Xero is cloud-based bookkeeping software that can solve both those problems – not just saving you time, but also enabling you to use your financial data to help you make good business decisions.
I am yet to meet a business owner who tells me that the reason they started their business was so they could spend time on their bookkeeping.
For many years “keeping the books” has had a reputation as a necessary but tedious task.
Prior to the introduction of GST the “solution” to this for most smaller businesses was the shoe box full of bank statements, receipts, invoices, cheque stubs and so on, dumped on the tax accountant once a year.
Since July 2000 and the introduction of BAS reporting small businesses have been forced to keep their books up to date at least quarterly.
Many small businesses will be familiar with the last minute rush of getting your books into shape in time to lodge the BAS.
Whether you do this yourself or pay someone to do it for you it probably feels like there’s little benefit to you in that process. You’re basically maintaining your accounts purely for the purposes of fulfilling the requirements of the ATO.
Moving your bookkeeping onto Xero can revolutionise that process and in so doing revolutionise your business.
Not only does it make bookkeeping quick and easy, but it also provides you with high quality business information that you can use to manage your business effectively. Let’s start by looking at some of the ways that Xero can simplify your bookkeeping and save you time.
Direct bank feeds will change your life With your authorisation, your bank will provide a feed of your daily bank transactions directly into your Xero file every night, so when you log in to Xero at the beginning of each day you’ll see all the receipts and payments that went through your accounts the previous day.
I can’t begin to express how fantastic this feature of Xero is for small business owners. It not only saves you hours of data entry time recording your bank transactions, but also means your accounts are always up to date.
Even better than the bank feed itself is that over time Xero learns how to treat each of your regular transactions. You simply go through your bank feed and code and approve all the transactions that have occurred.
If the same supplier appears again in the future, Xero remembers how to code it, so all you need to do is press ‘Okay’ (unless you do want to override the suggested code with a different one, which is also a simple process).
Other time-saving software features Xero has plenty of other features that can save you time too. For example:
• Xero’s method of invoicing customers is quick and easy, and incorporates features to help you get paid on time. You can even send an invoice from your smart phone using the Xero app!
• Paying suppliers is also made easy and efficient using the batch payment feature • Reporting and paying your team’s superannuation contributions takes just a few minutes each quarter
Collaborate with your accountant or bookkeeper in real time Possibly the biggest benefit of Xero for small business owners is that with your data in the cloud you can collaborate with your bookkeeper or accountant in real time.
This means that if you do hit a hurdle in your bookkeeping, they’ll probably be able to solve the problem for you quickly and economically.
More importantly, combined with the fantastic reporting tools that Xero provides (which I’ll discuss in more detail in the next article in this series), collaborating with your accountant in the cloud means you can more effectively tap into their expertise and work together to drive your business forward.
Rhys Roberts is a certified practising accountant (CPA) and principal of Viridity, specialists in cloud-based bookkeeping and business software for small business. Learn more at www.viridity.com.au
