The Role of Automation in MTD
How to use tools like AutoEntry to digitise paper receipts and reduce manual entry errors
For many self-employed individuals and landlords, the most daunting part of Making Tax Digital is the thought of moving away from paper receipts. But automation tools like AutoEntry can turn this challenge into an advantage. Using AI‑powered Optical Character Recognition (OCR), these tools digitise paper receipts, extract the key data, and send it directly into your MTD‑compatible accounting software—reducing errors, saving hours of manual entry, and keeping you compliant throughout the year.
The Paper‑Receipt Problem Under MTD
Under MTD for Income Tax, you are not required to scan and store images of your receipts. However, every transaction must be recorded digitally—you cannot simply keep paper records and rely on a year‑end manual entry[reference:0]. If you still rely on a shoebox of crumpled receipts, you face three major risks:
- Time loss: manually typing every receipt into a spreadsheet or software is incredibly time‑consuming.
- Data‑entry errors: each keystroke is an opportunity for a mistake—wrong supplier, wrong date, or wrong amount.
- Non‑compliant digital links: HMRC requires digital links between your records and your submissions; manual re‑keying breaks the rule, even if the figures are correct[reference:1].
That is where automation transforms the process.
What Is AutoEntry and How Does It Work?
AutoEntry is a cloud‑based data‑capture platform, owned by Sage, that automates the extraction of financial data from invoices, receipts, expenses, and bank statements[reference:2]. It uses AI and OCR technology to read the relevant information—supplier name, date, VAT, and total—and turns it into structured, usable data that is ready to be published into your MTD‑compatible accounting software[reference:3][reference:4].
With up to 99% accuracy[reference:5], AutoEntry checks for duplicate documents, ensures that the figures add up, and can even identify potential anomalies before the data reaches your books[reference:6].
How AutoEntry Fits Into Your Digital Stack
AutoEntry is designed to work as the first step in your digital record‑keeping chain. It seamlessly integrates with all major MTD‑approved accounting platforms, including:
| Platform | Integration Type |
|---|---|
| Sage (including Sage Accounting and Sage 50) | Direct one‑click publishing[reference:7] |
| Xero | Seamless two‑way sync[reference:8] |
| QuickBooks | Easy integration via the AutoEntry app[reference:9] |
| FreeAgent | Smooth, user‑friendly connection[reference:10] |
| Kashflow and others | Full API support[reference:11] |
If you are not yet using cloud accounting, AutoEntry also offers an AccountsPrep feature that creates digital records for clients who still rely on spreadsheets or paper records, bridging the gap until they are ready to move fully into the cloud[reference:12].
From Paper Receipt to Digital Record: The Automated Workflow
Step 1
Capture
Snap a photo with the AutoEntry mobile app, scan with a document scanner, or forward an emailed receipt to your AutoEntry account[reference:13].
Step 2
Extract
OCR technology reads the receipt and auto‑populates the key fields: supplier, date, VAT and total amount[reference:14].
Step 3
Review
Quickly scan the pre‑filled data, choose a category, and correct any misreads (rare).
Step 4
Publish
With one click, the transaction is posted directly into your connected MTD accounting software—fully digital and audit‑ready.
Because the software automatically creates a digital record for HMRC and preserves the original image, you maintain a clear audit trail without any manual re‑keying, and the digital link rule is satisfied effortlessly.
Reducing Errors and Saving Time
- 90–99% fewer manual data entry mistakes – thanks to AI‑powered OCR and machine learning[reference:15].
- Up to 40 hours saved each year – typical MTD users spend far less time on data entry compared to pre‑MTD practices[reference:16].
- No more lost or unreadable receipts – the original image is saved digitally alongside the transaction.[reference:17]
- Duplicate prevention – AutoEntry automatically checks for duplicate invoices and receipts before they reach your books.[reference:18]
Before automation: A sole trader spends 8 hours a month manually entering receipts and cross‑checking totals. After a long day, a tired typo mis‑records a £2,500 materials bill as £250, leading to an under‑declared profit.
After adding AutoEntry: Snap each receipt at the trade counter, let the software pull the data, and review for a few minutes each week. The £2,250 error is eliminated, the time saved is redirected to chargeable work, and the business is always MTD‑ready.
Other Automation Tools to Consider
AutoEntry is a market leader, but it is not the only option. Here are a few alternatives to consider:
| Tool | Best For |
|---|---|
| Hubdoc (owned by Xero) | Xero users wanting a fully integrated receipt and bill‑capture tool. |
| BrightCapture (by Bright) | Accountants who need to help non‑digital clients digitise their paperwork[reference:19]. |
| Veryfi | Businesses requiring SOC2‑certified, highly secure OCR capture[reference:20]. |
Many modern MTD software platforms also bake receipt capture directly into their apps. In March 2026, Xero rolled out AI‑powered data capture and extraction for UK customers at no extra cost, allowing users to snap a photo of a receipt and have the software read the data in under 20 seconds[reference:21].
Integrating Automation Into Your Practice
For accountants, automation tools are not just about compliance—they are a growth engine. Bringing in automation to handle the drudgery of data entry and chasing receipts allows you to refocus your team on the high‑value work that clients truly appreciate.
- Standardise your onboarding: Make AutoEntry (or a similar tool) part of your standard client onboarding package, clearly explaining how it benefits them and how you will use the data.
- Educate your clients: Show them how to snap a receipt with the mobile app and reassure them that it saves them time and reduces the risk of errors.
- Set up visibility: Create a group in AutoEntry so you can see which clients have submitted their paperwork and who is falling behind, enabling proactive outreach before deadlines loom.[reference:22]
- Review and reconcile: Use the categorised, verified data in your accounting software to produce quarterly MTD submissions with confidence, knowing the digital link is intact.
Automation tools like AutoEntry naturally create a digital link between the receipt image and the transaction entry, as well as between the transaction and your MTD submission. Manual processes such as copy‑paste or re‑typing break that link, even if the numbers are correct.[reference:23]
Common Questions About Automation
? Is AutoEntry HMRC‑approved?
AutoEntry itself is a data‑capture tool, not a full accounting platform. However, it is designed to integrate with HMRC‑recognised MTD software such as Xero, Sage, and QuickBooks—so your records remain fully compliant.[reference:24]
? Do I need to scan every receipt to be MTD‑compliant?
No. HMRC does not require you to scan or store images of your paper receipts[reference:25]. However, the transaction data must be recorded digitally. Using an automation tool is the simplest and most accurate way to achieve that.
? How much does AutoEntry cost?
AutoEntry offers a range of subscription plans starting from a low monthly fee, with a free trial period available. Visit autoentry.com for the most up‑to‑date pricing.
? What if some receipts are too old or faded to read?
In those cases, you can manually enter the data into AutoEntry or directly into your accounting software. The tool still provides a digital container for the transaction, preserving the required record.
? Can I use AutoEntry for both VAT and Income Tax?
Yes. AutoEntry extracts VAT‑related data automatically, making it equally useful for businesses that are already VAT‑registered under MTD for VAT and those that are now moving into MTD for Income Tax.
? Is manual entry still allowed if I use automation?
Manual entry is allowed, but it is inefficient and riskier. Once you experience the time‑saving and error‑reducing benefits of automation, you will not want to go back.
Your Automation Action Plan
Week 1
Sign up for a free trial of AutoEntry or another tool and test it with your recent receipts.
Week 2
Connect the tool to your MTD accounting software and run a test publication of a few receipts.
Week 3
If you work with an accountant, grant them access and establish a routine for reviewing categorised data.
Ongoing
Make it a daily habit to snap receipts on the go. Let the automation handle the boring work while you focus on running your business.
- ☐ Understand HMRC’s digital record rules—data must be digital, but images of receipts are optional[reference:26]
- ☐ Choose an automation tool (AutoEntry, Hubdoc, BrightCapture etc.) that integrates with your MTD software
- ☐ Connect the tool to your accounting package and test the workflow
- ☐ Train yourself (and your team) on the mobile app to capture receipts at the point of sale
- ☐ Set a weekly time to review and categorise extracted data
- ☐ Enjoy the peace of mind that comes from accurate, audit‑ready digital records
Need Help Setting Up Automation for Your Business?
Switching to automated receipt capture can feel daunting, but the time saved and the stress avoided make it more than worthwhile. Our team can help you choose the right tool, connect it to your existing software, and create a simple workflow that keeps you MTD‑compliant without the manual headache.
Book Your Automation ConsultationReferences
1. AutoEntry. (2026). Digital receipt apps: Guide for accountants and businesses. Available at: https://www.autoentry.com []
2. AutoEntry. (2026). Simplify Making Tax Digital with Automated Data Entry. Available at: https://www.autoentry.com []
3. AutoEntry. (2026). AutoEntry 2026: Benefits, Features & Pricing. Available at: https://www.softwareadvice.com []
4. AutoEntry Help Center. (2026). What accountancy packages does AutoEntry integrate with? Available at: https://help.autoentry.com []
5. Xero. (2026). Xero to bring AI-powered data capture and extraction into platform ahead of Making Tax Digital. Available at: https://www.xero.com []
6. Bright. (2026). How BrightCapture eliminates shoeboxes of receipts for MTD IT. Available at: https://brightsg.com []
7. Azets. (2026). MTD for Income Tax: What does best practice digital record keeping look like? Available at: https://www.azets.com []
8. Armstrong Watson. (2026). MTD for Income Tax: Digital record keeping and compliance. Available at: https://www.armstrongwatson.co.uk []
