Following on from my previous article, here are some more of my favourite Xero features and some handy tips for you!
Xero has taken bookkeeping automation to the next level and if you haven’t discovered it yet and are still using spreadsheets, it will save you heaps of time! Get in touch if you’re VAT registered and need a solution for when Making Tax Digital becomes mandatory in April!
Tracking
Do you have several shops/areas/departments/sectors in your business? Would you be able to see exactly how much profit each of these is generating for your business? Just set up a tracking category! Then when you post a sales invoice, purchase invoice, or any other transaction, make sure you allocate it to the correct option and you’ll be able to run reports on each one. You can have two active tracking categories and up to 100 options in each one. So for example, if you work in various locations and sectors, you can allocate both the location and sector to each transaction.
Expenses
Xero has recently revamped its expenses feature and it is now a lot better than it was (there is, however, now a charge of £2.50 per month per user). You take a picture of the receipt on your phone using the Xero Expenses app, write a brief description of what it is and then you submit it to be processed. The app then automatically picks up the amount, date, and supplier. It also tries to guess the account to post it to and the VAT amount to claim, although these usually need checking before they are approved. You can then throw away the receipt as it will be attached to the transaction in Xero automatically! Xero will post the expense like a bill and then you can match this with the payment from the bank in the normal way. I find business owners love this feature as they don’t have to keep all their little bits of paper and remember to claim each one back. There are also some add-ons which are more of a sophisticated expenses solution and if you would like more information on these, please give me a shout!
PayPal bank account link
Does your business take payments through PayPal? Do you hate trying to decipher PayPal’s reports to get your sales figures? Well in Xero, you can just set your PayPal account up as a bank account and reconcile it in exactly the same way as a normal bank account. It even pulls through the total value of each sale and then shows the PayPal fees which are deducted separately so if you set up bank rules on these, you can reconcile them with the press of a button!
Payment Services
Following on from the PayPal bank account capability, you can also set up PayPal or several other payment providers as a payment service. This means that when customers receive your invoices by email, there will be a link to an online invoice that includes a ‘Pay Now’ button. Customers can then pay the invoice straight away using this button. This feature has been proven to reduce the number of outstanding invoices owed to businesses and therefore improve cash flow, as customers find it easier to pay.
If you’ve got any questions on the topics covered in this blog or if you’d like to talk about using a digital platform for your accounting, get in touch as we’d love to hear from you.
