02 Mar Major benefits of switching to Xero
You can’t fail to have heard of Xero, the cloud-based accounting and book-keeping software that’s been causing quite a buzz on the market for some time. So what’s all the fuss about?
Well the beauty is in its simplicity of initial set up and ongoing use. There are no complicated installation processes on your office PCs, you just need a user name and password and you are ready to start using the software. Some of the major benefits of Xero are:
This puts the most important information right where you need it. Your key performance indicators; your bank activity; expense tracking; review outstanding customer invoices and see what you owe suppliers at a glance. The dashboard is extremely powerful, simply drag and drop the information that you most want to see. It gives you the helicopter view you need to manage your business in the way that suits you best.
Bank feeds automatically import account transactions into Xero from your bank. Once the feeds are up and running, you’ll no longer need to download and import bank statements to get transactions into Xero. Once you have set up your bank feeds, all of your receipts and payments from your bank statements will appear in your Xero reconciliation and Xero automatically matches transactions in Xero with statement lines where it can. You can also set up bank rules which will make this process even easier. It is a very easy and intuitive system to use.
Simple and quick customer invoicing
Fast and easy invoicing, statement and remittance processing are another benefit. Xero provides templates so it just takes a few clicks of the mouse to set up and send an invoice or statement with your own logo on to a customer. It makes it easy for customers to pay using credit cards or PayPal, which can really help cashflow. You can also set up recurring invoices to be generated and sent on specific dates and use the software to generate quotes to customers that can later be turned into invoices.
Purchasing processes are also simplified, in a similar way to sales invoicing you can raise purchase orders which can be emailed to your supplier and then you can manage the process all the way through to billing and paying for goods and services. You can also use apps like receipt bank to automatically input supplier bills on to Xero which significantly cuts down time spent on data entry.
Since Xero is a cloud-based accounting application, all data is kept safe and secure without the need of back up in the same way as you would have done on a desktop application.
Real time Reporting
One of the most vital features of the software is its access to real time reporting. When you need to generate a cash flow statement or a profit and loss account report, the numbers that Xero generates are an accurate reflection of your business’ financial position.
Another feature is its accessibility, with mobile access to your numbers you can literally log in from anywhere in the world, as long as you have an internet connection, and get an overview of the financial health of your organisation.
Xero was designed bottom-up to be used by small business owners, so it’s designed to be simple to use and free of the usual accountancy jargon. But it’s also a brilliant collaboration tool that can help you get more from your relationship with your accountant or book-keeper. It can really push your business forward.
MTD is currently being implemented from April 2019, so you’ll need to make sure your accounting software is compliant with the changes. Xero is on the HMRC software supplier’s list. If you need to make a change to your existing software now might be a very good time to consider switching to a more modern cloud-based alternative.
As much as we love Xero, there are some minor drawbacks which in order to give an honest appraisal of the system we’ve included here. Sometimes the automatic bank feeds can cause duplicate transactions, it really doesn’t happen often but it can be a little bit fiddly to correct. You need to make sure that you put checks in place to review the actual bank statement figures against the system auto-feed figure at least once a month. It is also not the cheapest cloud based system on the market but it really does make book-keeping easier, which will inevitably save you a lot of time which can either result in a cost saving or allow you to spend that time on different activities.
We understand that making a change to your book-keeping systems can be a bit of a daunting prospect, we can help support your transition from existing spreadsheet based accounting or from another accounting system. We can provide one to one training to get you up and running and provide ongoing support. We also offer virtual Xero-based bookkeeping services if you rather leave the accounting function to us while you focus on what you do best. If you’d like to have a chat about how Xero could benefit your organisation, contact us at firstname.lastname@example.org.