If you are using Xero you will probably have heard that this is the market leading cloud accounting software in the UK. You may be expecting minor miracles, where everything is easy to do straight out of the box. You should have immediately seen improved visibility over your business numbers. But unless you know some of the tricks of the trade you may not be completely convinced. Here are our 5 top tips to get the most out of Xero.
1. Do it little and often
Xero won’t magically do everything for you without any work on your side. The longer you leave it the harder it will get. I log into our own Xero account pretty much every day so I know how much money we have got in the bank, which suppliers we need to pay, and who is overdue paying us. If you aren’t working through and updating your bank reconciliation at an absolute minimum every month then you just don’t have the information you need to run your business effectively. Little and often means that you can spend a few minutes here and there instead of having a mountain to climb when you log in.
2. Sort out your invoice settings
If you invoice out of Xero then have a look and see if your invoice settings are up to scratch:
- Make sure that you have put your payment terms on your invoices
- Set Xero up to apply those same payment terms automatically so you never need to work out an invoice due date
- Upload your logo to make your invoices look pretty
- Include how you want to be paid on your invoices – at the very least you should have your bank details on there
- If you use something like Stripe or GoCardless then add those to your invoices as payment methods.
3. Set up your bank feeds
The easiest way to get useful information into Xero from the get go is to set up your bank accounts and to click on the “Get Bank Feeds” button. Now that we are in the land of Open Banking your bank feeds will be free. They enable your bank to (securely) push data into Xero, and it will sit there ready and waiting for you to match against sales invoices or receipts, or to point to a useful category. If you are still importing CSV bank statements, or worse entering each transaction manually, them one of your quickest wins will be to get your bank feeds up and running.
4. Throw away your receipts
Xero has built in functionality that allows you to take a picture of your receipts. Even better have a read of last week’s blog post which looks at one of our favourite apps, Receipt Bank, which really does mean that you need never have to wade through piles of receipts ever again. Don’t risk missing out on claiming tax deductible expenses, or not getting back all of your VAT.
5. Overhaul how you manage your debtors
Managing your cashflow is one of the hardest things to get right as a business. Particularly at the moment you need to keep a close eye on whether your customers are paying you promptly. There are a few things you can look at to make it as easy as possible:
- Ask your clients to pay up front. You wouldn’t be surprised if you have to pay for a hotel when you book, or for your MOT when you collect your car. Don’t offer your clients long payment terms if you can avoid it
- Invoice immediately when you complete a job. If you have an iZettle card reader then you can collect payment by card there and then
- Get your customers to set up a direct debit mandate when they sign up. Using something like GoCardless makes this easy and cost effective. GoCardless integrates with Xero so payments from your customers are automatically reconciled, and you can set up a payment method which shows on your invoices
- Send out reminders for when your invoices are due to be paid. Xero has it’s own functionality which will do that for you automatically, or you may be better suited to a more sophisticated app such as Chaser.
Make sure Xero is beautiful to use, not just beautiful to look at
If you aren’t 100% happy with your current set up then get in touch and ask us to run a digital healthcheck on your Xero account.
