As business accounting software, Xero provides a range of powerful features and tools to help small and medium businesses.
In this article, we’ll give you an outline of what this platform has to offer, and how this can benefit your business.
Ready to start using Xero now? Find out more about how the Xero specialists at Liston Newton can help you with your accounting.
Streamline your accounting with Xero
Xero began its life as accounting technology software for small to medium-sized businesses, and that’s where its key strengths lie.
Within the platform, there are a number of important features that allow business owners to streamline their accounting and bookkeeping activities. These Xero product features include:
- Invoicing: Xero makes it easy for business owners to raise and send invoices, and their new e-invoicing feature only makes things easier. With the option of manually entering all the information you need or a handy pre-filled option, you can create an invoice with just a few clicks.
- Payroll: Xero’s payroll function helps business owners manage their day-to-day payroll tasks. You can track employee work hours, approve leave, and pay and report employee super contributions with a single click thanks to Xero’s new auto-superannuation feature.
- Bank reconciliations: One clever feature is the ability to integrate bank feeds directly from your business’ bank account. This securely imports your bank details into Xero every day, making it easier to keep track of your financials. You’re in control, as you tell Xero which transaction is which by confirming which account it goes to. You can also check your finances at a glance using your Xero dashboard.
- Pay bills: Hate paper? Xero features paperless record-keeping, and you’re able to email bills and documents directly to your Xero account for future payment. A side-by-side feature allows you to view bills in the same window where you enter your data — no more switching between tabs. You can bundle bills together and schedule payments to save time, and Xero’s cloud capability lets you access your account anywhere, any time.
- Information security: Xero is highly secure and uses two-step authentication to help you protect your account, with a unique login code generated by an app on your smartphone. No one can gain access to your business’ data unless you invite them into your account.
- A handy mobile app: The Xero mobile bookkeeping and accounting app lets you manage your business’ financials from wherever you are. You can pay bills, raise invoices, and manage your payroll when you’re out and about.
As well as these big-ticket product features, Xero includes a raft of other features aimed to make business accounting easy.
You can create quotes at the click of a button, manage purchase orders, track your inventory, and even create detailed financial reports when you need them. There’s even a smart contact list system, so you can get a quick snapshot of the suppliers and customers you do business with.
Manage your business’ performance
Xero has expanded to enable more than just bookkeeping. Among Xero’s product features are a selection of tools that help you track and monitor your business’ performance and data.
- Dashboard summary of your total cash in and out: You can check your current month’s inflows and outflows against historical data.
- Account watchlist: Create favourite charts of accounts that you refer to regularly, and keep them within easy reach on your dashboard.
- Business performance report: Located in the Accounting tab, under Reports, this report provides you with an in-depth analysis of all the financial ratios that you need to keep track of.
- Easy-to-run reports: Investigate every part of your business in-depth with Xero’s all-purpose, easy-to-run reporting function.
Project management tools
Among its strengths, Xero’s product features include some clever project management tools, allowing you to keep tabs on your jobs to you ensure you get paid on time.
- Manage your workflows: Xero Projects integrates with Trello, the collaborative project management tool. This means you can bill time to your projects using Trello, which gets automatically logged in Xero under that specific project invoice.
- Streamline your staff timesheeting: While you don’t need to look over their shoulder, Xero’s timesheeting tool and staff time overview makes it easy to ensure your staff are working on the right things. You can load this time directly to Xero Payroll, so there’s no double-handling of data, and their hours are logged accurately in one central location.
- Manage staff costs: Setting hourly rates for your staff in Xero lets you calculate your overall profitability at an individual project level, and see how your staff costs impact your bottom line.
What Xero is missing
While we love Xero for its product features, there are some notable areas where it’s missing a few things.
- No contact number: Xero is a completely cloud-based platform, so there’s no direct contact number for customer service issues. While you get free, 24/7 online support in the form of the Xero Central support hub, you can’t directly speak to someone who can answer your questions. While you can’t call Xero, you can ask questions through their Support Hub, and they can call you to offer support if need be.
- Expanded inventory tracking: While there are some capabilities, Xero’s inventory tracking functionality is limited. It may be useful for small businesses that need a basic inventory management tool to monitor stock levels, but as your business size grows it starts to fall short.
- Make payments directly: Xero has limited options for businesses that want to pay bills. Currently, business owners need to enter the Xero platform in order to pay bills individually or create batch payments. December 2019 saw Xero roll out Xero Bill Payments, a tool that allows you to send payment details directly from Xero to a bank — provided you’re with NAB. Xero is currently working on making this available for all major banks in the future.
Why we choose Xero
Xero has a wide range of useful product features that make bookkeeping and accounting easy for small businesses.
- Xero makes it easy to get started: If you’re already using another accounting platform, Xero makes it easy for businesses to get started. They give you clear instructions on how to transfer your accounting data to the platform. And from there, through the mobile app, you can access your data and accounts from anywhere you need. There’s also a 30-day free trial, so you can test it with confidence before you commit.
- Put your bookkeeping on autopilot: Xero’s ability to automate your day-to-day accounting tasks is one big reason we recommend this platform. With just a few simple clicks you can take the hassle out of chasing up invoices, managing your transactions, and paying your bills.
- Streamline your accounting: Xero accounting gives you one central place from which to manage your finances. With a quick snapshot on your daily dashboard, you can see how your business is tracking. Integrations like Xero Payroll and Xero Projects allow you to take control of discrete business functions, reducing double-handling, and streamlining your processes. And you can bring your accountant on board too, giving them direct access to your account to ensure your business remains on top of its tax and reporting obligations.
Xero vs MYOB
When it comes to Xero vs MYOB, Xero is geared more towards small and medium businesses. While MYOB is catching up in terms of product features, it’s still not quite at the same level that Xero users enjoy.
Xero vs Quickbooks
In terms of Xero vs Quickbooks, we prefer Xero due to its availability of more users to connect, and expanded integration range.
The final word
Xero is a clever, intuitive accounting tool that can really benefit small and medium-sized businesses. It’s easy to get started, powerful in its functionality, and is designed to save you countless hours on your bookkeeping.
With all its product features and tools, it is clear to see why we adopted Xero as our accounting technology platform of choice.