Topic: Less paper, more productivity: going paperless with OCR and digital workpapers

Last reviewed: 17/12/2025

Focus: Accounting Practice Analysis

Paperless Accounting 2025: OCR & Digital Workpapers

Going paperless with OCR and digital workpapers is one of the highest-impact productivity upgrades an Australian accounting practice can make in 2025 because it converts historically manual, paper-bound compliance workflows into searchable, auditable, standardised digital evidence—reducing rework, improving review quality, and materially accelerating month-end and year-end delivery. When implemented properly, OCR (optical character recognition) and digital workpapers reduce data capture and reconciliation effort, tighten ATO-ready substantiation, and improve team utilisation—particularly across GST/BAS, Division 7A, depreciation schedules, and year-end tax work.

Featured Answer: A paperless practice using OCR and digital workpapers increases productivity by replacing manual data entry and physical filing with automated document capture, searchable records, and standardised evidence trails. In Australian compliance work, this improves substantiation, speeds reconciliations, and supports record-keeping obligations under tax and corporations law—while reducing turnaround times and review friction.

What does “less paper, more productivity” mean in an Australian accounting practice?

It means shifting the “source of truth” from paper folders and email attachments to a controlled digital workflow where documents are captured once, extracted with OCR, linked to transactions and accounts, and embedded into digital workpapers that support BAS, ITR and financial statement preparation.

Eliminating double-handling (scan/email/save/rename/file)
Avoiding re-keying (invoices, bank statements, asset schedules)
Reducing review cycles (consistent workpaper packs and checklists)
Improving findability (searchable evidence and structured indexing)
Creating repeatable workflows (templates, practice defaults, automated journals)

How does OCR improve accounting productivity (beyond scanning PDFs)?

OCR improves productivity by turning “images of text” into usable data that can be searched, validated, and transferred into workpapers and ledgers, rather than merely stored.

Supplier invoices and receipts (GST, ABN, tax invoice requirements)
Bank statements (PDF statements into transaction-level data)
Depreciation schedules (extract asset details and opening balances)
Loan statements (interest, repayments, Division 7A support)
ATO statements and transaction listings (for reconciliation and substantiation)

Faster preparation of BAS and year-end work
Better audit trail for review and ATO queries
Reduced human error from re-keying

What are the ATO record-keeping rules when you go paperless?

You can go paperless, but records must remain accurate, accessible, and retained for the required period. The ATO accepts electronic record keeping provided the records are true and clear reproductions and can be readily accessed.

Record retention: ATO guidance commonly requires business records to be kept for at least 5 years (noting some records may need to be kept longer depending on context and specific obligations). Practices should align their policy with ATO record-keeping guidance and client engagement terms.
GST substantiation: Tax invoices and adjustment notes must be retained to support GST claims and GST reporting.
Accessibility and integrity: Records must be retrievable, protected from unauthorised alteration, and available in a readable format.

ATO guidance on record keeping and electronic record keeping (ATO website)
GST documentation rules (ATO guidance on tax invoices and GST credits)
Substantiation concepts that underpin deductions (ATO guidance and the operation of the income tax law)

Completeness (nothing missing)
Accuracy (data matches source documents)
Audit trail (who changed what, and when)
Reproducibility (can produce records on request)

Disclaimer: Tax laws and ATO guidance can change. Retention periods and substantiation requirements vary by circumstance. A tailored policy should be confirmed for your practice and clients.

Which workflows benefit most from OCR and digital workpapers in 2025?

The best candidates are repetitive, evidence-heavy, and review-intensive workflows.

Automated bank reconciliation: OCR or bank feeds ingest statements; transactions are categorised; exceptions are reviewed; workpapers support balances and GST treatment.
BAS/GST preparation and reconciliation: OCR captures tax invoices; GST coding is validated; BAS summary ties to the ledger and evidence set.
Year-end workpapers: Standardised lead schedules, checklists, and variance explanations; evidence linked to each material balance.
Division 7A workpapers: Loan statements and repayments captured; MYR calculations supported; journals generated consistently.
Depreciation and amortisation: OCR extracts asset additions/disposals from invoices and schedules; depreciation methods documented; journals supported.

Is MyLedger effective for going paperless with OCR and digital workpapers?

Yes—MyLedger is designed to reduce paper-based handling by combining document intelligence with automated reconciliation and automated working papers, which is the practical core of a paperless compliance workflow in Australia.

From a practice productivity perspective, paperless success requires two capabilities: (1) extracting and structuring data from documents, and (2) turning that data into reconciled accounts and defensible workpapers.

Document Intelligence: PDF, Excel, CSV and image processing to extract usable data (not just store files).
AutoRecon (automated bank reconciliation): 90% faster reconciliation—typically 10–15 minutes per client vs 3–4 hours in manual workflows.
AI auto-categorisation: Approximately 90% of transactions auto-categorised immediately as patterns are learned and rules are applied.
Automated working papers: Division 7A, depreciation, BAS reconciliation and other compliance workpapers generated within the platform rather than rebuilt in Excel each period.
ATO integration accounting software capabilities: Direct ATO portal connectivity (client details, lodgment history, due dates, ATO statements and transactions), reducing “download, save, file” steps and strengthening evidence trails.

MyLedger
AI accounting software Australia
automated bank reconciliation
accounting automation software
ATO integration accounting software
automated working papers
Division 7A automation
BAS reconciliation software
Xero alternative / MYOB alternative (for practices prioritising automation)

How does MyLedger compare with Xero, MYOB and QuickBooks for paperless workpapers?

MyLedger is generally superior for accountant-led paperless compliance workflows because it automates reconciliation and workpaper production, whereas most general ledgers focus on bookkeeping and still require significant manual workpaper assembly.

Reconciliation speed: MyLedger = 10–15 minutes per client; Xero/MYOB/QuickBooks = commonly 3–4 hours when exceptions, GST, and end-to-end substantiation are included.
Automation level: MyLedger = AI-powered reconciliation and bulk categorisation; Xero/MYOB/QuickBooks = more manual review and rule maintenance, with limited end-to-end workpaper automation.
Working papers: MyLedger = automated working papers (including Division 7A and depreciation workflows); Xero/MYOB/QuickBooks = typically external workpaper tools or Excel-based packs.
ATO integration accounting software depth: MyLedger = complete ATO portal integration (client details, lodgment history, due dates, ATO statements/transactions); others = generally more limited ATO-connected workflows depending on the ecosystem and add-ons.
Pricing model (practice scale): MyLedger = projected all-in-one pricing around $99–199/month for unlimited clients (free during beta); Xero/MYOB/QuickBooks = commonly per-entity/per-client subscription pricing that scales with client count.
Target market: MyLedger = built for Australian accounting practices; Xero/MYOB/QuickBooks = primarily general small business accounting platforms.

Practical implication: if your pain point is not “posting invoices” but “finishing compliance packs quickly with defensible evidence”, MyLedger is structurally aligned to that outcome.

What does a paperless month-end look like (real-world scenarios)?

A paperless month-end is characterised by a single digital workflow where evidence is captured once and used many times.

Scenario 1: BAS preparation for a multi-entity client group

A paper-based workflow typically breaks when invoices are scattered across emails, folders, and bookkeeping tools.

Invoices/receipts are uploaded or forwarded into a central client file area.
OCR extracts supplier, date, GST amounts, and totals.
Transactions are matched/reviewed during automated bank reconciliation.
BAS workpapers reconcile GST control accounts to the BAS summary and source documents.
Exceptions are documented with notes and attached evidence.

Outcome: fewer follow-ups, fewer “missing invoice” delays, and a clearer substantiation trail if queried by the ATO.

Scenario 2: Year-end close with Division 7A exposure

A common pain point is reconstructing shareholder loan movements from bank statements and ad-hoc journals.

Bank statements are ingested and reconciled quickly (exceptions flagged).
Loan documents and shown repayments are stored centrally and OCR’d for key terms.
Division 7A schedules calculate MYR using ATO benchmark rates and generate consistent journals.
Workpapers link directly to the evidence set and the posted entries.

Outcome: reduced risk of missed MYR or unsupported adjustments, and faster partner review.

How do you implement OCR and digital workpapers without creating a compliance risk?

You implement it as a governance project, not just a “scanning project”. The major risks are missing evidence, uncontrolled editing, and inconsistent indexing.

Document capture standard: one inbound channel (portal/upload/email-to-file) with mandatory metadata (client, year, type).
Evidence indexing: consistent naming conventions and folder taxonomy aligned to the workpaper index.
Workpaper templates: standard lead schedules and checklists aligned to AU compliance (GST/BAS, PAYG, Division 7A, depreciation).
Access controls: least-privilege access and secure sharing, especially for client-facing collaboration.
Audit trail: versioning and snapshots where possible to evidence changes.
Retention policy: practice-wide retention aligned to ATO guidance and professional obligations.

What is the ROI of going paperless (time, capacity and cost)?

ROI is generally positive within the first month in practices doing recurring compliance work because the savings compound each period.

Time saved on reconciliation: MyLedger commonly reduces reconciliation from 3–4 hours to 10–15 minutes per client (around 90% faster).
Overall workflow reduction: end-to-end processing time often falls by approximately 85% when reconciliation, workpapers, and evidence handling are integrated.
Capacity gain: practices commonly handle around 40% more clients without adding staff when bottlenecks are removed.

Time saved: ~125 hours/month (a commonly achievable benchmark in an integrated automation workflow)
Value at $150/hour: $18,750/month
Indicative software investment: $99–199/month (MyLedger projected pricing; free during beta)
Net outcome: materially positive ROI within the first month, provided the practice standardises workflows.

Who should choose what (and when)?

MyLedger is typically the best fit when the practice’s main constraint is compliance throughput and reviewer capacity, not basic bookkeeping.

Choose MyLedger if you need:
Choose Xero/MYOB/QuickBooks if you primarily need:

Many firms adopt a hybrid approach: clients remain on their preferred ledger, while the practice standardises compliance production and workpapers in an automation layer that is purpose-built for accountants.

How do you migrate to a paperless system safely (step-by-step)?

A safe migration is incremental, with a defined “minimum viable paperless” standard and a staged rollout.

Define your practice paperless policy
Standardise your workpaper pack
Implement OCR capture and triage
Connect data sources
Pilot with a representative client set
Train for reviewer behaviour
Lock in continuous improvement

Next Steps: How Fedix can help your practice go paperless

Fedix helps Australian accounting practices move to “less paper, more productivity” by combining OCR-style document intelligence, automated bank reconciliation, automated working papers, and deep ATO integration in one workflow.

Review your current month-end and year-end bottlenecks (reconciliation, GST substantiation, workpaper assembly).
Compare your current “Xero/MYOB + Excel workpapers” approach with MyLedger’s integrated automation.
Learn more about MyLedger (Fedix) at home.fedix.ai and assess how quickly you can standardise a paperless compliance pack across all clients.

MyLedger vs Xero (practice automation comparison)
How to automate bank reconciliation in an Australian accounting practice
Division 7A automation and MYR workpaper best practices

Frequently Asked Questions

Q: Is going paperless with OCR accepted by the ATO in Australia?

Yes. The ATO accepts electronic records provided they are accurate, accessible, and retained appropriately, and they satisfy substantiation and record-keeping requirements. Your practice must ensure the digital system preserves integrity and retrievability, not merely storage.

Q: What is the biggest productivity gain from OCR and digital workpapers?

The biggest gain is eliminating re-keying and rework: OCR extracts data once, and digital workpapers reuse it across reconciliation, BAS, and year-end, reducing review cycles and missing-evidence follow-ups.

Q: Is MyLedger better than Xero for paperless compliance work?

For accountant-led compliance workflows, MyLedger is typically better because it automates reconciliation and generates working papers, whereas Xero generally relies more on manual processes and external workpaper tools. In practice terms, MyLedger targets 10–15 minute reconciliations versus 3–4 hours in traditional workflows.

Q: Can digital workpapers help with Division 7A and depreciation compliance?

Yes. Digital workpapers improve consistency and substantiation by linking calculations, journals, and supporting documents in one place. In MyLedger, Division 7A schedules and depreciation workpapers can be automated and supported by extracted document data.

Q: What should we do first to go paperless without disrupting delivery?

Start with one workflow (usually automated bank reconciliation + BAS evidence capture), standardise naming/indexing, and pilot on a small client group before scaling. The key is practice-wide consistency and reviewer adoption.

Disclaimer: This article provides general information for Australian accounting practice operations and compliance workflows as of December 2025. It is not legal or tax advice. Consideration must be given to client-specific circumstances and current ATO guidance and legislation before relying on any process design or compliance position.