$20,000
Previous annual fee for data entry and bank reconciliation only
$5,000
New annual fee for a full bookkeeping service with optimised systems
$15,000
Annual savings returned to the practice every year
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INDUSTRY:
Healthcare - dental practice -
ISSUE:
Excessive fees for minimal service, costly third-party software replacing free native functionality -
OUTCOME:
$15,000 per year saved, Hubdoc implemented, Xero workflows fully optimised
The Situation
When this dental practice owner reached out, the conversation started with a single concern: his annual bookkeeping bill had reached $20,000 and he was not sure what he was getting for it.
He was still handling his own payroll.
His receipts were being managed through a paid third-party application. And as far as he could tell, his bookkeeper’s primary function was entering transactions into the accounting software and reconciling the bank account — tasks that are fundamental and necessary, but which should not, for a practice of his size, require a fee of that magnitude.
His instinct that something was disproportionate was correct. After reviewing the setup in detail, it became clear that the cost was not being driven by the complexity of the work — it was being driven by the inefficiency of the tools and processes in use.
The bookkeeper was spending a significant portion of their time performing tasks manually that the accounting software was designed to handle automatically, and charging accordingly for every hour spent doing so.
What We Found
1. The scope of service did not match the fee
The starting point of any fee review is establishing exactly what is being delivered for the money charged. In this case, the bookkeeper’s scope was narrower than the client had perhaps appreciated: transactions were being entered, and the bank account was being reconciled. That was the core of the service.
Payroll — a service that many bookkeepers include as a matter of course — was being handled by the practice owner himself. This meant the client was absorbing the time cost of payroll administration personally, while simultaneously paying $20,000 per year for a bookkeeping service that did not include it. The combination of a high fee and an incomplete service scope is the clearest possible signal that a fee review is overdue.
2. Dext was being used but Hubdoc can do the same thing for free
The practice was using Dext — a paid receipt capture and document management application — to photograph, store, and attach receipts to transactions in the accounting software. Dext is a capable product and has legitimate use cases, particularly for businesses with very high receipt volumes or complex multi-currency expense management. For a dental practice with a standard Australian operating profile, it is not necessary.
Xero, which the practice was already using as its accounting platform, includes Hubdoc as a free add-on. Hubdoc performs the same core function as Dext — it captures receipts and supplier documents, extracts the key data, and publishes them directly into Xero for coding and reconciliation. The workflow is clean, the integration with Xero is native and seamless, and for the vast majority of small and medium-sized businesses, it handles everything that Dext does at no additional cost.
The practice was paying a monthly Dext subscription, and the bookkeeper was spending time routing documents through Dext into the accounting system — time that was being billed to the client. Both the software cost and the associated labour cost were avoidable.
3. Xero’s native features weren’t being used
Beyond the receipt management question, a broader review of how the bookkeeper was working within Xero revealed that a number of the platform’s built-in automation and efficiency features were not being used. Xero is designed to reduce repetitive manual work through bank rules, recurring transaction templates, automated matching, and direct supplier data feeds. When these features are configured correctly, the time required to maintain a set of books decreases substantially.
In this case, much of the data entry was being performed manually — transactions were being typed in rather than matched from bank feeds, and rules that would have categorised recurring transactions automatically had not been set up. The result was a process that took significantly longer than it needed to, and a fee that reflected that unnecessary time investment.
What we did
The remediation for this client did not require any complex forensic work or large-scale error correction. The books themselves were broadly accurate. What was required was a complete review and rebuild of the tools and processes in use, replacing costly and inefficient arrangements with the functionality that was already available within the platform the practice had already paid for.
The key steps were:
- Cancelled the Dext subscription and migrated receipt capture and document management to Hubdoc, which is included at no additional cost with the practice’s existing Xero subscription.
- Configured Hubdoc to publish supplier documents directly into Xero with data pre-extracted, reducing the manual handling time for receipts to a fraction of what it had been under the Dext workflow.
- Reviewed and configured Xero’s bank rules to automatically categorise recurring transactions, eliminating the need for manual data entry on a significant proportion of the weekly transaction volume.
- Set up automated bank feeds for all accounts, ensuring that transactions flowed directly into Xero without manual import steps.
- Reviewed the full scope of bookkeeping tasks and established an accurate picture of the time genuinely required to maintain the books each week under the new, efficient setup.
- Reset the fee structure to reflect actual time and scope, bringing the annual cost from $20,000 down to approximately $5,000.
The outcomes
Issue Identified | Resolution & Outcome |
$20,000 annual fee for data entry and bank reconciliation only — payroll not included | Full bookkeeping service delivered at approximately $5,000 per year — a saving of $15,000 annually |
Dext being used for receipt capture at an ongoing subscription cost | Migrated to Hubdoc — included free with Xero — same functionality, zero additional cost |
Receipts being routed manually through Dext, adding unnecessary processing time | Hubdoc publishes directly into Xero with data pre-extracted; receipt handling time reduced significantly |
Xero bank rules and automation features not configured | Bank rules set up for all recurring transactions; manual data entry reduced substantially |
Practice owner handling payroll himself despite paying for a bookkeeper | Payroll reviewed and incorporated into the bookkeeping scope as standard — no additional charge |
No clear picture of whether fees were proportionate to the work involved | Transparent fee structure established based on actual time and task scope |
Why this is important to a healthcare and practice owner
Dental practices, medical clinics, specialist practices, and allied health businesses share a common financial profile. They are typically well-established, professionally run operations with a relatively consistent and predictable transaction structure — regular payroll, recurring supplier invoices, practice management software fees, equipment maintenance, and consumables. The bookkeeping required is real and ongoing, but it is not inherently complex.
What makes these businesses vulnerable to the pattern seen in this case is that the practice owner is almost always a highly trained professional whose time is consumed entirely by clinical work. They have neither the time nor the inclination to scrutinise bookkeeping fees in detail, and they are accustomed to paying professional service fees without questioning them.
A bookkeeper who understands this dynamic, and who charges accordingly without any corresponding commitment to efficiency or value, can sustain a disproportionate fee arrangement for years without it being challenged.
The right bookkeeping arrangement for a professional practice should be one where the bookkeeper actively looks for ways to reduce the time and cost involved — through better tools, smarter workflows, and a clear understanding of what the platform they are using is actually capable of. A bookkeeper who is not doing this is, in effect, charging you for inefficiency that serves their interests rather than yours.
Key Takeaways for business owners
- If your bookkeeper uses a paid third-party application for a function that your accounting software already performs natively, ask why. In many cases the answer is habit or familiarity rather than necessity.
- Hubdoc is included free with Xero subscriptions and handles receipt capture and supplier document management for the vast majority of Australian small businesses. If you are paying for Dext and using Xero, this is worth reviewing.
- Xero’s bank rules, automated matching, and recurring transaction features are designed to reduce manual data entry. If these are not configured, your bookkeeper is spending more time than necessary — and billing for it.
- A bookkeeper who handles only data entry and bank reconciliation, while you manage your own payroll, is not delivering a complete service. A full-scope bookkeeping arrangement should include payroll as standard.
- A fee review does not require conflict. A straightforward conversation about what is being done, how long it takes, and what tools are in use is enough to establish whether the fee is proportionate — and most business owners who ask the question find it was worth asking.
Is Your Business in a Similar Position?
If you are concerned about the accuracy of your current bookkeeping, have unreconciled accounts, or simply are not sure whether your financial records are in the condition they should be, we offer a free initial consultation.
We will assess your current situation honestly and give you a clear picture of what needs to be done.
