Things change quickly in business. In just a few years, automated accounting software has gone from being a luxury to a necessity. The government’s Making Tax Digital scheme now requires all VAT-registered businesses to submit their VAT returns digitally using compatible accounting software. In 2024, this requirement will be extended to income tax for many self-employed people and landlords as well.
But accounting software isn’t just for tax returns. Automation reduces errors and increases efficiency, allowing you to focus on more important tasks. There are many software packages on the market, each offering a different range of features and benefits. We have always been big fans of Xero, but it’s not the only option.
Dext has been getting a lot of attention recently, and with good reason. It’s a great piece of software, especially for small businesses. In this blog, we’ll take an in-depth look at Dext and see if it can give Xero a run for its money.
What is Dext?
Dext was originally called Receipt Bank, and this gives you a clue to its main function. It is a cloud-based tool that lets you scan receipts, invoices, bank statements and other financial documents. It then uses optical character recognition to automatically store the data, saving you the effort of entering the details manually.
From this simple premise, Dext has expanded to include a range of impressive features:
- Dext offers 99% accuracy when extracting data from paper documents.
- The Dext app allows you to scan receipts from your phone.
- Dext is fully browser-based, so you don’t have to download anything to your computer.
- Dext learns from your previous activity to categorise data more efficiently and to spot mistakes and discrepancies.
- Dext allows you to give users different levels of access, and to track the activity of each individual user.
How does it compare to Xero?
The most obvious difference between the two products is the price. Each offers a choice of three packages, but Dext is considerably more expensive. Xero will cost you between £12 and £33 a month, while Dext will set you back between £20 and £60.
In terms of functionality, Dext is a more specialised product. Its main focus is on digitising paper documents, although it also offers more traditional features such as generating expense reports. Dext is also smaller in scale, allowing between five and 30 users depending on which package you choose.
Xero is a more generalised product. It covers a wide range of accounting tasks, from creating invoices to reconciling bank transactions. It also has more scope for growth, allowing an unlimited number of users from the same organisation. Finally, it’s worth noting that the more expensive Xero packages give you access to Hubdoc. This is another document scanning app which provides a solid alternative to Dext.
Which package is best for me?
Xero and Dext are both excellent products, so it really comes down to your personal preference. Both packages offer a free trial, so there’s nothing to stop you from testing both and choosing the one you like best.
Also, remember that you don’t have to choose one product over the other. Dext is designed to be integrated with other accounting software, and this includes Xero. If you can afford it, using Dext to scan documents and then feeding them into Xero could be the ideal approach.
If you need advice on choosing accounting software or would like to outsource your accounting to a third party, don’t hesitate to get in touch.