From your friendly local Accountant
Many small business owners have now discovered the simplicity of using Xero Accounting software to help them manage their business finances, and Tracey, from Ask Your Accountant Ltd, has given a few tips to help you both get more out of Xero, and to ensure everything is ship-shape, saving your Accountant time (and you money!).
Reconciliations
– It’s a good idea to check each of your business bank accounts (especially if you also use Stripe or Paypal) regularly to ensure they match your actual bank balances, ideally at the end of each month, after you have coded all transactions. Click on the Reconciliation Report on the RHS next to the Manage Account button when you are on the bank reconcile screen, then check there are no Outstanding Payments or Receipts showing, and that the balance matches your actual online Bank balance.
– Take extra care when coding bank transfers to ensure it is a transfer to another business account, and not a transfer to your personal account (which would be coded as Drawings instead).
Sales Invoices.
– To save time, use Repeating Invoices, or copy an Invoice, and use Items to save common Sales Products or Services.
– To maximise getting paid, use Invoice Reminders, and Online Payment Methods like Stripe, Paypal or GoCardless, and check your Aged Receivables Summary Report regularly.
Cash Flow
– Entering bills from your suppliers really helps you keep an eye on your cashflows – the life-blood of any business.
– Regularly check out Xero’s Short-term Cash Flow, under the Business drop-down menu – see your projected incoming and outgoing cash flows over the next 7 or 30 days, based on your Sales Invoices and Bills entered, and their due dates.
Business Snapshot
– Also found under the Business drop-down menu – the Business Snapshot gives you a quick visual of your Income, Expenses and Profit for the Year to Date, and compares to the prior year so you can see how you are tracking vs last year.
– It also shows your largest Expenses, to help you monitor your most significant outgoings.
– And shows a summary of your Assets and Liabilities, Average time to get paid, etc.