Xero accounting software has become known as one of the best cloud accounting software on the market right now. As specialist Xero accountants, it’s no surprise that we love Xero, but there are a lot of reasons why you should too.
Xero’s interface may be minimal and uncluttered, but the software itself is packed with user-friendly features that enable a greater integration of administrative and accountancy tasks than ever before, allowing you to run your business better and more efficiently – all from one device.
Rather than being chained to spreadsheets and multiple ledgers, Xero accounting enables you to work anywhere, anytime, using a single ledger – without being limited to a single device or PC. Moreover, the cloud software allows you, your accountant, and any other member of your team you provide access to, the ability to gain a real-time picture of your finances. All safe within the knowledge that Xero’s software will update and maintain itself.
If you’ve just switched over from traditional accounting to Xero, you may find setting up the software a little overwhelming – especially working through all the additional features.
In the midst of reconciliation, and the steps new users have to go through in order to move across to Xero, it can be easy to forget to properly utilise some of the amazing features that will make your business accounting that much easier in the long run. In an effort to ensure that your transition to Xero is as seamless as possible, we’ve come up with the 10 most valuable features of Xero Accounting that you just can’t miss.
1. Xero’s In-App Ecosystem
Xero has opened up its software in order to allow other pieces of software the ability to fully integrate with it, creating an in-app ecosystem like that of an iPhone or Android. This application programming interface enables powerful add-ons to connect to your Xero account in order to maximise the ease and efficiency with which you run your business. Whether it’s point of sale apps like Vend that make it incredibly easy to own a retail business, or more general apps like Stripe that facilitate clearer pictures of your finances.
2. Automatic Bank Feeds
Xero’s dashboard display feature allows you to access a real-time view of how much money is coming in and going out and provides links to the most important part of your accounts, including snapshots of your creditors and debtors, overall expenses and bank balances.
It does this by allowing you to set up direct feeds to your bank accounts, so your bank statements are automatically updated and imported into Xero each day.
You can further minimise the amount of work needed to reconcile your bank balances and keeping track of invoices by setting up bank rules for your common bank transactions. Xero will automatically match payments with purchases, link invoices with outstanding values and intelligently look how you treated similar bank transactions for appropriate treatment.
3. Tracking Categories
If you need to monitor different aspects of your business, for instance, you have different divisions or product lines, you can set up specific tracking categories within Xero to monitor and report on their performance individually. You can then set up an unlimited amount of options within each category. If you sell the same product at two separate locations, you can set up two distinct categories for each location and add in product types as options. This offers you a really simple way to dig into these figures to push the performance of your business forward.
4. Uncoded Statement Lines
Uncoded Statement Lines is a recent innovation that makes it easier than ever to get feedback from clients or colleagues on unreconciled bank items. Simply click a button to download an editable PDF that you can share. Your client or colleague simply type in the PDF and sends it back to you. Providing a simple and effective feedback mechanism, saving time and increasing efficiency.
5. Cash Coding
Cash Coding put simply is the ability to code large numbers of transactions, fast. You sort the list of transactions, then code in bulk. Saving hours of processing time, this feature is especially useful for businesses with cash transactions or for working on accounts that haven’t been touched for a few months.
The OK button on steroids. The cash coding function is an alternative way to code your bank transactions in Xero rather than using the bank reconciliation dashboard screen. It’s a great way to code a high volume of bank transactions that are cash before going on to complete the rest of the bank reconciliation for transactions such as invoices, credit notes and expense claims.
You can access the cash coding screen by selecting the cash coding tab from the bank reconciliation screen.
To code statement lines that are cash items you should sort your coding columns first before reconciling. By sorting the columns you can group all similar bank transactions together and this is where the fast coding comes into play. With a few clicks of a button, you can populate multiple bank lines with the same coding to be saved and reconciled to the bank reconciliation.
6. Xero Mobile
The Xero mobile app enables businesses to raise invoices, record transactions and code bank transactions on the go. This makes it easy for businesses to raise sales invoices, record purchases (including taking photos of receipts) and doing the bank transaction coding, means that the accounts are updated much more frequently (mainly because it’s so much easier) and reducing the need for ‘binge’ bookkeeping, where you have to process months of transactions at once to catch-up.
7. File Upload
Xero Files lets you store contracts or other documents either in a general library or attached to a transaction. You can either upload documents or email in. For example, this may be your terms and conditions you want to attach to an online invoice or quote you are sending — or attaching a photo of a particular item to a transaction. Time spent hunting for documents or chasing for copies is eliminated as there is now a central repository for all of your important files.
8. Email Templates
You can now upload your own email templates into Xero to be directly emailed from the software, whether that’s in the form of invoices, quotes, statements or receipts, enabling you to tailor your ‘paperwork’ to specific customers – strengthening relationships.
9. Find and Recode
Unveiled in 2015, Find & Recode allows you to change the coding of multiple transactions in only a couple of clicks. Slicing off time usually spent correcting errors and reallocating transactions.
10. Smart Lists
One of the cleverest features on the list, Smart Lists allows you to use your Xero database as a pro marketing tool, enabling you to search and filter customer information to create targeted marketing campaigns.
Alongside pre-set searches, Xero offers you the option of creating customised customer lists based on location, buying behaviour, or even those that are prompt with their payments. These lists can then be saved for future campaigns or even exported into CSV files to inform your offline marketing.
If you’re still unsure whether Xero accountancy software is right for your business, why not give us a call on 01634 540040, or see our companion Xero guides on our blog.