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Archive for the ‘Xero’ Category

Xero update

As Xero approaches 600,000 users worldwide, here are some notes on recent developments at Xero to help you improve your business results in 2016:

  • Partner of month for December 2015 was Crunch Boards which enables forecasting and reporting
  • The new + icon and search facility saves clicks and time
  • Improved Fixed Assets
  • Cashflow report helps businesses understand money flowing in and out of their business
  • Two step authentication increases security
  • Automatic invoice reminders prompt customers to pay so you don’t have to
  • Billable expenses make it easy to pass on costs to customers
  • Xero on Apple Watch updates you when your bank accounts change

 

The Xero eco-system continues to grow wand more industry specific add-ons. At the end of last year a property management system called Arthur was added.

Our support of Xero includes a 50 point Xero training programme to ensure you use the system like a pro. We can also you develop a Financial Policy for your business to ensure you have complete control and by using LivePlan we can help you improve your numbers.

Xero security update

The Website hack of Talk Talk made national news so it was interesting to see Xero recommend users change their password.

There is an increase volume of attacks so it makes sense to consider your position. With Xero it seems to be around phishing emails.

The first thing you can do now is to login and check your history and look at the time, location and IP address. If you have any concerns email Xero at phishing@xero.com.

You can do the same with any other Websites/online applications you use.

Xero are working on a twostep authentication where you enter a password generated by an authenticator App on your phone or smart device.

A reminder of key points for passwords:

  • Never share passwords
  • Use complex passwords
  • Change your passwords regularly
  • Don’t use the same password for multiple Websites

 

Keep an eye out for Phishing emails – if in doubt about clicking a link check with Xero first. And, use reputable anti-malware software.

Xero development

Sackmans believe Xero is the best accounting system in the market.

So, so it’s interesting to see how they have developed over the last four years https://www.xero.com/uk/feature-timeline/

There is a lot of noise from Sage but in my opinion they are way behind and need to pull their socks up if they are to protect their market. Xero now have half a million users.

It’s amazing how quickly things can change and it’s a good idea to review your strategy regularly to make sure you don’t get left behind by the competition.

When was the last time you did a critical review of your business?

  • How does our customer experience compare to other businesses in and out of our sector?
  • How does your service or product compare to the competition?
  • How does your marketing collateral (like your Website) compare?
  • Are we solving the most important problems our customer has?
  • If I was going to attack my own business how would I do it?

 

If you’d like to help with a review get in touch – we can offer you some software that will help you reassess your plans or even a 1-2-1 business review session.

Mobile accounting

The time is approaching where we can run our business on our phone and tablet.

The secret to good accounting is doing it regularly so you have up to date information. Online systems and Apps make this much easier that being stuck using a desktop system.

You can check what money has come in first thing in the morning and start chasing late payers any time and from anywhere because you’ll have their contact information with you. You can invoice on the go – finish a job, take a photo and invoice with a “pay-now” option.

You can add expenses as they happen and include a photo of the invoice so it is attached to the transaction in Xero.

Here is a video from Xero, our favourite online system.

Coffee and Xero

Xero customer David Abrahamovitch, owner of The Grind Company in London talks with LBC’s Clive Bull about how to vision, culture and keeping tabs on each part of the business

Stock control for Xero

This month sees a big announcement from Xero with the release of improved Inventory.

Before the improvement you could really only use the Inventory feature in Xero to help you speed up issuing invoices. You could also use the Inventory feature to run reports of your various services and products, but you could not track what stock you hold.

The improvement means that you can now do all your stock control and accounting in Xero. This means you can check stock levels and know when to re-order. If you use Xero’s App for Google Android you can do that from your phone or tablet.

There are two types of inventory items; tracked and untracked. You can use untracked for things you don’t need to count such as services.

In the future there will be more Inventory reports and enhanced management such as archiving items, minimum re-order levels and stocking-taking.

Here is a video overview

Xero update

Here is a quick summary of recent improvements to Xero Accounting Software.

All new clients now get offered Xero because we believe it is the best system on the planet. If you are not yet using it let me know and I can arrange a demonstration.

These are:

  • New dashboard
  • Purchase Orders
  • IPhone App
  • Quotes

 

The Xero dashboard shows the most important information where you need it. You can know what is going on in your business at a glance. This includes:

  • Check your bank balances
  • See the money due in and out
  • Key accounts

 

The Xero dashboard allows you to organise the dashboard as you want it by dragging and dropping the graphs.

Later, Xero will release the Business Performance Dashboard with a choice of financial ratios and performance indicators.

Purchase Orders (PO) enable you to have complete control over expenses. Before a suppler is authorises to send an invoice they must get a PO.

Next is Receipts for iOS to help with expenses.

The App means you can easily enter business and personal expense claims when they happen, where they happen. No more sorting through lots of little receipts in the office.

Quotes help to win work.

It’s important to turn quotes around quickly and follow up on quotes to maximise your sales.

With Xero you can customise, create professional reports and send them on the spot. You can use “Estimates” if you prefer and include an expiry date.

You can copy existing quotes and easily turn a quote into an invoice with just a few clicks which customers can pay online.

As with everything in Xero, the user experience is beautiful. Down the line Xero will release the ability for prospects and customers to accept quotes online.

Xero update

Xero continues to impress me with their ongoing development.

Recently they have improved the profit and loss reporting with the aim of making them the best in the world. One of the improvements is to be able to customise the reports with drag and drop functionality, while in the report.

This enables neat and tidy reporting and bespoke analysis from inside Xero rather than having to export into a spreadsheet and do extra work.

Here is a video overview

 

Another useful feature is batch deposits. Here is a video which explains how to use the feature.

The Reverse Charge

The reverse charge is a VAT accounting rule which is designed to simplify VAT.

The rule avoids the need for businesses to register for VAT (and complete VAT returns) in other EU Member States where they make sales.  VAT is a EU tax and the “place of supply” can be where the customer is.

So, if you sell to France and Germany you are technically trading for VAT purposes in those countries. Instead of you registering for VAT and completing French and German VAT returns, your customer will do that on their return. They will be the supply and the purchaser.

This is why when you buy from EU businesses you need to do the adjustments on your UK VAT return. But, the adjustments are different for goods and services.

Sales of goods to EU
Zero rate the supplies and enter the sales amount in boxes 6 and box 8.

Sales to services to EU
Zero rate the supplies and enter the total sales in box 6.

Purchase of goods from EU
If you buy goods you must notionally charge yourself VAT, by entering it in box 2.  Having ‘paid’ it, you can then reclaim the VAT by entering the same amount in box 4.

You must also include the cost of goods purchased that are subject to the reverse charge in box 7 and 9.

Purchases of services from EU
You must notionally charge yourself VAT, by including the VAT amount within box 1.  Having ‘paid’ it, you can then reclaim the VAT by entering the same amount in box 4.

You must also enter the value of the purchase in Box 7.

Xero software
The good news is that Xero software has made this easy – watch the video.

Cashflow and liquidity

Successful businesses proactively monitor cashflow and liquidity.

Most business owners understand what cashflow is but are less sure about the best way to manage it and do not understand the concept of Working Capital/Liquidity.

Working Capital/Liquidity is basically what cash you have to work with on a day-to-day basis. On the positive side you have:

  • Stock
  • Work In Progress (WIP)
  • Money in the bank
  • People who owe you money

 

Other the negative side you have:

  • People you owe money to
  • VAT and tax

 

To manage cashflow you really need an accounting package. To manage your Liquidity you need regular management accounts.

The accounting system we recommend in Xero because this has a Dashboard which gives you a very good snapshot. And, because Xero is online I can easily get access to the data I need to manage your VAT and work out and tax you need to allow for on profits.

So many people make the mistake of taking too much money from their business or making the wrong funding decision on buying things for their business because they forget to allow for tax.

To get a feel for the short-term cash availability/liquidity you can use two ratios called the a) Current Ratio and b) Quick Ratio. These are fairly straight forward ratios, easy to calculate, but they can tell an important story.

The Current Ratio is the total of your “Current Assets” divided by your “Current Liabilities”. These are found on the top half of your Balance Sheet. If you’ve got a number of more than 1 it means that your current assets are greater than your current liabilities. That’s good.

It makes sense to track this regularly and create a graph because if you’ve got a downward trend in your Current Ratio then that suggests that you’ve got a potential problem. Specifically it means that at some point you are not going to service all of the short-term debt.

The Quick Ratio excludes Stock and Work In Progress. This is because it takes time to turn stock and Work-in-progress into cash. This will give you the worst case short-term cash position.

Another useful ratio to monitor if you sell on credit is called Debtor Days. Debtors are people who owe you money and to work out the ratio divide your debtors today by gross sales and multiply the answer by 365.

Once again, track and graph the results because small changes can make a big difference to the cash in your bank.