hubdoc remembers the last coding for each supplier, so a recurring vendor only needs to be coded once.
- Click Publish. The bill lands in Xero as a draft awaiting approval.
- Approve the bill from Business, then Bills to pay. Pay or schedule for the due date.
Capturing a receipt with the Xero Me app
The Xero Me app on iOS and Android is the recommended path for employee expense claims. The employee photographs the receipt, picks the project or job, and submits the claim. The claim sits in your expense claims queue for approval. Once approved, the spend is posted against the staff member’s expense account and reimbursed through payroll or a bank payment.
The Xero Me path is the right one whenever the receipt represents money already spent by an individual. Putting employee out-of-pocket on a Hubdoc bill leaves a payable owing to the supplier rather than the employee, which then needs a journal to fix.
Tax coding at capture
The single biggest source of error in this workflow is the tax rate Xero suggests at capture. Hubdoc reads what the supplier printed and proposes a matching rate from your chart of accounts. That works for plain standard-rate receipts, but it does not catch:
- VAT or GST included on the receipt for an item that is actually zero-rated or exempt in your jurisdiction.
- Imports where the supplier did not charge tax but reverse-charge applies.
- Receipts with a mixed-rate line breakdown (food, alcohol, service charge) that need separate codings.
A simple rule that catches most issues: any receipt where the tax line is over 50 pounds or its currency equivalent, or any receipt for a category your firm has historically miscoded, should be reviewed by a senior bookkeeper before publishing from Hubdoc to Xero.
Reconciliation
Once the bill is in Xero and the supplier has been paid, the bank feed brings in a matching debit. Reconcile from the bank account screen by clicking Match against the existing bill. If you skipped the bill step and used Spend Money directly, no matching is needed because the spend money line already sits on the bank account. The audit trail keeps the Hubdoc image attached to the transaction either way.
Common mistakes
- Letting Hubdoc auto-create suppliers without review. The chart of accounts ends up cluttered with one-off contacts and the supplier history is fragmented.
- Posting employee spend through Hubdoc. It produces a payable to the supplier instead of a reimbursement owing to the employee.
- Trusting the OCR’d tax line without checking the underlying rate. Zero-rated and exempt items often get coded at the standard rate because the supplier’s till receipt formatted it that way.
- Leaving receipts as drafts. Hubdoc drafts that are never published do not show in the bank reconciliation, so the spend looks unrecorded.
Software that helps
- Hubdoc is bundled with most Xero subscriptions and is the path Xero markets for AP capture.
- Dext offers richer line-item extraction and is the default at many AU and UK firms.
- ExpenseFlow captures the receipt, applies the right tax code for the jurisdiction, and posts to Xero as a coded bill that is ready to approve, with no further manual coding required.
FAQ
See the answered questions above for capture method choice, tax handling, attachments to reconciled transactions, supplier auto-creation, and offline behaviour.