7 ways Xero can help streamline your bookkeeping and free up your time

Xero Certified Bookkeeper Brisbane

Xero has emerged in the past decade to become most popular accounting software for small businesses in Australia. We look at how we can unlock the power of Xero to automate your bookkeeping, simplify your business admin, and free up time to spend in your business.

Here’s 7 ways how Xero can help your streamline business and free up your time.

1. Simplify Payroll

Payroll can involve a time consuming manual data entry in order to process your pay-run.  How can we automate this?

Xero Payroll is an ATO Single Touch Payroll (STP) compliant accounting software.  Which ensures compliance with the Australian Government legislation and you’re up to date with the latest rules and obligations.

Importantly, once set-up and optimised for your business, it streamlines payroll tasks like;

  • Entering Paid Leave or Leave of Absence
  • Sending payslips and pay notifications
  • providing employee self-service to view payslips
  • Calculating and reporting payroll taxes and super

In terms of facilitating bank transfers, Xero Payroll can submit your Payroll through a batch bank file, which uploads directly to your online banking service.  No more tedious data entry to process individual employee pay transfers.

2. Automate Accounts Payable

As a cloud based software service, Xero is always-on, and always working in the background.  This offers a number of advantages for managing accounts payables, and improve your ‘cash flow’;

  • Centrally store all your bills and receipts online
  • You can access all your bills online through any device so you can check your accounts payable balance, and view outstanding bills by due date.
  • This ensures not only that you’re paying bills on time but, more importantly, allows you to optimise your cash outflows (don’t pay before you have to)
  • If you want to save further time, you needn’t be ‘watching’ your bills.  You can schedule payments for a future date and Xero will process them at the date your define
  • Additionally, you can also create batch payments, so you can pay multiple bills at once.

A notable feature is Xero Bills to Pay. This enables you to set up and pay multiple bills as they are due (scheduled batch payments).  When you batch payments together, Xero creates a bank file which uploads directly via your online banking service.  It is connected to all major banks in Australia.

3. Optimise Customer Invoicing and Accounts Receivables

This is of course the most important part of our business. We want to get paid and we want to get paid fast. Xero has a number of features that can help you with this;

  • Create your own branded invoice with clearly labelled payment terms,  due dates and payment methods (including online).
  • Scheduled invoices for recurring transactions and subscription based services
  • You can setup automated follow up payment reminders with outstanding invoices including sending of account statements. That way you don’t have to worry about chasing.
  • Keep an eye on your overdue invoices. Access your accounts receivables via any device so you can quickly see which customers are outstanding and be able to take proactive steps before allowing them to get into more debt with you
  • Because Xero is ‘in the cloud’ it also offers open integration with debt collection services if things get that far.

4. Outsource record keeping and bank reconciliations

Properly recording (coding) your expenses and other transactions, and reconciling these against your bank statements can be fiddly and time-consuming work.  For most small business owners this is probably the most frustrating of tasks.

Xero has a number of time-saving features that can help reduce this type of work;

  • As a cloud software system, Xero is connected to all major banks in Australia and automatically get daily feeds of all your bank transactions
  • Correctly configured and setup for your business, Xero can then automatically code each bank transaction to match your chart of accounts (how you’ve setup your bookkeeping)
  • Xero will then automatically match your bank feed against existing recorded transactions (bills or sales) so that they are properly recorded in your books
  • You can also use Xero to create “bank rules” and auto codes for non-matching transactions.  This allows for fast automatic coding of repetitive transactions, for example, for your POS terminal transactions.

So when the time comes and you receive your monthly bank statement, all you need do is enter your opening and closing balance, statement end-date, and click “reconcile”.  Everything should balance nicely at the click of a button.

5. Reduce Clutter with Paperless Record Keeping

We’ve been aspiring for a paperless office for decades, but bookkeeping and financial record keeping has always been the biggest hurdle to achieving this. As business owners we need to stay compliant with the Australian Taxation Office (ATO).  If we get audited, we need originals and we need to keep them for 7 years right? 

Not anymore. Xero allows you to attach your invoices, receipts and other paperwork to your transactions and store them centrally in the cloud.  This means you can destroy the original paper versions.  As your digital versions are stored in the cloud, they can be referred to anytime by yourself, your bookkeeper, and even the ATO if you get audited.

No more stacks of paper, throw out those binders, filing cabinets and shoe boxes.

6. Stay on top of your business health with meaningful financial reports

We think tracking invoices and customer payments is the most important things to track in our business, when in reality it paints only a small part of our overall financial health. Accounts receivables and payables are a snapshot of our potential cash situation, but a better story is told through a cash flow statement.  Sales and expenses helps us understand our day-to-day performance, but until you capture all costs such as depreciation and interest, we don’t know our true financial performance. This you get from a fully reconciled periodic income statement. And should we choose to borrow against our business or consider selling, we need to understand the accounting value of our business. For this we can refer to our Balance Sheet

There are many more bespoke and customised reports your business might need on a regular basis such as P&L by region or Cash flow by product line.

Accurate and timely financial reports are critical for a business manager to have on hand.  It helps identify areas which need improvement or further attention.  

Xero provides a suite of standard financial reports, or with the help of a Xero certified bookkeeper, can be tailored and setup for your unique business needs.

7. Work where you want (remote work)

An advantage cloud based accounting software has over traditional desktop software is that a ‘cloud based computer’ can be accessed by any device from anywhere on the internet. You’re no longer tied to one computer where your accounting software and licence is installed.

If you have internet access, you can be working in Xero.  Whether you are on the road, working from home, or operating your business from different locations, you can be staying on top of your bookkeeping. Importantly, if you use a bookkeeper to help out with your books, he or she doesn’t even need to be in the same office as you.

Article written by Rodney On at Brisbane Central Bookkeeping.

Rodney is a Xero Certified bookkeeper based in New Farm, Brisbane. Providing Xero Set-up, Xero Training, and Xero Bookkeeping services.

Get on-demand / remote Xero support from as little as $12.50 (15 minute consult)

Don’t delay – Contact Rodney today (before he’s booked out).