If you’re the owner of a business start-up or SME, it can seem as if you’re spinning numerous plates all at once. This can make managing your finances an additional challenge.
At Lithgow Perkins, we aim to support our clients as best as we can, and we’re always looking for ways to make their lives easier. Using the accounting software Xero is one of the ways in which we do this.
Xero offers a range of benefits for SME owners that makes it a valuable tool in helping them stay on top of their finances, streamline their accounting processes, and reduce errors.
A versatile, secure and easy-to-use accounting tool, Xero is not only affordable but is also cloud-based. This means you can access it from anywhere, making it extremely simple and convenient to keep track of your company’s finances. You can download the mobile app to make it even easier.
We use Xero as a firm to provide our clients with profitability and tax forecasts in advance of the accounts year ending. This enables us to look at tax mitigation strategies and also just to give a heads up for upcoming tax bills.
Xero has a number of features to help you monitor, manage and plan your finances. Here, we’ll take a look at some of these features and their benefits for start-ups, SMEs and growing businesses.
Free trial and affordable starter plan options
Xero’s three different plan options are ideal for start-ups and SMEs. Each level of plan offers more features and in-depth tools, so as your business grows you can upgrade to the one that works best for your needs.
You can get a free 30-day trial which includes access to all the features that Xero offers before choosing from the following plans:
Early: Aimed at sole traders, start-ups and the self-employed, this plan offers key features such as the creation of up to 20 invoices, bank reconciliation, expenses management, and short-term cash flow.
Growing: Aimed at small businesses that are growing, this offers the same features as the Early plan, plus bulk reconcile transactions.
Established: This is the same as the Growing plan but with additional in-depth analytics, project tracking and expense claiming. It also processes different currencies, which is helpful if you work with freelancers, clients or suppliers outside the UK.
Easy to access and use
Xero is easy to navigate around, and its dashboard is intuitive and simple to use. You can personalise the dashboard so it shows you the features that you find useful and hides those that you don’t.
The Xero dashboard allows you to see your business bank account balance at a glance. It’s really easy to view your bills and purchase orders and to see when they are due, as well as the invoices you are owed. You can keep track of your costs in real time so that decisions can be made quickly and any issues swiftly resolved.
Data migration is simple and you can customise Xero to your business needs by easily integrating it with third party apps. There’s also theoption to set up a payroll.
An unlimited number of people in your team can have access to the software, and you can set different levels of access depending on their roles. You can also give access to your accountant and other external partners.
Should you need any assistance, the helpdesk on the dashboard is easy to use and offers access to a range of useful articles and guides. Online customer support is also available 24-7, with the option to request a return email or call back to your number. It also has step-by-step guides which are clear, jargon-free and easy-to-understand.
Reconciling your company accounts with your bank statements is an important part of looking after your finances. As well as helping you accurately submit your tax returns, it can also help you identify any errors or fraudulent activity.
As with its other features, Xero’s bank reconciliation is easy and intuitive to use. It offers tools such as bulk reconciling and a ‘find and recode’ option that further helps improve accuracy. Xero can be integrated with your bank or can convert a PDF bank statement into a CSV that it then uses to automatically import and categorise transactions.
Payments and invoices
Once you’ve synced Xero’s simple payment system with your bank account, it makes light work of your incoming and outgoing payments. Save your bank card details in the system to use the one-click option for payments, or schedule amounts to be sent on specific dates.
Xero also makes it easy to send out your own invoices and for the recipients to pay you. You can design your own invoice template and add your company logo for a more professional look that fits with your branding. Your invoices are sent electronically and can be scheduled to go out at a certain time, and they even have a ‘Pay Now’ button for fast and secure payments.
Managing your expenses is quick and easy, too. Simply take a photo of your receipt and upload it to Xero – the most efficient way to do this is using the mobile app. Each receipt is then added to your expense claims and reconciled with your bank statement.
Reporting and analytics
Creating and saving financial reports is easy with Xero and, even better, you can customise the reports to show you what you need to know. You can also delve into your finances in depth if you wish with Xero’s detailed data analytics capabilities.
Available with the Established plan is a project management tool that tracks a project’s cost, time and profit margin at each stage. Clearly laid out in an easy-to-understand way, this feature allows you to track expenses and deadlines, draft quotes and submit invoices under each project. If you are being paid by the hour, it can also time and record this. The tool then brings everything together to show you the real-time cost of the project, allowing you to make adjustments and address issues as you go along.
You can create customised reports using a drag and drop function, while other features add even more value such as a ‘top customers’ graph showing the customers that bring in the most revenue. You can even create a ‘report package’ with all the relevant information you might need to present to a bank or investors when looking to secure a loan or funding.
To find out more about Xero, how you can use it to manage your finances and how it can complement our services, please contact Tom Lowry on 01423 564 446.