xero

4 reasons to choose Xero accounting software

Laptop beach working Xero

If you’ve been following my blog, Facebook or Instagram feed for a while you would have noticed I talk a bit about Xero. It’s cloud-based accounting software that came out of New Zealand in 2006 and it’s pretty much changed the landscape of accounting software as we know it.

I’m around small business owners a fair bit and get to hear what their frustrations are with regards to their bookkeeping – as well as hearing what’s working well for them.  So based on feedback from clients and also my own experiences, I’ve come up with 4 reasons small business owners choose to use Xero over other accounting software.

Bank feeds

Xero’s bank feeds are the bees knees.  When you log into Xero in the morning, your previous day’s bank statement shows up in Xero.  It’s all right there – customers payments, bill payments, transfers between accounts. A couple of clicks later and your data entry and reconciling is done in one go.  The risk of doubling up on anything or missing anything is greatly reduced.  Transactions can be dealt with while everything is still fresh in your memory. And the real magic starts when you set up rules telling Xero how to deal with the information showing in your bank statement. Brilliant.

Easy access

Your bookkeeper and accountant can log in and access your data via the cloud without having to access your computer. No more having to export data and risk problems later when you import changes back into your file.  No more printing out endless pages of reports to pass on.  You can give access to anyone you want to for no extra charge. Employees can login and submit time sheets and leave requests without having access to the rest of your business data. Going on holidays and want to be able to keep one lazy eye on the books for a couple of minutes each day? The mobile app will allow you to do just that.

It’s beautiful

Xero is a joy to look at. It’s clean, fresh and easy on the eye.  Who wants to be overwhelmed when logging in to do their bookkeeping? Not me. You can even customise what information you want to show on the first screen, depending on the type of data you want to keep a close eye on.  Small business owners are wanting and demanding more from their technology and Xero have got this right.

Easy to use

This is what I hear most from Xero users.   There are other accounting software packages that are more powerful and have more in-built features than Xero, but in my experience this also means that business owners can get their bookkeeping into more of a mess too.  As your business grows or you need extra features, you can use the appropriate Xero add-on. There are over 500 add-ons to choose from so chances are there’s one out there that does exactly the job you need it to do.

I could go on and on about why I would recommend Xero over other accounting software, but I wouldn’t want to bore you – bookkeepers tend to get excited about these sorts of things 😊.  If you’re looking to get organised with your finances, or you don’t love the software you’re using, then have a look at Xero.  Give the 30 day free trial a go and teach yourself two or three easy things from their free video tutorials.  Even if you plan to outsource your bookkeeping I would recommend knowing your way around the basic features of the software and making sure it’s the right one for you.

Happy bookkeeping…

Sarina

2017 – The Year in Review

2017 The Year in Review

Well I certainly had some ups and downs in 2017 and I thought now would be a great time to look back and reflect on the year that was.  Mainly business-related but a little bit personal too.

The Ups

Business contacts – I made some amazing business contacts and became more comfortable with being put on the spot and talking about my business. Although I’m used to standing in front of a room full of students, having to promote your business in front of other business owners takes a bit of getting used to.

Out of my comfort zone – I tried some new activities with family this past year that were so much fun and I’m glad I did them.  I’m not a spontaneous person, but I’m not afraid to try new things either. Age is just a number right?

Trying new things

Business growth – December 2017 was my best month income-wise since I started Festival Bookkeeping in September 2015.

Business coaching – I signed up with a great business coach who gets as excited about my business as I do! Her network of business owners has also been invaluable in the growth of my business.

Growing my businessCollaborations – local and overseas.  In 2017 I had the chance to work on projects with business owners locally. I also had the Head of Marketing at a New Zealand software company contact me personally about a blog post I did. Exciting to see what new projects will come about in 2018.  Technology and collaboration will be 2 focuses for me in 2018.

New working space – My hubby made me a beautiful built-in desk which has been fundamental in keeping a clear work-space (and head-space) to while away the working hours.

Xero – Towards the end of the year I received the good news that I’d achieved bronze level partner status. This came from a year of focusing my time and energy on marketing the Xero side of my bookkeeping business, as well as going the extra mile for my existing bookkeeping clients.

Bookkeeping blog award – Also later in the year, Feedspot.com featured me as one of their “Top 40 Bookkeeping Blogs” on the internet. My blog was up there with some popular bookkeeping blogs that I’d been reading over the years, so this was pretty exciting.

Blog growth – My blog “The Savvy Bookkeeping Blog” had 2,762 views. Wow! I had readers from 66 countries reading my posts – from Iceland to Argentina and everywhere in between.

Achieving milestones

 

The Downs

Burglary – Our house was broken into and it hit our family pretty hard.  It took a lot of time and effort to get back to where we were with missing items and the injustice of people taking things they hadn’t earned. Things they hadn’t been gifted by loved ones. We tried not to dwell on it and to not let our kids dwell on it too much either. As a result we’ve changed the way we think about security. You can read more about it, from a business owner’s perspective, here.

Pricing – One of my goals slipped by the wayside last year (although to be fair I hadn’t started working on it until later in the year). Talking with another bookkeeper and with my business coach has been invaluable in the progress I’ve made so far. (Tip for other small business owners – don’t be afraid to reach out to others that you trust in your industry when it comes to pricing advice). I’m determined to tick this goal off my list early in 2018. No excuses.

Distractions – I have too many ideas for my business and the past year I think I could have focused a little better. Too many directions I want to move in and things I want to accomplish. I’m sure I’m not the only business owner who suffers from this though. I think it’s part of the reason we start businesses, because we want to get our ideas out there and create businesses we really love and can be proud of.

Friends and family – Unfortunately I felt that I lost contact with some friends and family in 2017. It’s easy to use working on your business as an excuse not to make the effort to see people.  Deep down I’m not a “hustle at all costs” type of person, so I’m determined to do better in 2018.

 

A Down that turned out to be an Up

Part-time employment – My part-time bookkeeping work ended halfway through 2017 which at the time I saw as a “down” but really turned out to be an “up”. Maybe it’s a coincidence that I got new clients not long after my employment ended –  maybe those extra free days in my calendar gave me the motivation to work harder and put myself out there a bit more.

So that’s it.  Probably a little more personal that my usual blog posts, but it’s been a great exercise to look back over the past year and to clarify my goals for the year ahead.

 

Happy bookkeeping to everyone in 2018…

Sarina

 

Xero apps – What are they?

Headphones calculator coffee pods

Do you love technology or have you been dragged kicking and screaming into the 21st century longing for the good old days? I think I’m a bit of both.  I enjoy cutting my teeth on new technology for my business but I still love teaching Journals and Ledgers to students the old-fashioned way using pencil and paper. I prefer the comforting tap tap tapping of a big clunky calculator to whipping out my smartphone (my hubby & kids will attest to this).

If you’re a Xero user, you may have heard of Xero apps (or Xero add-ons). They’re cloud-based applications that work with Xero to perform one or more extra functions. There’s an app for pretty much every task and every type of business.

Some apps are ‘horizontal’ apps that are made for use across a range of industries. Others are ‘vertical’ apps that are made for one main type of industry.

They come in varying shapes and sizes and some are more complex than others.  For example, Receipt Bank is straight-forward to use and once integrated with Xero correctly you can be up and running pretty quickly. It has a couple of main functions, which it does well.  Mindbody is an example of a more complex app with many functions, and will therefore take more time and energy to integrate with Xero and to learn to use correctly.

Most of the apps allow you a free trial period at first, so you can try before you buy. Once you’ve decided to go ahead with the product you’re often required to pay by monthly subscription that automatically gets charged to your credit card.

It’s a good idea to make sure you’re comfortable using Xero first before you go add-on shopping. But if you live for learning new technologies, then hey – don’t let me stop you jumping right in! You might also start the other way around, using an App first and then integrating it with Xero down the track. I’ve seen this work successfully as well.  If you use a cloud-based accounting software other than Xero such as MYOB, Quickbooks or Reckon, many of the apps will integrate with these too.

Why are people using Xero apps?

  • To provide a better experience for their customers
  • To save time
  • To get organized
  • To streamline processes
  • To improve cashflow
  • To keep a closer eye on their finances

Happy bookkeeping….

Sarina

 

Looking for more info on software & technology?

Which scheduling software?

Diary glasses

Continuing on from my post “Cliniko + Xero”, I wanted to share some more thoughts on scheduling software.  In particular, scheduling software that integrates with Xero.

I found that once I started looking into these types of software solutions it was like a vortex dragging me in deeper and deeper.  So many options – all offering slightly different features and aimed at slightly different target markets.  It took all my willpower not to drown in the sea of information and to remain focused!

So after extensive research, I came up with 5 software solutions that all have something to offer the small business owner looking for scheduling software.  Some are more suited to the health and well-being industry, some are aimed at the hair and beauty industry and some are general in nature and could suit consultants or personal trainers. They’re all hosted in the cloud, so no need to mess around installing software. Being hosted in the cloud also means you can access them from mobile devices. They all offer the ability for the business’ clients to book appointments for themselves online.

Once you outgrow booking in client appointments with paper and a pen, these types of software solutions are a huge asset to the busy business owner. They offer so much more than appointment scheduling and are complete practice management systems.

I’m only covering the basics here.  This list doesn’t cover everything that you’d want to know before making a decision to commit to one solution over another.  It will give you an idea of some of the differences, though, and an idea of cost.  Prices are in Australian dollars and include GST (as at the date of writing).

xero scheduling app comparison

My research has uncovered many more variables between each of the products listed.  Each of your businesses is unique and has its own needs – I would recommend you delve deeper than this table and look beyond the “features” listing on the respective software websites.  Alternatively, invest in the services of a Xero adviser who can do the research for you. It will save you a lot of time and they will also be well placed to assist you with your Xero integration if needed.

Looking forward to sharing more of my findings – there are some great small business solutions out there that integrate with Xero.

Happy bookkeeping…

Sarina

 

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Cliniko + Xero

 

Bookkeeping desk laptop software

I’ve been having a good look around Cliniko lately, and have a client who is particularly happy with it.  She’s recently integrated it with Xero, so I thought I’d give a bit of an insight into the software.

Cliniko is a cloud based practice management software that can be integrated with Xero accounting software. It’s particularly suited to healthcare professionals – so counsellors, massage therapists, chiropractors and the like.  They have over 20,000 healthcare practitioners worldwide using their software.

Client bookings are managed in Cliniko and as invoices and invoice payments are entered this information feeds through to Xero daily. If set up correctly your reconciliations in Xero are quick and easy to do and you have access to accurate, more powerful financial reporting in Xero.  As your business grows you can take advantage of Xero’s payroll.

You can add treatment notes and client letters can also be prepared and printed or emailed directly from the software. Clients can book directly through your calendar and the email or SMS appointment reminder feature can help reduce appointment no-shows. Different methods of client payments are catered for, such as EFTPOS and cash. Basic financial reporting is available and you can get good insight into client bookings and missed appointments.

It’s important to note that information entered in Cliniko feeds through to Xero, but changes made in Xero don’t feed back to Cliniko. If there are problems during the integration stage and data has been linked to the wrong accounts in Xero then these will need to be identified early and the adjustments will need to be undertaken in Xero.  An understanding of your business Chart of Accounts and Xero reporting will help here. The date you choose as your integration date is also important.

You can try out Cliniko yourself by signing up for a 30 day free trial.  During this time you can integrate it with Xero and get a feel for how the two work together.

Some other alternatives for health practitioners, that currently integrate with Xero, include Timely, Mindbody and Coreplus. They’re at different price points and the features that are offered will vary. Many software providers charge per practitioner.  Tip:  if you’re in Australia the online prices are often quoted as GST exclusive, so don’t forget to factor the extra 10% into the cost.

Xero have over 500 apps that can be integrated with their software – be sure to research all the options available to find the one best suited to your particular business.  This can take some time.  Some things to consider are whether you are a solo practitioner or have a team, whether you have multiple practice locations and whether you need the ability to do online Medicare claiming.

Do you use scheduling software in your business? What do you love about it?

Happy bookkeeping….

Sarina

 

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Bookkeeping tips for tradies

Tradies tools drill spanner

Receipts

Keeping receipts can be annoying and it’s easy for them to get damaged or lost, but when you think about each one as another tax deduction they take on a whole new meaning.  My top tip is to take a photo of each one so you can save it electronically.  The Australian Taxation Office accepts digitally saved copies of receipts that can be clearly read. Keep a plastic or material folder in your ute or van, write “Receipts” on it and put each receipt in here for safekeeping until the end of the week or month when you have a chance to enter it in your books. Once recorded, file it away in a labelled folder in date order. I keep electronic copies of all receipts, save a copy within my Xero accounting software and also have back-up copies on my laptop and a USB.

Don’t mix personal with business

One of the first things you should do is to open a separate bank account, solely for business purposes.  Use this account for business spending only and ensure all customer payments go into this account. Mixing business and personal spending can turn into a headache very quickly and can be easily avoided.

Vehicle expenses

As a tradie your business vehicle is probably your daily transport, storeroom, office, lunch room etc etc. You are going to cover a lot of kilometres in a year and so it’s important to get the right amount of tax deductions.  There are a few different methods of claiming your vehicle expenses – the ATO website explains them pretty clearly.

Equipment

You will no doubt have invested in good tools and safety equipment that are used in the running of your business.  Keep the details of all this equipment.  This can be done in a basic spreadsheet or Word document.  Include price, brand, serial numbers and where you bought them.  This will help with end of year depreciation (something your accountant can do for you) and is also helpful for insurance purposes.

Get a record-keeping system in place ASAP

This can be an Excel spreadsheet or accounting software – the important thing is to get a system early on.  Your priority in the beginning may be knowing you have consistent work and enough cash in the bank to cover your immediate expenses, but down the track being able to get easy access to your financial information (most profitable services, which clients are slow payers etc) can be the difference between having a struggling business and a growing, successful one. If you have the funds I would recommend using accounting software from the beginning. A good bookkeeper or accountant can help you choose.  My tip is to get a free trial, make sure it does everything you need it to and that your bookkeeper/accountant can work with it. I previously made a short video called 3 Simple Steps to Getting Your Bookkeeping Sorted.  You might also like Do I Need to Use Accounting Software?

Keep an eye on your bank account

If you get into the habit of checking your bank account regularly you will get a feel for what time of the month loan payments come out, when funds are running low, if there is any suspicious activity etc.  My software is linked to my bank account and every day I can see any bank activity from the day before.

Get customer contact details

Preferably more than 1 type in case you need to follow up unpaid invoices. If you are extending credit to some customers by allowing them to pay at a later date, it’s only a matter of time before you find some customers that won’t pay you on time or will try to avoid paying altogether.  By having several ways to contact them (email, phone, letter) you can follow up unpaid invoices easily. My top tip – keep a written record every time you contact a late paying customer and include dates, what was agreed and who you spoke to. For more help on this topic read Top 6 Tips – Keeping on Top of Customer Payments.

Plan for tax

Open a separate bank account and transfer a percentage of your income aside each month or quarter. Tax time can be stressful when you are running a business so avoid having that extra worry of trying to come up with a large amount of money for tax in one hit.

GST registration

At the time of writing this post the GST threshold is $75,000.  Keep your eye on your GST turnover throughout the year to see if it’s edging towards the threshold – at which point you’ll need to register.  For more of my tips on GST read Common GST Mistakes and BAS Tips for Aussie Small Business Owners.

Insurance

Make sure you have the right insurances.  As a Registered BAS Agent I have to have certain insurances in place in order to keep my licence and this is also the case with many other professional bodies.

Thank you to all my readers of the Savvy Bookkeeping Blog.  You may have noticed I love writing about small business and not-for-profit bookkeeping. I share more useful and fun bookkeeping information and videos over on my business Facebook page – Festival Bookkeeping.  Why not come over and follow me there? Love to hear from you.

 

Happy bookkeeping…

 

 

 

Xero – One of the features that saves me time

working-with-xero-on-laptop

There are a lot of features Xero has that save me time whilst I’m wading through merrily singing my way through my bookkeeping.

One of my favourites, though, is one of the most simple and basic features that Xero offers. The feature I’m talking about is copying transactions.

To give you an example, I do very similar work for a client each month, with a few changes here and there.  Because I like to be transparent in how I charge I include extra detail so that clients can see exactly what I’m charging them for – therefore my Invoices can sometimes be lengthy.  I wrote about this in my previous post 3 Simple Tips to Improve Cashflow.   I don’t invoice at the same time of the month every time, so automatically repeating Invoices isn’t the best option in this case.

When I’m ready to charge those clients I simply search for that client’s name in Xero, click on the last Invoice and copy that Invoice.  I copy by selecting Options then Copy in the top right hand corner.  I can then tweak it with any adjustments needed, but the bulk of the information is already there and my wording is consistent from one Invoice to the next.

Copying also works for transactions like Spend Money and Receive Money as well.

I try to remember to work smarter and not harder and this is one of those simple things that makes a difference when it comes to the sometimes very time consuming task of small business bookkeeping.

What is one way you work smarter and not harder?

Other tips on working smarter, not harder:

 

 Happy bookkeeping…

 

Small business owners – Wages or Drawings?

working-at-table-with-laptop

The issue of paying yourself money from your business can be confusing.

Technically, a Sole Trader cannot employ themselves. Money a sole trader takes out of the business for personal use is classified as “drawings” and is not considered wages for tax purposes. Drawings are not allowable deductions for the business.

Transactions that you record using the account Drawings are not reported in Activity Statements that are lodged with the Australian Taxation Office.

This is also the case for someone who has their business set up as a Partnership. At law, you cannot be an employee.

If your business is set up as a Company, you can be an employee of the company.  You can pay yourself wages and would therefore withhold PAYG withholding tax if your wages are above the tax free threshold.  Unlike drawings, wages are allowable deductions for the business.

Transactions that you record using your “Wages” accounts are also not reported in the “Goods & Services Tax” section of your Activity Statements – only the “PAYG tax withheld” section.

Because Drawings and Wages are both outside of the GST system the tax codes to use in your accounting software are as follows:

Xero = BAS Excluded

MYOB = N-T

Reckon Accounts = leave the tax code blank

 

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Happy bookkeeping…

 

3 simple steps to getting your bookkeeping sorted

3-simple-steps-to-getting-your-bookkeeping-sorted-wordpress

If you have just started a business you may be stressing about whether you are on the right track with your accounts.  If you have been in business a little while you may be wondering if there is an easier way to keep on top of your accounts.

Once you start looking into the various accounting software options out there, unless you are in the business of bookkeeping or accounting, it’s not uncommon to become overwhelmed or confused.

I like to keep things simple, so I’ve come up with 3 simple steps to help you out and get you started.  These are 3 steps I’ve used to get clients up and running with accounting software.

3 simple steps to getting your bookkeeping sorted (Video)

Importantly, don’t forget to try your software out for free first.  Get a feel for it and make sure you can easily get answers to any questions you may have via their help centres, forums, videos, email support etc.

Happy bookkeeping…

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5 reasons using Excel may be holding your business back

Laptop Xero

Excel is a great tool for business.  I like to use it to manually check payroll calculations, particularly when setting up new accounting software for a client.  However, it’s not always the best choice for business bookkeeping.

Here are 5 reasons that it might be time to move on from Excel:

1.  Doubling-up of transactions

In Excel you don’t get a warning if you try to enter the same bill number or invoice number twice, whereas you would if you used accounting software. Doubling up on accounting transactions can get you into a real mess.

2.  Time consuming

It is time consuming to set up a detailed, useful spreadsheet.  You need to have the end result in mind before you even start and then work out a design that will get you that end result.  A lot of time is wasted if you are part way through setting up a spreadsheet only to realise that it can only do half the job you need it to do.  For example, you might be able to set up a spreadsheet that tracks all of your income and expenses, but it is tricky and time consuming to set it up to track tax codes for your Business Activity Statement as well.

3.  No audit trail

If more than one person is entering information into a spreadsheet it is difficult to tell who has entered or changed information.  This leaves the door wide open for fraud to occur.

4.  Costly errors

Excel spreadsheets can be linked to other Excel spreadsheets, which can save you time.  However it is easy to link a cell incorrectly which results in errors that can be hard to detect.  You could be using the same spreadsheet for months without realising it is picking up incorrect figures from another spreadsheet.  Just like in Reason # 1, Excel doesn’t warn you of potential errors.  A quick internet search for “spreadsheet mistakes” shows just how costly some of these errors can be.

5.  You still need to invest time into learning how to use Excel properly

You can teach yourself how to use Excel and set up spreadsheets, however with such easy to use accounting software on the market now, isn’t your time better spent learning software that will do most of the hard work for you?  For example, using software with automatic bank feeds, such as Xero, can reduce time spent on manual data entry once set up correctly.