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Xero Tips for More Efficiency

2020
13
JAN

Have you seen the Xero adverts on TV or heard them on the radio?  Xero accounting software has become extremely popular and now has more than 2 million subscribers around the world.  Perhaps you are already a Xero user but feel that you are not using it as well as you might?

Xero Silver ChampionI have been a Xero partner since 2011.  Our practice is a Xero Silver Champion, we have Xero Certified Advisors, and we are experienced in moving accounts data to Xero.  We use Xero on a daily basis for our clients, submit VAT returns via MTD and provide training for those who want to use it themselves.  

Xero is very user friendly and works well for the majority of small and medium sized businesses.  However, whilst it is straightforward to use, as with anything, the information you get out of it is only as good as the information you put in.  In order for Xero to work well for you and your business you need to understand some basics, so here are some tips to help you.

Understand the structure of Xero Account Codes

Every transaction has to be allocated to an account code.  Choose the correct account code by looking at the Chart of Accounts - revenue or expense, asset or liability - and be consistent throughout.  Allocating an expense to a revenue code or vice versa will lower your income or your expenses because they will be shown as a negative figure.

Know your VAT codes

If you are VAT registered Xero provides a variety of tax codes to choose from when entering a transaction.  Know which tax codes are applicable for your sales and which you should use for your purchases.  Again be consistent with what you choose.  It is easy to choose 20% VAT on purchases in error when you meant to choose 20% VAT on income.

Review your transactions

Review all the transactions you have entered using the Detailed Transaction report.  This will help you to identify inconsistencies more easily.

Check the bank balance in Xero

If your bank transactions feed into Xero, regularly check the bank balance in Xero against your actual bank balance on the same date.  Lately we have experienced numerous missing and duplicate transactions from a variety of different banks and this, of course, will significantly affect your accounts.

Send electronic bills directly to Xero

Within Files there is an email address which you can use to send documents directly to Xero.  These will remain in the Inbox until you create a transaction from them from the menu.  The document will then be attached to the transaction for future reference.  You can also use the Xero app to take a photo of a receipt and send it to the Inbox for you to create a transaction.

Investigate Xero Reports

There are numerous reports to choose from in Xero.  Some time spent investigating what each one is like may give you some information about your business that you didn't realise you could get.  Almost every report can be "starred" to make it your favourite so you can easily find it again in your drop down Accounting menu.

 

Xero has been a game changer for many businesses enabling them to have a much more up to date view of their business finances.  But, whilst you may be fairly confident using it, some training or support to understand it or use it better has proved very helpful to many of our clients.  We provide bespoke one to one training so you go away knowing what you need to do and how.  I will guarantee that you will learn far more in your training session than you anticipated and will leave being able to use Xero more efficiently.

Contact us on 01722 341820 to arrange your bespoke Xero training.

Related Tags:  Accounts software |  Training |  Xero | 
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