Xero Just Launched Native AI Data Capture: What It Means for Accounting Firms

Xero now reads your clients' bills for you. On 2 July 2026 it launched Smart Document Capture, and on 18 September it renamed Files to Documents and added tax rate extraction. So the question firms keep asking is fair: do you still need Dext, Hubdoc or AutoEntry?

Quick answer: Xero's built-in capture (Smart Document Capture, found under Accounting > Documents) uses Xero's AI, JAX, to read uploaded bills, receipts and credit notes. It pulls out the supplier, date, amounts, line items and local tax rate in about 30 seconds. It then helps you create a transaction and can match the document to an existing one, all for you to review. It is included in Xero's plans, works inside one Xero organisation at a time, and does not yet read bank statements. Dext, Hubdoc and AutoEntry are separate capture tools. All three publish to QuickBooks Online as well as Xero, and all three handle bank statements today.

We make tofu, a capture tool that competes with all four, so weigh our view with that in mind. Every competitor fact below links to the vendor's own page, and we checked each one in September 2026.

What does Xero's built-in capture do?

Smart Document Capture is Xero's own document reader. Your client snaps a receipt in the Xero Accounting app, forwards an email, or uploads a file. JAX reads the document and has the data ready for review in "approximately 30 seconds", according to Xero's launch post. Before this, Xero says, a document could take up to 24 hours to be ready.

Here is what Xero says it does today:

• Reads the whole document, including "multi-line, itemised extraction" for things like rental statements and itemised receipts.
• Extracts your local tax rate from the document (added 18 September 2026).
• Handles credit notes as well as bills and receipts.
• Matches documents to existing transactions, with a toggle to switch auto-matching on or off.
• Spots existing transactions and combines them with the document, which Xero says helps you avoid duplicates.
• Learns from you over time, in Xero's words, "so you get richer, more complete data with fewer corrections needed".

Xero's UK pricing page lists smart document capture in all four plans (Ignite £18, Grow £39, Comprehensive £55 and Ultimate £70 a month, before VAT). There is no separate fee.

What's changed since we first wrote about it?

Our first version of this post covered an early rollout that read header fields only. That picture is out of date. Xero now claims line items and tax rates, and it has put a roadmap in public. Here are the dates that matter.

Document chasing is the one to watch if you run a practice. Xero says JAX will "automatically identify transactions missing a receipt". If it works as described, it takes one of the dullest month end chores off your team.

Xero capture vs Dext, Hubdoc and AutoEntry

This table sticks to what each vendor publishes. Where a vendor doesn't say, we've written "not published" rather than guess.

A few notes on the rows. Dext's help centre lists bank statement extraction, supplier rules and auto-publish in Practice Essentials. Its US pricing page lists line item extraction on both Essentials and Advanced, with custom AI Assist guidance on Advanced only. Xero's help centre has an article on resolving bank statement extraction in Hubdoc. Dext's July 2026 release log moved AI Assist into the main sidebar and added ad hoc approvals. AutoEntry keeps unused credits for 90 days and allows a 200% overdraft by default.

Is Xero's capture good enough for an accounting firm?

For a simple client, often yes. Think of a sole trader on Xero with 40 English bills a month and a live bank feed. Xero's capture is free, it sits where the books live, and it now reads line items and tax. Adding a paid tool for that client is hard to justify.

The gaps show up when you look across a whole practice:

• Many clients, one queue. Xero's capture works inside each organisation. Your team opens each client in turn. Dext's Practice Advanced plan adds a client list with practice insights, and tofu covers unlimited entities under one account.
• Bank statements today. Xero lists bank statement extraction as a future feature. If your clients send PDF statements because feeds are patchy, you need something now.
• Other ledgers. Xero's capture only posts to Xero. Most firms also carry QuickBooks, Sage or local ledgers.
• Languages and handwriting. We couldn't find a published language list for Xero's capture. Firms with Chinese, Arabic or Thai invoices should test before they switch.

Will the AI understand context?

We hear this question often on calls, and it is the right one. Reading a receipt is the easy part. Knowing that a supermarket receipt from one client is office stationery, not groceries, is the hard part.

Xero's answer is supplier rules, which are promised "in the coming months", plus JAX learning from your corrections. Dext offers supplier rules today, and AutoEntry's pricing page lists custom categorisation rules. tofu builds a knowledge engine per client entity, starting from that client's Xero coding history and learning from each correction you make.

Whatever you pick, firms we speak to keep manual review switched on at first. That is sensible. Let the tool earn your trust on a few hundred documents before you let anything auto-publish.

Is client data used to train the model?

Ask every vendor this in writing. Xero says JAX "learns from you over time", which tells you corrections shape results. It doesn't tell you where that learning is stored or shared, so check Xero's privacy terms for your region.

For tofu, our trust centre says we "never use customer data to train third-party LLMs". tofu is also GDPR compliant and ISO 27001 certified.

Is Hubdoc going away?

We've seen the rumour, and we can't find anything to back it. Xero hasn't said Hubdoc is being discontinued. Its UK pricing page says Hubdoc "is included in Xero Simple, Ignite, Grow, Comprehensive and Ultimate plans" when connected to a Xero subscription. Hubdoc's own site still sells it at $12 (USD) a month.

What is clear is where Xero's effort is going. Every Xero capture announcement we found in 2026 has been about Smart Document Capture and JAX, not Hubdoc. If you run Hubdoc across your client base, keep using it, but test Documents on a few clients so you're ready either way.

Where tofu fits

tofu is a document capture and data-entry layer. It is not a ledger, so your clients stay in Xero or wherever their books live. It reads invoices, receipts and bank statements in 200+ languages, handwriting included. It extracts every line item on every plan, codes each line to the client's accounts and tax rates, and publishes to Xero, QuickBooks Online, Sage Business Cloud, Zoho Books and Bukku. Other ledgers get CSV or Excel exports.

Where it doesn't fit: a single Xero client with simple bills and a working bank feed. Xero's own capture covers that for free, and we'd tell you so on a call.

Where it does fit: firms running dozens or hundreds of clients across more than one ledger, with PDF bank statements and multilingual paperwork. Pricing is by entry, not by client. A bill counts once however many pages it has, bank statements count per page, and users and entities are unlimited.

WLP, a Singapore Xero Platinum Partner, tried Receipt Bank, Hubdoc and two other tools over twelve years before moving to tofu. Bank statement pages that took 10 to 15 minutes of Excel entry now take under two minutes. The deciding factor wasn't speed, though. Read the full WLP case study.

"The key thing for me is my colleagues adopting it. That is the main thing."

Li Han Tan, Co Founder, WLP

Start a free trial and run a month of one client's documents through it, or see pricing first. For a side by side on the other tools, see tofu vs Dext, Dext vs Hubdoc for firms and our roundup of bank statement extraction tools.

Frequently asked questions

What is Xero Smart Document Capture?

Smart Document Capture is Xero's built-in AI document reader, powered by JAX. Clients or staff upload bills, receipts and credit notes through the Xero app, email or direct upload. JAX extracts the data, including line items and tax rates, in about 30 seconds and drafts a transaction for review. It lives under Accounting > Documents.

Where did Files go in Xero?

On 18 September 2026 Xero renamed Files to Documents and moved it from the Organisation menu to the Accounting menu. Smart Document Capture lives there. Your stored files did not go anywhere.

Does Xero's AI capture extract line items?

Yes. Xero's July 2026 launch post describes "multi-line, itemised extraction" that handles documents like rental statements and itemised receipts line by line. Tax rate extraction followed in September 2026.

Can Xero's capture read bank statements?

Not yet. Xero lists bank statement extraction as a future feature for Smart Document Capture, with no date. Hubdoc, Dext, AutoEntry and tofu handle bank statements today.

Is Smart Document Capture free?

It is included in Xero's subscription plans, with no separate fee. In the UK, Xero's pricing page lists it on Ignite, Grow, Comprehensive and Ultimate.

Is Hubdoc being discontinued?

Xero has not announced that. Its UK pricing page says Hubdoc is included in Xero plans when connected to a Xero subscription, and hubdoc.com still sells it standalone. Xero's new capture work is going into Smart Document Capture, so it is worth testing both.

Does Xero's capture work in every country?

Xero says Smart Document Capture is available in most markets and is rolling out in beta in Australia and New Zealand. Tax number validation is planned for the UK and Australia only.

Should my firm drop Dext or AutoEntry for Xero's capture?

For simple single-ledger clients on Xero, it may be enough. Keep a dedicated tool if you need bank statement extraction today, one queue across many clients, ledgers other than Xero, or supplier rules right now.

Sources

• Faster record-keeping with smart document capture, Xero Blog, 2 July 2026
• Files is now called Documents, Xero Blog, 18 September 2026
• Xerocon London 2026, Xero Blog, 8 July 2026
• Xero UK pricing update, Xero UK
• Hubdoc pricing, Hubdoc
• Dext release logs, Dext
• Dext plans for accountants and bookkeepers, Dext Help Centre
• Dext partner pricing, Dext
• AutoEntry pricing, AutoEntry
• Resolve issues with bank statement extraction in Hubdoc, Xero Central
• tofu pricing and Xero integration, tofu
• tofu trust centre FAQ, tofu

Checked against Xero, Hubdoc, Dext, AutoEntry and tofu pages in September 2026.