Insights on Tax Reporting
Xero – The future of accounting software
If youre in business, you should be aware of the changing nature of accounting software. Historically the most common business accounting software for small business was MYOB or Quicken. However the past few years has seen a seismic shift to Cloud accounting.
For those business owners not aware of Xero or similar online accounting solutions, I thought it would be helpful to outline a few of the benefits and answer some common questions.
Benefits of Xero
- Bank data feeds. Xero allows your bank statement transactions to be automatically imported into your accounting file on a daily basis. This means huge time savings in data entry.
- Bank Rules. You can set up automatic coding rules to automate and speed up the processing of the transactions imported through the bank data feeds.
- Matching of Invoices and Bills. As payments and deposits go through the bank account Xero matches these against invoices or Bills that you have processed through the software, for further processing efficiency.
- Multiuser and multisite access to data file. Because your data file is online, you or your accountant can access the file from wherever you are (as long as you have internet access). This means no more issues backing up and sending a data file to the accountant or between home and work.
There are a few common questions that arise when speaking to clients about Xero.
Q: How secure is my data file?
A) Xero has never lost any client data! In my experience clients occasionally will lose data through a data file stored on a client’s own computer, due to computer crashing and errors in the data. This has never happened with Xero.
The security platform is the same as that used by internet banking. If you are comfortable with internet banking security, you can also be comfortable with Xero
Q: Who can access my file?
A) Xero allows multiuser access to anyone that you ‘invite’ to your company. You can also give users different level of access rights depending on what they need to do. No unauthorised person can access your file!
Q: Does Xero deal with Payroll?
A) Yes, there is a fully integrated payroll system within Payroll
Q: Does Xero have inventory?
A) The current inventory system within Xero is very flexible. There are add on partners that link in with Xero and some of these provide very detailed inventory, however they are an additional costs. Xero estimate that a fully functioning inventory system will be incorporated in within the next 12-18 months
All of this adds up to software that compares favourably on a cost basis with more traditional accounting software, but outperforms them in nearly every area. This means huge time savings and therefore cost saving from a data input point of view. It also means great integration and reporting improvement with your accountant, which will mean more timely pro-active advice.
Contact us to find out if Xero will suit your own business accounting needs.
Kurt Clifton CPA