Xero is great software – provided you know how to use it properly.
Here are five simple tweaks you could make to the way you use Xero which will make a big difference to the time it takes to do your bookkeeping and to the financial information you can generate from Xero.
The bank feed is one of the most useful tools in Xero but it works best and takes the least amount of time if it’s matching incoming and outgoing transactions against sales invoices and suppliers’ bills that are already accounted for.
In any event, sales invoices should be sent as soon as possible and suppliers’ invoices should be accounted for when you get them so you know your costs and how much you need to pay out.
Your bookkeeping is only useful if it’s up to date so make sure all your sales and purchases are accounted for as soon as they can be.
And speed up that bank feed work.
Not for the faint-hearted in case you get one of your rules wrong but if you have regular, repeating receipts and payments going through your bank account then set up some rules so Xero does the heavy lifting for you and gets it right every time.
Start with transactions without VAT (easy enough if you’re not registered for VAT) such as:
Bank rules run automatically and if you’re reclaiming VAT on a payment you need to ensure you have the VAT invoice and the best action you can take is always to attach the VAT invoice to the payment in Xero.
Which slightly defeats the point of automatic, time-saving rules
Here’s the Xero guide to setting up bank rules
Give it a go – but check your work!
You don’t use Xero for the love of bookkeeping, you use it to produce financial information that you can use to measure and improve the performance of your business.
Get to know the basic reports in Xero and if you click on the star next to a report then it appears in the Accounts drop-down menu.
You can also customise reports to make them more helpful and so they better reflect YOUR business. Here are a couple of examples:
If you repeatedly send invoices of the same value, for the same product or service to the same customer then automate the process using a repeating invoice template.
Xero won’t forget the task and when the customer pays, the bank feed should match the money to the invoice.
Here’s the Xero guide to setting up repeating sales invoices
You can also set up repeating transactions for other items that will save you time such as:
Expense apps or document management apps, such as Dext, AutoEntry or Xero’s own – HubDoc – all save time and improve the accuracy of your bookkeeping.
You forward suppliers’ invoices and out of pocket receipts to the app and select the correct accounting classification for the cost and then publish the transaction to Xero, along with the PDF of the invoice.
These apps learn and can also be programmed to do the correct accounting whenever they recognise an invoice from a particular supplier.
I hope you find these five Xero tweaks useful and you get more out of Xero as a result.
If you’d like to learn a lot more and make sure Xero is functioning as your business needs it to then our bespoke Xero training might be just what you need.
We work with you and your finance team on YOUR Xero file using YOUR business transactions.
Follow the Xero Training link to find out more and then give Michael Austin a call on 020 7125 0270 or email info@bluedotconsulting.co.uk
Michael
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Blue Dot Consulting provides accounting and business advisory services to clients across Central London, West London and South West London, with particular focus on Fulham, Hammersmith, Richmond, Wandsworth, Kensington and Chelsea. We help local business owners make better financial decisions and plan confidently for the future.
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