7 Xero Bookkeeping Tips You Need To Know For Your Small Business
Finding time for you to take a break from all the things requires some groundwork. And before you beat yourself up about the stage you are now in I’m going to debunk a falsehood for you right now.
Living an effortless life on the outside takes a whole of hustle and planning and execution, so seeing someone’s best day it not always conducive to the journey that got them there.
Today if you’re running a small business or are thinking of starting your own small business then getting your small business bookkeeping streamlined from day 1 is vital for you to have the time to spend with your friends and family and doing the hobbies you’re into.
You're looking for love and understanding, not just from your bookkeeper, but from your family, customers and team. So how do you tick all the boxes so you can stay on top of your bills, get paid without the hassles and stay on top of your small business bookkeeping?
XERO was the reason I decided to hang up my MYOB accounting software boots. The machine learning ticking away behind the scenes inside XERO small business bookkeeping software also means the longer you use it to process your company work, the less time in the future you'll need to spend focusing on data entry and other tedious manual tasks that are now being learned by the software’s intelligence. For staying compliant with ever changing tax laws it’s important to use the best small business bookkeeping software that stays on top of their industry. It’s made payroll, bills, tax compliance and managing multiple companies, doable.
If you want to have a simpler lifestyle working from home, raising children as well as being able to take a yoga class then these XERO bookkeeping tips will be your new best friend. Let’s take a look further into ways your business week can be simplified with software you may already be paying for.
Time saving hack number 1, Paperless timesheets.
Having a team and being able to delegate work inside your business to others is incredibly important for giving you back some creative time to write marketing campaigns and to network with suppliers and potential customers. For this reason, using digital timesheets inside Xero software will soon be your all-time favourite time saving hack. Before paperless timesheets inside Xero, you would be faced with time addition errors regularly and missing information from employees and manual tracking of annual leave accruals. Now with paperless timesheets, staff are given access to their own timesheets and payslips and leave applications electronically through the online portal. It’s then simple for you, the business owner to approve or adjust staff timesheets once a week before the pay run is filed with the taxation office online.
Time saving hack number 2, Bank feeds
Before accounting in the cloud became a thing, you would need to give your company bank statements to the accountant to prepare your tax returns. This would involve tediously entering each transaction on the bank statement into the tax accountants accounting software. The desk top accounting software would then create the financial statements required to calculate the company tax. Now since Xero released bank feeds, the accounting software can pull your company bank account transactions into the accounting software daily and automatically. This has been a game changer for how companies stay on top of it all without burn out. This automated one-way feed of data from the bank to the accounting software has world class security. Security is a big concern for anyone in business. That’s why, Xero software can only pull data from your bank. Your team cannot use Xero to make a withdrawal from your company bank account. Now with machine learning becoming more advanced, Xero can auto match transactions when it recognises which customer invoice matches with the bank statement transaction. Even more time saved.
Time saving hack number 3, Cash coding
Not every accountant will share this extreme time saving hack with their clients but I’m spilling the beans here for my clients and bookkeeping students. Cash coding can give you back your life so you can take time off and do yoga all day if your heart so wants. As the size of your company grows the number of transactions grows with it. With Xero software more transactions do NOT mean more data entry time. In fact, with cash coding the time can be drastically reduced as transactions from the same supplier can be categorised together in once batch. For bookkeepers, this means that taking on retrospective jobs where companies are years behind on their taxes is no longer going to cause you sleepless nights. The cash coding feature in Xero allows your bank statement transactions to be sorted, much like the data sort function in Excel, so you can select like transactions to be categorised to the same expense category. For example if your company bough fuel for the company car every week at a different service station, all these transactions could be highlight on the cash coding screen and then you allocate them to the one account – Motor Vehicle – Fuel and Oil. Potentially 1000 transactions processed in less than one minute.
Time saving hack number 4, Email to bills
We all want to be debt free but the number one reason we struggle to achieve this is due to bills. To stay on top of your bills and to have budget tracking in Xero helps get you one step closer to your financial goals. Knowing how much you owe and tracking every single tax deduction can save you thousands at the end of financial year. If you receive bills via email it’s easy to forward the email to the Xero Email address for your specific company. This means if you have the misfortune to be audited by the taxation office the image of your tax deduction is stored in the cloud inside your Xero file. It’s simple and fast to locate once the audited makes a request to see the receipt for your business purchases. Before cloud storage of tax deductions, companies would spend hundreds and thousands on audit fees due to time spent locating specific receipts for inspection by the taxation office auditors. Even while out for a client meeting having a coffee, you can snap a photo of the receipt on your phone and email it to your Xero bills folder.
Time saving hack number 5, Auto debt collection reminders
Being owed money for lengthy periods of time can be stressful. I want you to avoid all the chasing and awkward phone calls so you can lead a worry-free life and find the happiness you deserve. When customers owe you money it’s not always out of some ill intention. Bills can be overlooked easily in our hectically busy lives. Xero helps maintain your cash flowing on time through automated invoice reminders. These are simple to set up inside your Xero software and they can run like clockwork based on how often and at what time frame you wish to send reminders. Once the reminders are switched on, they run like clockwork for every invoice you send to customers. The email addresses of your customers are kept in Xero, so the email is automatically sent to your customers who owe you money. It’s important to note that you need to mark off customers who have paid you regularly, so they aren’t bothered with payment reminders. We show our clients how to reconcile their bank deposits frequently inside this small business bookkeeping training guide. It’s the essential only step-by-step video training guide for new Xero software users. Designed for small business owners without previous accounting experience.
Time saving hack number 6, Customer statement emails
Cash flow is the number one priority for a healthy small business. Making sales is I great but to run a successful business you need to collect your income before your staff and supplier bills need to be paid. To stay on a cash flow positive position, it’s best to create your terms of sale in a time frame that’s less than the credit terms you have with your suppliers. For example, it’s best to be paid in 7 days of the average supplier gives your 30 days credit to pay your bills.
Inside our Small Business Money Management programme, we show you how to print a statement which is a summary of the work invoiced to your customers less the payments they have made to you. The bottom line of the statement is the amount your customer owes you. It’s important to send 7-day statements, or whichever time frame you choose, so your customers are reminded how much they owe you are regular intervals. It also helps large company accounting staff cross check their records to ensure there aren’t invoices missing, which can so easily happen when working with hundreds of employees. Having systems for emailing regular statements is made easy through Xero software.
Time saving hack number 7, Dashboard metrics
To live a life doing work you love is not always achieved effortlessly. The truth is most successful people have jumped many hurdles, hustled to get their first clients, and taken a chance on themselves financially to get educated so their weaknesses become strengths.
Small business owners need to make smart business decisions but when you have no education in accounting economics and commercial law it can be risky using intuition alone to decide where your hard-earned income should be reinvested.
The answer is to know your numbers. Making business decisions based on data, actual results compared to your budget and compared to industry benchmarks specific to your industry will help you make better decisions with confidence.
The Xero software has a built-in feature so you can see immediately on your dashboard your key performance numbers. These numbers and graphs show trends and immediately are calculated by the software for you in real time as you categorise each bank transaction.
When all your transactions have been categorised at the ned of the month and you have entered all the sales invoices to your customers and all your unpaid bills into Xero, the software dashboard will show you the key metrics so you can see how your business travelled for that month. View these reports weekly so if the numbers are looking good you still have a couple of weeks left in the month so send out a flash sale email promotion or to spend more on your next paid ads campaign.
So, there you have it. My top 7 time saving hacks for using Xero accounting software.
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