Category Archives for Xero

Xero Bookkeeping for Small Retailers – How to Get Started

Xero bookkeeping software has become extremely popular with small retailers over recent years. Given its ease of use and ability to integrate seamlessly with plenty of everyday business applications that’s hardly surprising. I still get calls from small retailers asking why they should make the switch to Xero bookkeeping software. There are plenty of good reasons why but I’ve decided to create this quick “how to” as it provides some insight into just how easy using Xero bookkeeping software can be for you.

Getting Started with Xero – What You’ll Need

To use Xero you’ll need this:

1. A decent internet connection. For cloud-based bookkeeping to work effectively, you’re going to need access to a stable and reasonably fast internet connection. Unfortunately, anyone who tells you different to that is being less than honest about it.

2. A desktop or laptop computer, a tablet, or a smartphone. Of course, you’ll need to be able to connect these devices to the internet too!

3. A Xero account. If you don’t already use Xero they currently offer a free trial of their bookkeeping software. Click here and let me know if you’d like a free trial of Xero and I’ll organise it for you.

Getting Started with Xero – A Quick Look Around

When you log into Xero the first thing you’ll see is a menu bar on your screen with buttons showing Dashboards, Accounts, Payroll, Reports, Advisor, Contacts and Settings. It feels intuitive and it’s one of the things I really liked about Xero right from the first time I ever used it.

NB: The Payroll and Advisor buttons may not appear on your screen due to your access setup.

My advice would be to go straight to Dashboards when you open Xero. You’ll notice that there are mini-summaries of your bank accounts, sales dash, purchases dash and your expenses in this area.

Click Accounts and a drop-down menu will allow you access to what you’ll need there. The Payroll button provides access to your employees and their details, timesheets and superannuation.

The Reports tab gives you access all reports on your accounts, plus the budget manager. Frequently used reports can be highlighted with a star and will also appear on the drop menu. Of course, you have access to all end of financial year reporting and reconciliation reports – plus you can export from Xero as well.

The Adviser tab (if you have it) is for users with advisor access, like your accountant or bookkeepers. You can manually enter journals in here if you wish to. As a retailer, you probably won’t be using this tab very much.

The Contacts tab displays customer and supplier contacts. Xero contacts are all set up in the exact same way and you can also set up contact groups. This means you can classify and group customers almost any way you wish to and see your groups in the drop-down menu.

Last of all is the setting tab. Here, you’ll find the general settings for your Xero account. If you are using an advisor (always recommended) they will generally take care of all this for you.

Now, let’s take a look at how to use Xero

Xero Bookkeeping Software: A How-to Guide for Retailers

If you’re new to Xero and still using their free trial, you’ll be immediately directed to their step by step guide as soon as you log in.

Bank Account

First up you’ll want to connect to your bank account. Click on the Get bank feeds button and it will take you through to an authorisation page that allows you to get your feed activated. When you’ve completed this your account information will be automatically linked with Xero. Just this one function helps to eliminate a great deal of human error.

Business Settings

It’s important that your business details are entered correctly. Navigate to the Settings menu and select General Settings, then Organisation Settings. Here is where you’ll enter your company details. Make sure you take the time necessary to get this 100% right, as this is what will appear on invoices and other forms generated by Xero.

Invoices

Xero allows you to customise the look and feel of your invoices. Navigate to Settings again and then select Invoice Settings. From here you can upload your logo so it will appear on all of your invoices. You can also set a starting point for your invoice numbers, which may be really helpful if you are moving across from another bookkeeping system.

Payment Gateways

Xero makes it easy to add a payment gateway so that your customers can pay your invoices by clicking a Pay Now button. The setup process for this is fast and intuitive. You’ll be able to bill customers and get paid just as soon as you’re done with this process.

Customising Accounts

The default chart of accounts in Xero is pretty good and you might only need to make a few minor changes to be completely happy. If that’s all you need completing this should be over in a just a few minutes.

Importing Accounts

Xero has import tools to help you with this, making it possible to import your existing charts of accounts including opening balances, etc. How to import accounts from your old bookkeeping system is beyond the scope of this article. Realistically, you might want to get a Xero certified consultant to help you do this as things can and sometimes do go wrong.

If you have any unpaid invoices you can bring them across to Xero. Navigate to Sales or Purchases and just click the Import button. It’s easy enough to use the template provided. Just copy your data into that and import the template file to Xero. If you don’t have a lot of invoices you can do this manually.

If you have an existing list of suppliers they can easily be imported into Xero too. Unlike with some programs a contact can be both a supplier and a customer in Xero, so you won’t need to add a contact more than once.

Xero Add-Ons

Xero has a large and constantly growing variety of add-ons. Add-on’s increase the power and usability of Xero with applications for receipt scanning, point of sale payments, inventory management and even CRM solutions. You can check out the Australian Xero Apps Marketplace here: At the time of writing, there are over 600 Apps available!

Adding Users

If you want to grant other people in your business access Xero you can do that. Navigate to Settings, then Users and invite the people who need to use the system.

Xero Certified Advisors

Like all bookkeeping programs, Xero is only as good as the people who use it. It’s definitely a good idea to work with a Xero Certified accountant or bookkeeper. They will know many things that you don’t about how to take advantage of Xero and will be able to guide you on the best ways to make Xero work hard for your business. As a Certified Xero Bookkeeper, I’ve helped many small businesses to implement Xero and get it working for them. If you feel that you need some help, I encourage you to reach out to me by clicking here. I’ll be happy to give you a free 30-minute consultation and help you figure out if Xero is right for you.

Xero Paper in Your Office – A Bookkeeping Dream Comes True

People have been predicting the arrival of the paperless office for decades, but for whatever reason or reasons, paper is still to be seen everywhere in almost every office. Most of us don’t think about it much, but our businesses often expend a whole lot of time, effort and money just moving paperwork around from one place to another. It doesn’t make sense, nor does it need to be this way. In almost every area of business, it’s now feasible to get rid of paper entirely.

Why do we use and store so much paper?

Firstly, business owners need to ask themselves what might seem to be a rather obvious question: Why do they store documents at all? In most cases, the answer is that they are required by law to retain them for a certain number of years. Invoices, receipts, banks statements and a ton of everyday transactional documents can clog up everything from a simple shoebox to entire buildings. The storage industry has largely been built around the need to retain such items.

The digital alternative…

The obvious alternative to storing paper-based documents is to digitise them, then store them locally or in the cloud. Here are the key advantages of taking that approach.

Cost savings

I’ve already mentioned how much space document storage can consume. Digitising documents can reduce storage space from rooms or buildings to a simple digital drive (or even a thumb drive). The cost savings are obvious.

Retrievable

Government agencies, law firms and other organisations used to (some still do) employ archivists. Their job was to record the location of every document ever used, so it could be retrieved. Digital technology makes that same tedious task achievable in just seconds – no human beings needed!

Sharable

One of the primary reasons for storing documents is so that they can be shared with people who need to see them. Digital storage and retrieval offers the important benefit of being able to instantly share documents with people across the room or across the world.

Secure

What’s more secure – a room full of paper that could be stolen or go up in smoke, or digitally stored (and backed up) files held in multiple, secure locations? The answer is so obvious that it barely requires any explanation.

How Xero can help

One of the primary drivers of paper accumulation is accounting and bookkeeping. Xero bookkeeping software offers a cloud-based solution that can virtually eliminate your need to store paper – and offers all of the benefits outlined above about digital storage.

Invoices

Invoices can be created and emailed to customers with Xero in real time, either from your office or out on site. Invoicing is simple and easy, with apps making it possible to create an invoice from your mobile phone in seconds.

Receipts

Receipts can be scanned straight into Xero, also from your office or out in the field using an app on your mobile phone. No need for paper!

Bank Statements

Going paperless with Xero is easy, with Xero able to electronically access, encode and enter your bank statements straight into the Xero system.

Storage and retrieval

Store all of your accounting records digitally in the cloud, then retrieve what you need at any time, with Xero. Not only is storage convenient and easy, Xero provides direct visibility over which documents are associated with a particular transaction or transactions, leaving a flawless audit trail.

Try Xero bookkeeping software for free

If you’re uncertain about the benefits of going digital with your accounting, I can organise a free trial for you with Xero. The free trial will let you see for yourself that Xero delivers on the promises it makes and how well it does that. Click here to send me an email or just give me a call on 0447 370 301.

Battle of the Bookkeeping Software: Xero – vs – MYOB

There was a time not too long ago when there was a default answer to every bookkeeping and accounting software related question. The answer was MYOB. With decades of experience behind them and the enduring love of the bookkeeping and accounting community, MYOB was the undisputed, heavyweight king of accounting software solutions.

Like many ageing champions, MYOB seemed to slow down a bit over the years and was a little slow off the mark when it came to developing a truly great cloud-based bookkeeping and accounting system. New Zealand based start-up (or is that upstart), Xero stepped in to try and take MYOB’s championship title. Today, I’ll compare the two contenders and adjudicate a winner!

MYOB Essentials

There’s a lot to like about the cloud-based MYOB Essentials. MYOB Essentials
makes it dead easy for non-technical business people to focus on their core business without wasting time navigating an interface designed just for bookkeepers and accountants. Navigation avoids the use of terms such as debtors and creditors, and uses simple English like Money In and Money Out. Many (most) business owners really don’t understand double entry accounting and the use of plain English is very helpful.

Small business owners want to be able to complete everyday tasks quickly and efficiently, with as few clicks or screen taps as possible. With MYOB Essentials, creating an invoice is as simple as opening the Sales menu and selecting the Create Invoice option. There are similar workflows for processing payments and entering bills. Users can also save scanned documents straight into MYOB.

The Link Document function allows users to upload scanned documents such as invoices or receipts. That means that all data related to a particular transaction is stored in one convenient location. Unfortunately, MYOB Essentials doesn’t yet link to Cloud-based storage services like Google Drive or Dropbox – but MYOB claims that a happening thing in the foreseeable future.

Of course, there’s a direct connection to your bank account for downloading transactions and easy reconciliation. The number of bank accounts you are able to connect to MYOB Essentials will depend upon your level of subscription.

Generating reports is simple and super fast. BAS, Profit and Loss, Balance Sheet and Trial Balance are easy to produce and it’s a hassle-free process to understand how to generate the reports. The reporting interface is very intuitive.

MYOB has a straightforward export function that makes data export a breeze. Remember that you’ll need to share your accounting data at times, even if only with your accountant. Simple data export is an important function that some accounting software buyers tend to overlook. MYOB Essentials does this particularly well.

Maybe it’s me being overly critical, but the MYOB on the Go app, which helps with receiving payments and sending invoices via your tablet or smartphone, looks a bit dated. It could do with a refresh. That said, it all works just fine.

MYOB Essentials offers a 30-day free trial. Monthly subscriptions start from $25. Like other offerings, the price goes up with the increased need for services like additional bank accounts being linked (feeds), monthly transactional volumes and numbers on your payroll.

Xero

Xero is the new kid on the block. It has managed to steal significant market share from the bigger and beefier, MYOB. Unlike the early versions of MYOB, which were very focused on the experience of the accountant and getting them to push their clients to adopt MYOB, Xero led its charge with the user experience. It’s very much frontline users such as independent bookkeepers and business owners who have pushed accountants to adopt Xero.

The Xero interface is trim and displays information that is actually useful, such as bank account balances, how much money your business is owned right now and what bills your business has to pay. You can create new invoices right from the home screen without the need to look for anything. What’s not to love about that?!

Money in/money out is absolutely the most important things for small business operators. It makes a whole lot of sense to make the big deal of these items that they actually are, in Xero.

Xero has spent up big on creating awesome third-party integrations. Integrations can be accessed via settings and simply launching Add-ins. Xero has add-ins for hospitality, manufacturing, education and not for profit organisations. Their point of sale and payment systems are first rate.

Xero’s mobile app is easy to use (I used the Android version). Adding invoices and expenses was very easy. The app uses simple touch ID or a PIN for access and has a familiar, easy feeling about it.

The report capabilities of Xero are really good, if not as impressive as MYOB Essentials. Everything that the vast majority of small businesses need really is right there, like ATO reporting obligations and the usual array of reports that you might want to produce.

Pricing with Xero can be a bit more complicated than MYOB Essentials. There are three main price points are $25, $50 and $60 per month. There isn’t that much difference between the two cheapest price tiers and the number of people on your payroll seems to be the biggest factor in working out your monthly cost. Premium plans (starting at $60 per month) provide payroll for five people. That jumps up to $100 per month at 100 employees. Extra employees cost $2 per month each, which I actually think is still good value.

And the winner is…

Both MYOB Essentials and Xero are user-friendly. I’d say that MYOB has the better desktop application. Xero’s mobile app is vastly superior to what MYOB presently has on offer. You’ll need to decide for yourself which third-party applications make life easier for you and your advisors. In my opinion, Xero is a fairly clear winner on the third party integration front.

I think that in terms of pricing, MYOB has a slight advantage over Xero. Really, the $25 per month package that both companies offer is pretty basic. Most businesses will need something more anyway and MYOB is slightly more attractive in that regard. For me, the price difference between the two would not be enough to sway me one way or another. I’m much more interested in the features that each has to offer.

It’s a tough call – but I’m gonna give the title of “Best Small Business Accounting Software” to Xero. The mobile app is huge for business people on the go, like tradies, who make up a large portion of my client base. The better variety of third-party integrations and the great way that Xero has considered business owners, rather than accountants, makes the user experience superior in almost every way.

Let me know your thoughts on the matter.

Is Xero the Right Choice for your Small Business Accounting?

Xero is one of the most popular online accounting software programs. It costs quite a bit more than some of its competitors, but it has a dazzling array of add-ons that makes it more useful to almost any kind of enterprise. Xero does things that were unthinkable just a few short years ago.

Beautiful Accounting Software

Even if your accountant or bookkeeper doesn’t use Xero it’ll be unlikely that they haven’t heard of it. Sometimes referred to as the Apple of accounting software, Xero’s rapid rise from New Zealand start-up to the clear market leader in cloud-based accounting took many people in the accounting business by surprise. Its intuitive design and first-class user experience continues to drive the development of Xero. Their value proposition of “Beautiful Accounting Software” is a self-evident truth for everyone who has ever used Xero.

1 Million Plus Subscribers

Xero currently boasts more than a million subscribers worldwide, with almost half of them in Australia. A large part of Xero’s success has been its marketing push to accountants and bookkeepers encouraging them to reinvent themselves as business advisers. Whilst this isn’t new, with the bookkeeping process becoming more automated, compliance work is becoming less profitable for advisors. Xero is clearly promoting automation as a bonus to advisors, as it allows them to free up time for higher paid and more worthwhile work.

What Does Xero Do?

The big differentiator with Xero is that it’s the only client accounting software vendor, which also provides a cloud-based practice management suite. Xero does pretty much everything a small business needs including general ledger, billing and expenses, quoting and invoicing and payroll, complete with automated superannuation. Xero includes some CRM functionality, although this is not really a fully-featured part of the product.

Easy to Use Bank Feeds

Bank feeds have been around for a long time now, notably with BankLink. Xero has made bank feeds easier to use and have automated the process through auto-coding rules. This is now a fairly standard feature of all cloud-based accounting software, but Xero did it first.

Wide Choice of Integrations

Xero has been a clear market leader in encouraging the development of linked cloud applications. Their developer community now has several hundred apps available to extend the core functionality of Xero. This makes it easier for business owners to automate certain processes including instant sharing of invoices, contacts and other data. The number of integrations and the functionality they offer is set to keep expanding. Probably dramatically.

Faster Payments

Xero’s online invoicing makes it simple and easy for clients to pay invoices immediately. Xero offers an integrated payment gateway, which provides obvious advantages for most small businesses. The company claims in its marketing literature that the integrated payment gateway has reduced average debtor days across its entire customer base. That’s some claim, but as anyone who has run a small business knows, improved access to payment options tends to improve payment times. Xero gets a big thumbs up for that.

Mobile Applications

One of the most exciting things about Xero is its mobile apps. Users can take photos of receipts with their phones; attach them to expenses and save them to Xero for later approval. The Xero Me app allows employees to submit timesheets, manage leave requests, check their pay details and more. Available for both IOS and Android, Xero Me is a welcome addition for small businesses managing even a relatively small number of employees.

Inventory Management

If Xero has any major drawback it’s inventory management. Xero acknowledges this weakness and recommends that certain businesses should use an app to extend core inventory functionality. This mostly applies to businesses that have:

  • More than 4000 inventory items they want to track.
  • Want to use periodic inventory. That is, they only update inventory at month end or year end, using inventory adjustments to update inventory records.
  • Manufactures goods for sale.
  • Operates with negative inventory, that is, they sell goods before they’ve purchased them.
  • Requires purchase order receipting.
  • Needs to use a different inventory accounting method than average cost, for example, FIFO (first in, first out) or LIFO (last in, first out).
How Much Does Xero Cost?

Plenty of small business owners complain about the cost of using Xero. Frankly, I don’t think that is overly justified. Starting at $25 per month for a business with a single person on the payroll, Xero only costs $100 per month for a business with 100 on the payroll. There are other variables that determine the cost of Xero, but the number of people on the payroll is generally the biggest influence on pricing. Considering all that Zero offers and the time saved over traditional bookkeeping, Xero is extremely cost-effective.

Is Xero the Right Choice for You?

Given the feature-rich nature of Xero, it will be a good fit for almost any small business and many larger enterprises too. One of the best things about Xero is their free 30 day trial. You can try Xero for yourself and see if it’s a good fit for your business, without obligation. Monitor Books can organise a free trial of Xero for your business and make some recommendations to ensure that you’ll get the most from your free trial. Click here to organise a free Xero trial, plus a free initial consultation on how your business can get the most from Xero. It’s easy to use software that you’re going to love!