5 Key Steps for New Xero Users

19th February 2015

We’re big fans of Xero. It seems strange to get excited over software, especially bookkeeping software, but Xero has the potential to make your business life so much easier. Up-to-date financial information as easily as possible, giving you business information you need to grow and thrive.  That’s what Xero is all about.

If you’re just getting started with Xero, or having a look at it, here are 5 key things you can do to get off to a great start:

1) Get your bank feeds up and in place

Bank feeds are key to Xero’s functionality – you can use Xero without them, but why would you want to?  Bank feeds allow Xero to drag transactions out of your online banking, and then allow you to easily allocate them to the right sales or expense category.

Xero will even look at the amounts and intelligently match them to outstanding invoices and receipts for you to confirm or correct.  All your bookkeeping for the day can be done in the first ten minutes you sit down at your desk (or wherever you work), and your bank reconciliation is always going to be right.

So damn useful is the bank feed, that if you’re using Xero with a bank that’s not being helpful or doesn’t support the feeds (Co-op are awful, and there are other guilty parties) then we’d recommend moving your bank.

That might sound like a drastic step, or over the top, but once you’ve lived with a functioning bank feed you won’t ever go back to the bad old days.

2) Do your invoicing on Xero

Xero makes invoicing really simple.  It drags your customer’s details out of your contact database, gives you an easy form to fill in, and then lets you quickly print it off or (even better) email it directly to your client.

When the money flies in to your bank account, Xero will be helpful and suggest all the outstanding invoices that the amount matches, once again making  your life a bit easier.

And in the meantime, you can check on all your outstanding debtors (including which ones are late) and quickly email off statements to anyone who needs chasing.

Do you have invoices you send out to the same people for the same amount every week or month?  Automate the whole thing – set a repeating invoice and Xero will create and email them out without further effort from you.

So if you’re using Word or something else to prepare your invoices, ditch it.  Don’t double up on your work – make your life easier.

3) Invite your advisor

One of the great things about cloud-based software like Xero is that you can give your accountant access to your live real-time data.

This means that problems can be fixed easily or information obtained at the drop of a hat.

Most bookkeeping you’ll be able to do easily enough but there are always some areas (like fixed assets and depreciation) that, whilst Xero handles it brilliantly, you could do with some help on.

So send an email, get them to log in, and get it all fixed.  Sorted.

And the days of sending over backups by email or USB stick are dead and in the dust.

4) Check reports regularly

What’s the point of having all that lovely up to date info if you don’t use it?  Accessing reports is easy, so do it daily.  See where you stand.  See what you need to do to hit your end of month targets.

Key reports to check include:

  • Profit and loss (basically, your income and expenditure performance)
  • Balance sheet (what you own and what you owe)
  • VAT – what’s due so far for your next return (best viewed sitting down and with a stiff drink)
  • Aged debtors – who’s getting really behind?  Who’s over their limits?  Who needs a bit of a kick?

5) Don’t stop there….

One of the great joys of Xero is the add-ons.  Xero gives you all the basic functionality you need, but if there’s a specialist area you need a bit more on, many Xero partners have released bolt-on bits of software to take things further.  For example, tradegecko.com brings in full inventory management.

Hopefully you can see some real benefits to the way you do business.

We do.  That’s why we’ve built several fixed-fee packages (with add-ons!) that you can choose from that enable us to work with you as your accountants and tax advisors.  Have a look at them by clicking here.

As always, if you have any questions, just drop an email to andy@aktax.co.uk or give us a call on 01634 540040.