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Linking a Financial Forecast with Xero and Excel

Excel Will Help You Work Out the HOW of Depreciation

learn excel online training courseWe recently updated our advanced Microsoft Excel Training Course content. It now contains a case study, by way of an extra exercise workbook, using a granny flat building project to create a financial forecast.

We chose a granny flat building project for our case study because it’s an investment decision quite a lot of people with or without a business have made. It’s also a capital asset that can be depreciated over time. Therefore it has the potential to affect your taxes in lots of different ways.

Our Excel Training Course, with its granny flat financial-forecast case study, will teach you how to use Excel to create a financial forecast, which you can then replicate for your own investment — whatever that may be.

Your bookkeeper uses Excel to calculate depreciation

When you build a new structure, such as a granny flat, which you intend to rent out or use for businesses purposes — i.e., it’s an investment and not for your own personal use — the building can be depreciated along with some of the fittings and finishes (floorings, curtains, paint, etc). That’s despite the value of the land upon which the granny flat is constructed increasing in value over time.

Once you’ve set up your financial forecasting file in Excel using the correct formulas that will update as the investment progresses, you’ll be able to track all of the future costs, income and depreciation in that spreadsheet.

Input depreciation into Xero

Excel will calculate the depreciation amounts for you, which you should then enter into Xero. We cover how to deal with depreciation in our Xero Bank Reconciliation Course, because lots of businesses own, or will own, a capital asset at some point.

However, this doesn’t tell you how to determine the depreciation amounts, which most business owners have to get their bookkeeper to work out for them. Most bookkeepers work this out in Excel based on the depreciation rates provided by the ATO. However, if you have already created a financial forecast in Excel, you won’t need to get your bookkeeper to do this for you.

Individuals can claim depreciation too

Even if you’re not a business owner, but you’ve still built a granny flat that you intend to rent out, you can claim depreciation in your tax returns. Instead of entering the depreciation into Xero, you’d include it on your annual tax return, so it’s really important that you work this out in Excel first and regularly update it.

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Once you know how to use Excel for financial forecasting, you can use the same formulas and modelling for any financial forecast — be it for a granny flat project, business investment, anything that requires you to make a financial decision. Visit our website for more information on our advanced Microsoft Excel Training Course, with its new granny flats case study.

Do you want to brush up your Xero skills? Or perhaps you use MYOB but want to get a handle on Xero? Check out our suite of Xero training courses — all available for one low price. 


Online bookkeeping accounting training courses for CPD points

EzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants. We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.


 

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There’s So Much Cool Stuff You Can Do With PowerPoint

PowerPoint: The Great Visual Aid to What You’re Saying

PowerPoint online training course
Save densely-worded slides for university lecture rooms: keep PowerPoint slides concise and use your presentation as a way of illustrating or highlighting what you’re saying.

Many people don’t realise what an excellent design tool PowerPoint is. It can be used for a lot more than just creating slideshows and presentations and is a great marketing and design tool for all kinds of business functions.

Generally speaking, when using PowerPoint, you should feature only one idea to a slide. A PowerPoint presentation is not an essay. It shouldn’t be filled with verbose text (unless perhaps you’re in a university lecture). In fact, as you will learn in our updated PowerPoint Training Course, sometimes a PowerPoint slide shouldn’t contain any text at all, or at least, very little. Continue reading There’s So Much Cool Stuff You Can Do With PowerPoint

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Which Transactions Affect Balance Sheets?

Avoid Any Nasty Surprises: Balance Sheets Matter!

EzyLearn Xero Balance SheetA business’s balance sheet is a snapshot of its financial position at a particular period of time, which is not to be confused with a profit and loss (P&L) statement. Unlike a P&L, which just shows whether the business is making a profit or loss during a given period, a balance sheet, will eventually, show nearly every activity that has occurred within a business.

However, there are some transactions that will show up immediately. You’ll learn how to run a balance sheet in our Xero Daily Reconciliations Training Course, but we wanted to show you the transactions to look out for and why.

profit and loss statement xero online training course
A balance sheet reveals the nitty gritty of your business’ transactions.

The purchase or sale of assets

When an asset, such as a car, is bought, it will reduce the cash account and increase the fixed-assets account. Both of these accounts are listed in the asset portion of the balance sheet, however, cash is part of the current assets section and fixed assets are part of the long-term assets section.

When an asset is sold, the way the cash is accounted for is a bit more difficult. Here, both the asset’s book value and any accumulated depreciation are removed from the books at the same time that the cash account is increased by the sales price. If the sales price does not equal the book value, the difference is accounted for as a gain or loss on the sale of equipment. This gain or loss is recorded on the P&L statement.

Purchases on credit

When a business purchases supplies or inventory on credit, the business will debit the asset account (supplies or inventory) and credit the accounts-payable account. Almost always, accounts payable are considered to be current liabilities and are shown at the top of the liabilities section of the balance sheet.

Debt and lease arrangements

When a business issues debt or enters into a leasing arrangement, a liability must be recorded in the long-term section of the company’s balance sheet. For example, if a company issues bonds for cash, the company would debit cash and credit bonds payable in the simplest bond-issuance scenarios.

Capital-lease transactions affect the balance sheet in a similar manner. When entering a capital-lease arrangement, the business will debit a fixed-asset account to show that the company has taken economic possession of the leased asset. At the same time, the business will credit a capital-lease obligation account to show the offsetting economic liability.

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For a balance sheet to be correct, you must code each transaction correctly in your accounting software. Our Xero Daily Reconciliations Training Course covers balance sheets, and much, much more. Why not enrol today?

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Online bookkeeping accounting training courses for CPD points

EzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants. We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.


 

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Which Granny Flat is a Better Investment?

A Real-Life Granny Flat Construction Scenario

learn excel online training courseChoosing between a one-bedroom and two-bedroom granny flat is a decision you’ll need to make early on in the project, and it’s largely a financial one.

EzyLearn’s Microsoft Excel Training Course includes a new case study, “Investing in a Granny Flat”, which uses the construction of a granny flat as a real life example to help you to better understand how to develop a financial forecast for an investment.

Determine construction and ancillary costs

How much it will cost to construct both a one-bedroom and two-bedroom granny flat is the first step. You need to work out how much it will cost to get each granny flat constructed to the point that someone can move in, as well as any ancillary costs, like council fees and levies, real estate management fees interest rates and so forth.

Determine rental income

Some granny flat companies will give you rental income estimates, but you’re encouraged to investigate this yourself. Rental incomes are heavily dependent on your local area and the demand for that type of property. In Sydney, the demand for rental property far outweighs the demand in regional NSW. Take into consideration vacancy rates in the area and the types of property that are in demand. Areas with high vacancy rates and low demand for one-bedroom units could indicate there’s little demand for a permanently rented one-bedroom granny flat, which will put the rent down.

Determine depreciation amounts

Both granny flats will be subject to the same depreciation rate, however the amounts will differ due to the differing value of each dwelling. In addition to an annual depreciation rate on the dwelling, consider other elements of the granny flat that will also be subject to depreciation. Floor coverings, for example, can be depreciated over time. Carpeting is typically depreciated at a rate of 20 percent, where tiles are depreciated at 2.5 percent because the latter has a longer lifespan.

Determine the best investment

Add all of these costs into Excel to determine the average annual rental yield, expressed as a percentage of the property value. Rental yields are used to show the return on an investment. The higher the rental yield, the better the return is. Taken in combination with your own personal circumstances and plans for the future should help you to determine which option represents the better investment.

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Our Microsoft Excel training courses, featuring the new granny flat case study, go into much greater detail. Or view our full suite of training courses. 

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learn excel online training course

At EzyLearn, we’re committed to helping students of all our courses find better employment opportunities, become their own boss and upskill. To this end, we constantly update our courses with new, highly relevant content — it’s why we provide you with the option of Lifetime access you can always refer back to our courses as you progress in your skills’ development. 

We’re thrilled to announce our new Micro Courses which are be added to our existing courses, or can be purchased alone. These are based on real-life case studies and relate to real people in genuine, real-life scenarios. Subscribe to our blog and be alerted of updates.


 

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Basic Bookkeeping Reports in Xero: Profit and Loss

Learn How to Run a P&L Using Xero

Profit and Loss statement
Profit and loss statements should be run by businesses regularly and are required by law.

A basic, yet vitally important, report for every business owner is a profit and loss (P&L) statement. A profit and loss statement, as the name suggests, shows whether a business is running at a profit or a loss over a given period. We’ve written about why running multi-period P&Ls before in QuickBooks and MYOB is a good idea for businesses with inventory, but single period P&Ls are equally important for all businesses.

If you’re a bookkeeping newbie, a profit and loss statement, which sometimes goes by other names — income statements, earning statements, revenue statements, operating statements, statement of operations, or statement of financial performance — is a basic report you’ll learn to run in our Xero Daily Reconciliations Course. If you’re planning to work as a contract bookkeeper, you should get in the habit of running P&L statements for your clients regularly (if you’re a business owner, ask your bookkeeper to run them).

P&Ls are required by law

Depending on how a business is structured, it may be required by law to complete a P&L. A P&L shows how the revenue of the business is turned into net income by subtracting all expenses from income. They’re also useful for understanding a business’ net income, which helps with the decision making processes. A business will also need a P&L if they’re applying for a small business loan.

The contents of a P&L

profit and loss statements P&LsAlthough the process of running a P&L differ between accounting software packages, they usually all contain the same elements, depending only on the business itself. In the first section, the cost of sales is subtracted from the revenue, which highlights gross profit. The business’ operating expenses are then subtracted from the gross profit, which leaves the operating profit. Now, all of the non-operating revenues and expenses must be factored into account, after which the business’ profit or loss will be displayed.

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Because P&L statements are often used by a business’ owner to make financial decisions, to inform shareholders of the business’ performance, apply for a business loan, or as proof of income in the sale of a business, it’s important that you understand how to create one correctly. Our Xero Daily Reconciliations Training Course covers P&L statements, and much more. Visit our website to learn more or to enrol.

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online bookkeeping courses to earn cpd points

 

Did you know that EzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants?We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.

 

 

 

 

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Bet You Didn’t Know the Many Wonders of PowerPoint!

PowerPoint: The Great Untapped Design Tool

learn PowerPoint online training course
Wow – this PowerPoint presentation really is AMAAAZING!!

You know what PowerPoint is. It was installed on your computer when you bought Microsoft Office. You hate it. But have you thought that the reason you hate it is because a) you’ve never learned how to use it properly, and b) you associate it with boring corporate meetings and seminars?

If you answered YES to one or both of those questions, read on. If you answered NO, still read on! Continue reading Bet You Didn’t Know the Many Wonders of PowerPoint!

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Calculating PAYG Obligations Without a Payroll System

Third Quarter is Looming; Are You Up to Date with Payroll?

ad hoc payroll payments ExcelMost businesses using an accounting program like MYOB or Xero will use the included payroll package to manage their employees’ payroll. For businesses with only a few employees, however, the additional payroll function is an unnecessary expense.

In our recently updated Advanced Microsoft Excel training courses, we have included a micro course on ‘Ad Hoc Payroll’, featuring a detailed spreadsheet for calculating PAYG and superannuation obligations. In this instance, our micro course is a detailed spreadsheet based on a case study, so it’s relevant and applicable to real life.

PAYG and the businesses it applies to

Every Australian business with employees who are each paid more than the tax-free threshold has a legal obligation to withhold tax on their employees’ behalf. This is known as the PAYG System (or Pay As You Go), where amounts of tax are withheld from each employee’s wage payments.

Businesses that withhold up to $25,000 each year only need to make payments to the ATO each quarter; businesses withholding amounts greater than $25,001 may have to make payments to the ATO each month or as regularly as each week.

At the time of writing, the tax-free threshold is currently $18,200, which is equivalent to:

  • $350 a week
  • $700 a fortnight
  • $1,517 a month

Superannuation contributions

Again, any business that pays its employees more than $450 each month must also make regular superannuation contributions on their employees’ behalf. We’ve written in the past about the government’s clearing house called SuperStream, which allows you to easily make super contributions — for free.

But first, you need to work out how much super you need to contribute for your employees. The superannuation guarantee is currently 9.5 percent of your employees’ gross wages, which is payable on top of their wages — not deducted out of.

Using tax tables to calculate wages

Each year, the ATO produces a range of tax tables to help you work out how much to withhold from payments you make to your employees. In our Ad Hoc Payroll Micro Course, we’ve already added the most current tax tables to the accompanying payroll spreadsheet, as well as the superannuation guarantee tables.

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We feature a number of real-life case studies, which we have turned into micro courses. You can use the Ad Hoc Payroll Micro Course to determine the rate of PAYG tax to withhold and the required super contribution amounts in Excel, rather than paying to access the payroll functions of MYOB or Xero. Our Intermediate Microsoft Excel training courses will also teach you how to create a payroll spreadsheet from scratch to suit your own business. Visit our website for more information on all of our Excel training courses.

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online bookkeeping courses to earn cpd points

 

EzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants. We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.

 

 

 

 

 

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The Wonders of Microsoft Excel’s 3D Formulas

Excel’s 3D Formulas Work Across Worksheets

Excel formulas online training courseWe’ve recently updated our Microsoft Excel Training Course content, because it remains one of the most indispensable tools for small businesses — and we’ve included a new exercise workbook which takes you through all the steps involved in developing a financial forecast for an investment.

We used a granny flat project as the case study in our financial forecasting workbook, but the beauty of Excel is that, once you get the formulas right, they can be replicated for any kind of investment, not just one for building a granny flat.

The wonderful 3D formula

3D formulas are one of the other many wonders of Excel. A 3D formula is basically a reference to the same cell or a range of cells within multiple Excel sheets. They’re a convenient way to reference several worksheets that follow the same pattern, with cells that contain the same type of data.

All functions work with 3D formulas

3D formulas can be used with all Excel functions — SUM, AVERAGE, PRODUCT, etc — which means that, using a 3D formula, you can easily create a financial forecasting sheet for any stage of an investment, and easily reference that data in another financial forecasting sheet. This is invaluable because there are very few projects or investments that can be contained in just one Excel worksheet.

A project like the granny flat case study in our online Excel Training Course, contains many moving parts — there’s the initial construction, then there’s the ongoing maintenance, and the rental income to manage. It would be impractical to keep all of this information contained within the one Excel worksheet.

3D formulas can be modified with time

The best part about using 3D formulas is that you only need to specify the start and end sheets (which for ease-of-use, you could just label ‘start’ and ‘end’) and the formula will reference all the worksheets between the start and end sheets, including those two sheets.

This means that, as your investment or project grows, once you’ve got the 3D formulas set up correctly, you can just add and subtract worksheets as necessary, and the calculations will update automatically.

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Once you understand how to create and work with 3D formulas, you can use them for any project or investment that you create a financial forecast for — be it for a granny flat project, business investment or anything else that requires you to make a financial decision.

Visit our website for more information on our Microsoft Excel Training Course, which covers 3D formulas.

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online bookkeeping courses to earn cpd points

EzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants. We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.

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Depreciation and Tax Deductions Associated with Granny Flats

Working Out Your Depreciations with Excel

excel online training course financial forecasting
Ok, so you may or may not have the room for a granny flat, but either way, Excel is the foremost tool for forecasting financial investments.

If you have the room, building a granny flat on your property can prove to be very lucrative. EzyLearn has recently created a new Microsoft Excel exercise, using the construction of a granny flat as a case study, which forms part of our online Excel Training Course.

It was created to help students understand how to use Excel for financial forecasting, but it’s also useful to those interested in constructing a granny flat on their property.

Costs that will be depreciated

In a recent post, we mentioned claiming depreciation on the property’s existing dwelling. If the existing dwelling on your property is rather old, it may not be able to be depreciated. Depreciation rates are determined by the ATO, while an quantity surveyor will be able to determine the value of your dwelling. The cost of the new granny flat will be depreciated over time. Keep in mind that individual elements of the granny flat, such as the floorings, can also be depreciated in addition to the capital structure.

Most expenses can be deducted

The ATO has a long list of expenses relating to rental properties that can be deducted. If you visit their website, you’ll find that most expenses relating to a rental property can be claimed as a tax deduction, depending on the type of rental property. If your granny flat is intended as a long term rental, as the granny flat in our case study is, then nearly all expenses, including the demolition of the old garage and other capital works can be deducted right away.

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How you treat these expenses and depreciable assets is covered in the granny flats case study of our Microsoft Excel Training Course. Visit our website for more information on our full suite of training courses.

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EzyLearn online training courses count towards CPD points

EzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants. We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.

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Use Excel to Manage ALL Your Investments

Once You Master Excel You Can Do Anything!

using excel for financial forecast granny flat2
Excel is one powerful tool. Its formulas can be extrapolated to most any accounting software program.

In our Excel training Course there’s an exercise workbook on granny flat investments, which takes you through all the steps involved in developing a financial forecast for a granny flat. It can also be used to determine the financial forecast of any investment, not just granny flats.

Even though lots of cloud-based software applications have come along in recent years — Xero and MYOB and CRMs like Zoho — which have made it possible for lots of business owners to keep track of their financials and customer sales history without ever needing to open an Excel spreadsheet, Microsoft Excel is still the software used by accountants and analysts in nearly every profession.

Excel is flexible

Microsoft Excel may be difficult to master — indeed, it’s probably one of the most difficult in the entire suite of Microsoft programs — but it’s also the most flexible. The formulas sitting behind nearly every cloud-based accounting software can all be replicated and modified in Excel, where in MYOB or Xero, they can’t.

You can’t enter the details of your granny flat project or other investment into Xero and MYOB and create a financial forecast, even though near similar formulas are being used each time you run a profit and loss statement.

Cloud software is Excel plus PLUS

Before computers and Microsoft Excel came along, accountants used a pen and paper to keep track of their clients’ business financials. And before that, before the numeral system was invented, the abacus was the main accounting tool used by merchants and traders to keep track of their finances.

You probably have no use for an abacus anymore — although in some parts of Eastern Europe and Southeast Asia people still do — because, as an accounting tool, it’s too basic. But the same cannot be said about Excel, which is capable of handling complex formulas and rendering an answer.

Export accounting data into Excel

Because cloud-accounting software is essentially a very user friendly version of an elaborate, however inflexible, spreadsheet, it means you’re able to export your accounting data into Excel. Financial analysts and accountants do this when they need to carry out further analysis on a client’s financial data, and you can too.

Once you know how to use Excel for financial forecasting, you can use the same formulas and modelling for any financial forecast — be it for a granny flat project, business investment, anything that requires you to make a financial decision.

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Visit our website for more information on our Microsoft Excel Training Course, with its new intermediate-level ‘Granny Flat Case Study’.

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online bookkeeping courses to earn cpd pointsEzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants. We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.

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Use DropBox to Store Your Tax Records Digitally

In a previous post I suggested it’s a good idea to create a digital filing system for your business receipts and tax records. Storing tax records digitally is not just a space saver — it’s also an efficient way to share information with your accountant and bookkeeper, especially if you’re working with a remote bookkeeper, as it’ll speed up the process.

Our Xero Bank Reconciliations and Journal Entries Course will also show you how to record these transactions in Xero. 

Continue reading Use DropBox to Store Your Tax Records Digitally
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When Building a Granny Flat, Here’s What You Need to Consider

Excel Can Help You with Financial Forecasting

using excel for financial forecast granny flat
Excel is a great tool if planning a big ticket project like developing a granny flat on a property.

If you have the room, building a granny flat on your property can prove to be very lucrative. EzyLearn has recently created a new Microsoft Excel exercise, using the construction of a granny flat as a case study, as part of our Excel Training Course. It was created to help students understand how to use Excel for financial forecasting, but it’s also useful to those interested in constructing a granny flat on their property.

The first thing to consider is whether it’s viable to borrow money to fund your entire granny flat project. Most people add a granny flat to their property to earn an additional income by renting it out. If this is your intention, then you need to determine whether the granny flat will become a positive cash flow investment or a negative one.

The existing property

To begin, you must determine the value of the dwelling or existing property on the land you own. Is it brand new, relatively new, older style, or very old? You should have a quantity surveyor determine the value of the existing dwelling, to determine how much of the entire property’s value — that is, the house and land — is based on land value. In most cases, land value will far exceed the value of the dwelling, however many people are surprised to learn by how much, especially if the dwelling isn’t very old. Once you know the value of the dwelling, you may be able to claim depreciation as a tax deduction.

Development costs

You should now start to factor in the development costs associated with the project. This includes the cost of demolishing any existing structures — a garage or shed, for example — and remediation of the site in the event asbestos is present. You should also have a fairly good idea of what it will cost to construct the granny flat up to the stage where you can move in. Not all granny flat construction companies take you up to this stage, often exiting at lock-up stage instead. Don’t forget to include any council fees or levies associated with constructing your granny flat.

Expected income

In the Microsoft Excel case study, both the existing dwelling and the new granny flat will be rented out as investment properties. However, you may not do the same. You need to determine how much rental income you can reasonably expect to earn from your granny flat. You should also determine whether you’re located in a region with low rental vacancy rates and high demand for long term rentals. This will determine not just the net weekly income you can expect to receive, but also the frequency at which it will be occupied, which will also factor into your bottom line.

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Considering each of these areas is just the first step in developing a comprehensive financial forecast of your granny flat project. Our Microsoft Excel Training Course, with its new granny flats case study, goes into much greater detail. Bookkeepers can also keep up their certification and earn CPD points with our Excel, MYOB and Xero courses. Visit our website for more information on our full suite of training courses. 

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How and What Kind of Receipts Do You Need to Keep?

Xero course online receipt keeping

Online Receipt Keeping is the Way to Go

A HUGE PART of reconciling your bank account involves coding business expenses or purchases. You then need to keep a record of those expenses in the event you’re ever audited.

Our Xero Bank Reconciliations and Journal Entries Course covers how to code an expense or purchase in Xero, and it’s important to also store your receipts and get them to your bookkeeper if they’re working remotely.

Many people have used Dropbox to capture images of receipts but there are even better ways. Continue reading How and What Kind of Receipts Do You Need to Keep?

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Performing Weekly Reconciliations in Xero

Why it Pays to do Regular Bank Reconciliations

bank reconciliations weekly
Doing regular weekly bank reconciliations will help avoid confusion or errors later on.

In our Xero Bank Reconciliations and Journal Entries Course, you’ll learn how to carry out each step in the reconciliation process, in particular how to set up bank feeds. Bank feeds are an important function that allows transactions on your linked bank account or credit card to automatically show up in Xero, so you (or your bookkeeper) don’t have to spend time entering the details from scratch.

Both contract bookkeepers working from home or employees working remotely or in the office can log in and perform bank recs using bank feed data. Continue reading Performing Weekly Reconciliations in Xero

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How Bank Feeds Save Time and Money

Making Light Work out of Bank Reconciliations

Xero bank feeds
Incorporating Xero bank feeds will save you time, money and stress.

Cloud accounting software’s greatest innovation was not putting the software in the cloud; it was introducing bank feeds. You’ll learn how to set up bank feeds in the latest version of Xero in our Xero Bank Reconciliations and Journal Entries course. For now however, we’re going to explain why you should — whether you’re a business owner doing your own bookkeeping or whether you’re a bookkeeper employed to do it for your clients — be using bank feeds.

Bank feeds in brief

A bank feed is an automatically created list of the transactions (spent and received) in your bank account that is imported into your Xero accounting software. For this to occur, you have to give Xero permission to access your account. Some people feel funny about this, but bank feeds have been around for so long now that, just like online shopping, there’s really nothing to worry about. I won’t go into how the technology works, but I will say that no one looks at your account data; you’re just allowing the free flow of information between your bank and Xero.

Direct bank feeds save time (and indirectly, money)

There was a time when you or your bookkeeper had to wait until your bank statement arrived before any transactions could be reconciled in your accounting software, usually at the end of the month. For businesses with a lot of transactions, either in the form of receivables or payables or both, reconciling a month’s worth is a finicky job that’s prone to errors.

With bank feeds, transactions will show up in your accounting software as soon as the payment leaves your account or credit card. If you (or your bookkeeper) get in the habit of reconciling your account on a daily, twice weekly or weekly basis, it makes it easier to accurately code each transaction because you’re only dealing with a few at a time. This results in fewer errors and fewer hours spent fixing them, and that saves money (read: time = money).

The Xero online courses we offer

Xero online training course bank feedsBank feeds are an important aspect of reconciling your (or your client’s) accounts. Our Xero Bank Reconciliations and Journal Entries Course covers setting up bank feeds, plus much much more. Alternatively, to take it back a step, you can learn about invoicing, credits and reporting in our Xero Day-to-Day Transactions Course.

Using an old version of Xero?

You might like to read this prior post we wrote explaining how you can add bank links on an older version of Xero or enrol for our Xero courses here.

 

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Announcement: Xero Bank Recs and Journal Entries

Bank Recs are a pain in the !@Accounts#$

Bank Statement for Bank Reconciliation Courses in MYOB, Quickbooks and XeroAlthough the daily data entry is a frustration for many business owners and manager, particularly if you are quoting, ordering and invoicing regularly, the bank reconciliation is the most frustrating for bookkeepers, BAS agents and accountants because they need to make sense of EVERY transaction and make sure it is accounted for correctly. Xero bank reconciliations are made easier with bank feeds and today we announce that this course is available as part of our All Xero Courses for 1 Price Offer!

Bank Statements Reveal Much

We base our bank reconciliation course development (for Xero and Quickbooks) on our MYOB Bank Reconciliation Course and I was reviewing the contents of this course a couple weeks ago.

The thought that stuck in my head the most was “Wouldn’t it be great to design my own bank statement! A bank statement that I would like to see for my business each month” but that is a topic for another “business development and goal setting type blog”.

The important thing for bookkeeping students is that this bank statement includes most of the transactions that you’ll come across each month including interest, capital purchases, loans etc that you’ll probably need to check and make sure they’re coded correctly.

Xero and all cloud accounting programs make bank reconciliation easier because they enable you to import bank feeds directly from your bank. This saves a lot of the typing involved in data entry but you still have to get the codes right.

Xero 513 Bank Reconciliation Course

Learn more about what is included in this course at our Xero Bank Reconciliation Course landing page. In this course we introduce a new “character” in our course design – Jerry. Jerry is an ordinary man who decides to go into business because he loves talking to and helping other people but he’s not that tech savvy (or accounting savvy) so he makes a lot of the mistakes that many other business people make when they are starting out for the first time.

If you are an existing student enrolled into our Xero Courses, just contact support and ask them to enrol you into the Xero 513 (Bank Recs) course – there’s not charge for you if you are within the 12 months course access period.

Stay tuned for more updates to our Xero and Quickbooks Training Courses.