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Invoice Late and Say Goodbye to 7 Days

Get paid in Nett 7 days with Xero and Quickbooks Accounting Software Training Courses

Not invoicing quickly sends a message to your clients

Get paid in Nett 7 days with Xero and Quickbooks Accounting Software Training CoursesI MENTIONED IN A previous post about why you should quote and invoice customers on the spot if you can.

You’re more likely to get the job or get paid on the spot or pretty soon after if you do and it helps you

  • prioritise your work schedule (ideally using something like Calendar in Google’s G Suite)
  • keeps your cash flow healthy, which is important if you’re a tradie who goes out purchasing materials before you start a job
  • Sends a message that you are efficient and would like to be paid promptly

If you don’t invoice quickly your clients could forget what the invoice was for, call and ask questions about it because it’s no longer fresh in their mind and even put it off “Until the next payment cycle”, which is sometimes just an excuse for “some time in the future”.

Late invoicing is a pain for clients

During a recent renovation in Newcastle, I encountered a handyman named Paul. I asked him at least three times to invoice for the work he’d done before he finally sent one through.

When the invoice did come through it was in Microsoft Word format so I understand why it took so long — he would have been better using Xero or QuickBooks Apps on his phone!  On top of this, he then said to me, “Can you please pay me quickly because I’ve run out of money!”

I chased him for an invoice so I could pay him quickly, after all, I believe that if you charge a competitive price and do a good job for professional services that you should be paid quickly.

I prefer to pay quickly because I don’t have the debt over my head and I want people to work for me in the future — it’s a form of goodwill from a customers perspective but not all customers are like that.  Some customers see you as just another “Creditor” and are accustomed to string their Creditors out as long as possible.

Chasing someone for payment or an invoice or even a quote takes time and management — you have to note it in your diary, calendar, todo list or a report from your software program, and it starts to bring in feelings of resentment, particularly if they’re not feeling the best one day. Make it easy for customers to pay you and get your invoices out quickly.

Don’t invoice using Microsoft Word

When Paul finally sent me his invoice as a Word document there were a few problems I recognised:

  • First, it takes a long time to update a Word template, and it’s easy to make mistakes — leave the customer name, invoice number, date or other details unchanged, for example, which messes with your bookkeeping come tax time.
  • It’s easy to accidentally delete or change details in a Word document. It’s even easier to delete or change details in a Word document on purpose.
  • Paul had to get onto his computer to create the invoice
  • He doesn’t have a system of keeping track of who owes him money
  • It’s more complicated to make a note of and keep track of which Word Document (um, I mean “Invoice” has been paid)
  • Most people recognise a Word document and don’t think you’re very organised.

You definitely shouldn’t send invoices or estimates to customers in an “editable” Word document. It becomes a game of “he said, she said” if something goes awry, and that just further impedes a quick payment from your customer.

Don’t invoice late, then ask for prompt payment

When Paul followed up with a call asking me to pay the invoice promptly (and after I asked him no fewer than three times to send it in the first place), I paid it promptly because I happened to be available and organise payment.

However, the practice of doing this causes so many negative effects that it’s something every business owner should avoid. Here are some problems with asking for prompt payment after sending a late invoice:

  • If the first call you’re making to a client or customer after working with them is to ask them to pay you quickly, your business processes are wrong. Your first call, after working with a customer, should be a customer service call not a credit management one.
  • It builds resentment in the customers mind because they haven’t done anything wrong.
  • It makes you look desperate and, even if you are, it’s not your customers concern.
  • It stays in your customers mind for the next time they want to use you or someone else who offers a similar service.

Get set up on Xero and start being more professional immediately

in person and one on one training online learning course videosUse cloud-accounting software like Xero or QuickBooks so you can quote and invoice on the go quickly, securely and easily. For help setting up QuickBooks or Xero for your business, visit our website to learn more about our Xero or QuickBooks training courses.

 

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Profitable Businesses Suffer Poor Cashflow

Xero Advanced Certificate Training Course cashflow-forecast-charts-reporting-budgets

Xero Course cashflow-forecast-charts-reporting-budgetsI’VE TALKED ABOUT CASHFLOW on this blog before, particularly as it relates to good credit management processes.

This time, however, we’re going to look at how profit differs from cashflow, even though the two are intimately related.

There is the perception that a profitable business can’t suffer from poor cashflow, but this is incorrect. There are plenty of profitable businesses that don’t have enough money in the bank at a given time to pay their outgoings because cashflow is lumpy.

We’re in business to make a profit, and yet the term ‘profit’ is really just an accounting concept. Profit is revenue minus expenses, but it doesn’t reflect our investment in capital assets, such as equipment or vehicles, nor does it take into account the liabilities we have funding our business (loans and hire purchases).

Cashflow is the true indicator of success

Cashflow, unlike profit, is about timing. Specifically, it’s about having money before you have to pay out money, something not identified by profit. Managing cash flow is one of the most stressful things about running a business, because many variables affect it.

Sure, not earning enough money or not having processes in place to make sure that money flows into your business in a timely fashion are part of it, but there are other factors too, such as:

  • Incorrectly priced products or services
  • High overheads
  • Holding too much stock
  • Large bills (tax bills)
  • Seasonal cycles
  • Large projects
  • Growing pains (putting on more staff, increasing stock levels)
  • Unrealistic forecasts.

P&L reports help determine causes of poor cashflow

Quite a few of the things that adversely affect a business’s cashflow can be determined by running regular Running Multi-Period Profit and Loss Statements], while others can be managed (or avoided) by implementing better processes or procedures for doing business.

Product based business which keep inventory can have their cashflow affected by:

  • incorrectly priced products and services
  • holding too much stock
  • seasonal sales cycles

and this evidence will show up when you run your P&L reports, as well as your inventory sales and stock-on-hand reports. If, for example, you identify that May, June and July is your busiest quarter, while November, December and January is your quietest, and where you struggle to meet your outgoings, you should implement strategies to better plan for that leaner period.

A seasonal period of downturn is common among most businesses. It’s how you manage and plan for that downturn that separates successful businesses from ones that aren’t. For example, it’s unwise for a sole trader to take a holiday March, a seasonally busy period for his business, when he could wait until June when it’s much quieter.  

Your bookkeeper will play a key role in how you plan and manage your cashflow. Ask them to run reports that will help you to identify any inefficiencies in your business that’s causing poor cashflow, and implement strategies to better manage it.

Bookkeeper, BAS Agent or Finance Manager

start a bookkeeping business & find a good bookkeeperIf you’re looking for a reliable bookkeeper to manage your daily or weekly bookkeeping and accounts, either remotely or in-person, Tracey from Rockingham is a highly qualified bookkeeper, who also has the practical experience of having operated her own business in the past. Tracey has a lot of experience in the day-to-day accounting functions of a small business and you can contact her directly as a fully licensed member from her profile page.

Our National Bookkeeping website has recently gone through a significant upgrade so watch out for more stories about featured bookkeepers in forthcoming blogs! Join and we can feature YOU in our articles too. Subscribe and stay tuned to learn about some new members who have moved from the corporate world to focus as Finance Managers for small to medium businesses. 

Learn How to use Xero EzyLearn Online CoursesXero for LIVE data and Accurate Reports

Xero enables business owners and their bookkeepers and financial managers to see what is going on RIGHT NOW and because it’s popularity is growing we’ve created a NEW Xero course which goes through a great example of the business decisions that a business owner makes about buying an investment property, figuring out which products/services provide a better Return On Investment (ROI) and more.

Check it out at Xero Cashflow Course and remember that existing EzyLearn students can get access to this course by just sending an email request to student support.

 

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How to Tell You’re Setting Your Prices Too Low

How to set prices in business

how to set prices in business
Don’t shoot yourself in the foot by pricing too low and only winning jobs that you make very little on!

AS ALL SMALL BUSINESS owners know, setting the right prices is a difficult task. And a lot of newbie business owners think that being cheap is the better than meeting the market, but that’s not always the case.

Take, for example, a tradesperson I met recently. This tradesman is a painter and he’d been in business for a while before he realised his prices were set too low, and despite all the business he was getting as a result, it was actually costing him money. (We cover more detailed, real-life case studies like this in our micro courses.) 

He shared with me the tell-tale signs that your prices are too low.

Lots of small, one-off jobs

Small jobs are important because they keep the home fires burning, so to speak. But you need a good balance of small jobs and bigger projects, with the small jobs being completed around or in the middle of the larger ones.

If you’re only getting lots of small, one-off jobs that you spend more time to travelling to than it takes to complete the work, this is a good indication that your prices are too low. For jobs like these, either charge for travel time or a call-out fee.

For small jobs … charge for travel time or a call-out fee.

You’re too busy to plan ahead

If you find that, in order to make ends meat, you need to keep yourself so busy that you don’t have time to plan your working week, then your prices are too low. You should be able to plan out your weeks so customers know when to expect you, and so you can be as productive and efficient as possible — if you have two jobs in the same area, for instance, planning ahead will allow you to go to those jobs on the same day.

Use a tool like Google Calendar from G Suite to organise your days, and keep in touch with customers along the way so they know to expect you.

You can’t afford to pay for help

Setting your prices lower than your competitors may be one way to win jobs, but the downside is that you’re constrained to completing the work entirely yourself. The tradesman, a painter, whom I was speaking with, told me about a time he couldn’t afford to find another painter to help prepare walls or pitch in with the painting because his prices were too low.

If you’re not able to pass jobs onto other businesses in your industry — subcontracting — and still clip the ticket, or you’re not able to afford to use a portion of the money you’d earn to hire someone to complete part of the job, you’re charging too little.

You’re too busy to invoice promptly

Just as it’s important to plan your work weeks in advance, it’s equally important that you invoice customers for the work you’ve completed in a timely manner. If you find that you often don’t have the time to invoice customers until a week or a month has passed, there’s a deficiency in your business processes. Use accounting software like Xero so you can invoice on the go.

***

We cover setting prices the market — and your business — will bear in our EzyStartup Course. Visit our website for more information and to enrol.

Check out our Spring Specials!

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We have a host of online training course specials for the spring season — take a look!

 

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Different Ways to Find Work as a Bookkeeper

How can you earn money from bookkeeping?

different ways to find work as a bookkeeper online myob xero excel quickbooks training
It isn’t essential to become a registered BAS agent in order to find regular work as a bookkeeper.

BAS AGENTS PERFORM MANY of the same tasks as a basic bookkeeper, which includes entering receipts, coding financial transactions and generating invoices, but there is just one key difference: registered BAS agents are allowed to prepare and lodge activity statements on behalf of their clients.

In order to become a registered BAS agent, you must have completed, at a minimum, a Certificate IV Financial Services in either bookkeeping or accounting through an accredited and nationally recognised training provider.

Most people don’t have much trouble completing the Certificate IV, but the requirements set out by the Tax Practitioner’s Board (TPB) that often present a barrier to becoming a registered BAS agent. See the list of blogs below for more information about becoming a registered BAS agent.

Tax Practitioner’s Board BAS agent requirements

In addition to completing a Cert IV, in order to become a registered BAS agent the TPB also requires you to have at least 1,400 hours of work experience. This work must be done under the supervision of a registered BAS agent or accountant in the past 4 years (it’s 1,000 hours if you’re a member of a professional association).

You also need to have completed a board-approved course in basic GST/BAS taxation principles (this course may be included in your primary education). There are also mandatory continuing professional development (CPD) requirements that each BAS agent must keep up with in order to remain registered.

There’s a lot to do, but becoming a registered BAS agent isn’t the only way to carve out a successful career for yourself. Depending on how you want to work, there are plenty of other options you may also consider, such as:

Work for other bookkeeping businesses

If you work as an employee of a bookkeeping business, you can perform all the same tasks and duties as a registered BAS agent can, as you’ll be covered by their BAS registration and oversight.

As long as you are on the bookkeeping business’s payroll, you can provide BAS services — that means, you can also work as a casual or temporary worker providing you don’t invoice for your work using an ABN, but instead use your tax file number. This may also have other benefits, too, as the business will be required to withhold tax and contribute to your superannuation.

Work directly for a business as a wage earner

Again, as long as you’re on the business’s payroll, you don’t have to be a registered BAS agent to provide BAS services. The only difference here is that, while you can prepare the business’s activity statements, you won’t be able to lodge them. They will need to have their accountant do that last step, instead.

You can still work under a similar arrangement as mentioned above, either as a part-time, casual or temporary staff member, and, so long as you’re drawing a wage from the business, you can perform BAS services.

Carry out basic bookkeeping from home on the side

You may even choose to provide basic bookkeeping services to small businesses remotely from your home office, and still invoice them using your ABN. Many bookkeepers work as virtual assistants and some work a combination of casual and part-time hours for bookkeeping or accountancy practices, or as an employee of a business, and supplement their income with some basic bookkeeping work on the side, which offers both flexibility and stability at the same time.

***

Thinking of expanding your bookkeeping skills? Considering becoming a BAS agent? Check out just some of the blogs we’ve featured on BAS agents:

Want more advice and information? Subscribe to our blog.

learn online training Xero courses videos for less

Our Xero online training courses include EVERYTHING for ONE LOW PRICE. Furthermore, if you select our Lifetime Membership option, you’ll have LIFETIME access to our ongoing course updates. All EzyLearn courses are accredited by the Institute of Certified Bookkeepers (ICB) and can be counted towards Continuing Professional Development (CPD) points. Find out more about our Xero online training courses. 

 

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Don’t Wing It With Customer Service – Plan It

Great customer service doesn’t just happen.

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If you’re unsure about what makes up the kind of customer service people rave about, then perhaps you should look into our EzyStartUp Course.

HOW TO PROVIDE REALLY exceptional customer service is just one of the modules covered in our EzyStartUp Course which teaches you all about how to start up your own business.

We handpicked this inclusion as our experience is that, time and time again, good, nay excellent customer service goes a long way to ensuring a business has longevity. Continue reading Don’t Wing It With Customer Service – Plan It

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When Do You Need to Register as a BAS Agent?

MYOB and Xero Training Courses and becoming a registered BAS agent to start a bookkeeping business

Making the effort to specialise reaps rewards

BECOMING A REGISTERED BAS agent means you are permitted to lodge a client’s business activity statements (BAS) on their behalf, each month or quarter, or as determined by the ATO.

BAS agents are really bookkeepers; but they’re ones who have done some extra training and applied to the Tax Practitioner’s Board (TPB) for a BAS agent’s accreditation.

Not every bookkeeper has to register as a BAS agent, but those who do typically earn more as a registered BAS agent than a straightforward, no-frills bookkeeper does. That’s largely due to the way cloud-based software, like Xero and Quickbooks, has made it a lot easier for businesses to manage their own bookkeeping. But even just speaking generally, bookkeepers who have specialised skills always tend to earn more.

So when don’t you need to register?

Continue reading When Do You Need to Register as a BAS Agent?
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What Do Bookkeepers and Builders Have in Common?

How to see if your bookkeeper is competitive

learn xero online training course videos shopping around for bookkeeping quote
Shopping around for bookkeeping quotes in order to ascertain exactly what tasks your bookkeeper will do is perfectly reasonable – and a great way to develop your PSA.

FINDING THE RIGHT BOOKKEEPER for your business isn’t always easy, especially when there are different types of bookkeepers who each provide different services. That’s in addition to all the different certified consultants and advisors around. We’ve found that one of the best ways to ensure you’re hiring the right bookkeeper is to simply ask them for a quote.

Getting a bookkeeping quote

When it comes to getting a quote you can compare a bookkeeper to a builder. Just as you would get a quote from at least a couple of builders before hiring one of them to work for you, it’s a good idea to get a couple of different quotes from different bookkeepers. This helps you compare apples with apples.

But more than this: a bookkeeping quote should detail precisely what tasks the bookkeeper will carry out, the frequency at which they’ll be done, and any other hidden costs you may be up for, such as the cost to migrate your data from one accounting application to another.

Your professional services agreement

Getting a quote will also help form your professional services agreement. Simply obtain the required number of quotes and decide which bookkeeper you’ll hire for your business; then make sure that quote is turned into a professional services agreement (PSA).

A PSA is the written contract between you and your bookkeeper, outlining the tasks they’ll carry out and when, any other fees and charges, when you’ll pay them and how, plus any additional obligations on their part and yours. A professional services agreement is a safeguard for both you and the bookkeeper. It’s also another way to help ensure the bookkeeper will be the right fit for your business.

***

Need to brush up on MYOB or Xero?

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Our Xero online training courses include EVERYTHING for ONE LOW PRICE. Furthermore, if you select our Lifetime Membership option, you’ll have LIFETIME access to our ongoing course updates. All EzyLearn courses are accredited by the Institute of Certified Bookkeepers (ICB) and can be counted towards Continuing Professional Development (CPD) points. Find out more about our Xero online training courses. 

 

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Should Your Bookkeeper Earn a Commission Off Your Software Subscription?

Is your bookkeeper’s bias disadvantaging you?

how to find a good local bookkeeper learn myob xero online accounting training course
Although a bookkeeper who is certified by a major accounting software company can be a good thing, you need to make sure their accounting package is best for your business.

SOME BOOKKEEPERS HAVE BEEN endorsed by software companies and are known as certified consultants or advisors. At EzyLearn we provide online training in Xero, MYOB and QuickBooks and we know that some people who hire bookkeepers aren’t aware of the benefits these certified consultants and advisors receive.

So what are some of the benefits? One; they get their accounting software for free, two; they receive a discount or commission for each new business they sign up to use that particular software.

Does this make certified consultants and advisors biased?

For a business owner, the upside to hiring a bookkeeper endorsed by a software company is that they will be able to work with that software application quickly and efficiently. The potential downside, however, is that the software application may not be especially suited to the business, but has been recommended anyway because the bookkeeper earns a commission for doing so.

Research first

A way around this is to do some research first. Compare a few different accounting applications before making contact with a certified consultant or advisor. Once you’ve decided on a particular software, you shouldn’t find yourself in any strife.

If, however, you contact a bookkeeper without doing your own research first, there are some things to be wary of, such as whose name the subscription will be in — failing to do so could prove to be a costly mistake.

Independent bookkeepers bring software skills and more

Most independent bookkeepers are usually proficient in a few of the major accounting applications, like Xero, MYOB and Quickbooks, rather than just one, so they’ll be able to recommend the software that suits you and your business needs the best.

They’re also able to set up your accounting software for you and provide training if necessary, just as a certified consultant or advisor can — only you’ll be in control of your subscription instead of your bookkeeper.

To ensure your independent bookkeeper is just as qualified as a certified consultant or advisor, ask to check their references. By law, a bookkeeper can’t perform BAS or tax services unless they’re registered with the Tax Practitioner’s Board (TPB) so you can check with them to ensure they are. If you’re worried about their software skills, ask if they’ve taken any short courses in a particular accounting application.

We want to help you get the best from your bookkeeper. Check out our recently upgraded National Bookkeeping directory which features bookkeepers from all over Australia. Or perhaps you’re after software training in MYOB, Xero and QuickBooks? We feature online training in these, and many other business-related courses: see our website for more. 

learn online training Xero courses videos for less

Our Xero online training courses include EVERYTHING for ONE LOW PRICE. Furthermore, if you select our Lifetime Membership option, you’ll have LIFETIME access to our ongoing course updates. All EzyLearn courses are accredited by the Institute of Certified Bookkeepers (ICB) and can be counted towards Continuing Professional Development (CPD) points. Find out more about our Xero online training courses. 

 

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Who Do You Trust More: Real Estate Agents or Tradies?

Still unsure whether you can trust online ratings and reviews?

trusting online reviews and ratings for tradesperson real estate agent online ratings and reviews
After a tradesperson? Sometimes asking a business person from a related business, such as a real estate agent, can be a good source for a recommendation.

IT CAN BE HARD to know whether you can really trust online ratings and reviews, whether these reviews and ratings are objective and even relevant and how they compare to recommendations and testimonials. By recommendations we mean word of mouth referrals from your friends and family and so forth, and testimonials that have been written by real people — with real names and real locations!

In our recent post about recommendations we suggested that you ask a friend, relative or colleague if they’ve ever had experience with a business you’re thinking of using — chances are, if your friends live locally they may well have; or if the business is a chain or franchise operating over a wide area.

Also ask other businesses

When seeking a professional recommendation you can also ask other businesses. Find out what their experiences have been, if any. Often businesses will have a relationship with each other even if it is not, at first, apparent.

For instance, a symbiotic relationship tends to exist between real estate agents and tradespeople. Agents will regularly draw up a list of preferred tradespeople that they work with and recommend to their tenants, landlords and vendors.

And there are plenty of tradespeople who do the same for real estate agents that they’ve had professional dealings with. There are plenty of other examples of these sorts of professional recommendations.

Beware professional bias

Of course, just as you should be wary of overly positive or negative ratings and reviews online, you should be likewise when soliciting professional reviews. If one business regularly referred work by another, even if they don’t think they’re a great business to deal with, neither party will necessarily say anything bad about each other.

In the end, when looking for a tradesperson, real estate agent or some other professional service, be sure to do all your research. Ask around for personal referrals, check them up online, and get in touch with each business directly to see which one is the best fit for you.

Real people, real locations

At EzyLearn we provide testimonials from our students, which include their full name and location, and why they chose EzyLearn to study in the first place. We also offer a money-back guarantee and free samples of our course content, so students know they can trust they’re making the right choice. Visit our website for more information and to see our wide range of courses.

Xero online training course

At EzyLearn we offer online training courses to help you up-skill and find employment. Choose from our range of cloud-based online accounting software courses, to business start up and management courses, to marketing and sales courses, or update and further your skills in a range of Microsoft Office programs (Excel, PowerPoint, Word) or social media and WordPress web design). 

 

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Could Your CURRENT Bookkeeper be Jinxing their Replacement?

find a good local bookkeeper myob xero excel online

How easily could you replace your bookkeeper?

WHETHER YOU USE A contract or remote bookkeeper, it’s crucial that they keep your bookkeeping in good order. If you ever have to replace them, you don’t want to be redoing your entire bookkeeping system.

So what are some ways that bookkeepers can work, and what can they include in their bookkeeping, that makes it easier for someone new to pick up the reigns? Let’s take a look:

Continue reading Could Your CURRENT Bookkeeper be Jinxing their Replacement?
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Should You Buy Commercial Property Outright or Get a Mortgage?

The power of using Excel and Xero combined

Excel and Xero combined importing_comp
Our courses cover how to import from Excel into Xero and visa versa, for purposes such as working out depreciation on a business premises.

THERE ARE MANY UPSIDES to buying a commercial property for your business and if you’re able to buy an industrial unit like a Cubbyhole, it can also be a lot cheaper than renting premises.

Buying outright

If you’re in the financial position to buy your business premises outright, it may seem like a no-brainer to do this instead of getting a mortgage. However, there are some things you need to consider:

  • You’ll lose liquidity on the assets in your property, which means you won’t be able to tap into any equity in the property, unless you take out an equity loan against the property.
  • You’re tying all your cash to one asset class, which may limit your ability to make other investments and prevent your business from expanding. This could run counter to your reasons for making the property purchase in the first place.

Getting a mortgage

When you get a mortgage, you have the benefit of being able to access equity in the property, which will enable to invest elsewhere. Of course, there are still factors to keep in mind:

  • You’re spreading the payments over many years, which ties you to paying down that asset for the foreseeable future.
  • You’re paying interest, which although it’s a tax deduction, will significantly inflate the price of the property.

Work out the best way in Excel

Using the data from your Xero accounting software package, Microsoft Excel can help you determine whether your business will be financially better off buying its premises outright or getting a mortgage.

You can also create a financial forecast in Excel. Using Excel, you can calculate the depreciation amounts, which can then be entered into Xero. We cover how to deal with aspects like depreciation in our Xero Bank Reconciliation Course, because many businesses own, or will own, a capital asset at some point.

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Check out our new Cash Flow Reporting, Budgets and ROI Course for Xero which shows you how to deal with an asset purchase like a business premises in Xero. Remember, you get access to ALL our Xero courses for ONE LOW COST. Visit our website for more information on our suite of online training courses or enrol today!

learn to use excel online training course videos cheap best

Importing from Xero to Excel and back again is included as part of our Advanced Microsoft Excel training courses — and you receive access to ALL OF OUR COURSES, including ALL skill levels for ONE LOW PRICE. You can even start your Excel journey with our FREE Beginners’ Excel Course Workbook. Read more about our beginners’, intermediate and advanced Excel training courses on our website, or enrol to start learning by 5pm tomorrow!

 

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Cash Flow Reporting in Xero

Show me the money!

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Creating a cash flow report in Xero will tell you more about the financial state of your business than profit and loss statements.

IN OUR BRAND NEW Cash Flow, Budgets and ROI Xero Training Course, you’ll learn how to generate a cash flow report for your business.

Cash flow reports show the money going in and out of the business, so they’re better indicators of a business’s overall financial health than a Profit and Loss statement (P&L).

A cash flow report enables you to make forecasts and budgets for your business based on previous trends — recurring expenses, average time to get paid, seasonal quiet periods, and so forth.

The 3 cash flow categories

Cash flow reports are typically broken up into three categories:

  1. Operating activities: cash flowing in and out of the business from revenue-generating activities
  2. Investing activities: cash flowing in and out of the business from the acquisition and sale of long-term assets
  3. Financing activities: cash flowing in and out of the business from borrowings and changes in equity.

Items in a cash flow report

In our Cash Flow, Budgets and ROI Xero Training Course, you’ll learn how to generate a cash flow report in Xero. That report will show every transaction that’s run in and out of your business, divided among one of the three categories.

In the operating activities category, you’ll typically find things like costs associated with any training courses or seminars, advertising and marketing expenses, income or commissions from your business, subscriptions to any magazines or periodicals, etc.

Under the investing activities category, you’ll find the cost of purchasing office or warehouse space and the capitalised borrowing cost, for example.

The financing activities category will show the loan you’ve taken out to purchase your business’s office or warehouse space.

You’ll learn how to generate and work with cash flow reports in our new Cash Flow Reporting, Budgets and ROI Training Course. ENROL now or read more about the benefits of cash flow reporting to your business. Are you a sole trader or contractor needing to record your ongoing expenses? We cover that too!

cashflow reports in xero and excel

Our Xero online training courses include EVERYTHING for ONE LOW PRICE. Furthermore, if you select our Lifetime Membership option, you’ll have LIFETIME access to our ongoing course updates. All EzyLearn courses are accredited by the Institute of Certified Bookkeepers (ICB) and can be counted towards Continuing Professional Development (CPD) points. Find out more about our Xero online training courses. Or learn more about our entire suite of online software training packages and social media training packages.

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Importing Bank Statements into Xero

Making bookkeeping easier, faster and more accurate

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You’d be surprised how many business owners don’t even know how to import their bank statements into their accounting software. Are you one of them?

WE HAVE CREATED A brand new Cash Flow Reporting, Budgets and ROI Course for Xero and one of the things you’ll learn is how to import your bank statements into Xero.

The sales spiels of many of the notable online accounting software packages like QuickBooks, Wave Accounting, Outright, Kashoo, LessAccounting, Clearbooks and even Xero, claim that this feature will save you time and effort as it imports your bank transactions. The truth is, this is not foolproof and won’t work 100 percent of the time (even if it’s just a matter of not being able to get your software and your bank to “connect” just as your mobile phone connection inexplicably doesn’t work sometimes).

Therefore, always double check your bank transaction data has been imported accurately. This said, importing your bank statement into Xero (or whatever accounting software you use) is a really important step in the bookkeeping process that a lot of business owners forget or don’t know how to do. And the technology is only going to get better!

Using the correct format

To import your bank statement into Xero, you must ensure it’s in the correct format. Xero can only work with a CSV file of your bank statement. Depending on your bank, you might be able to download your bank statement as a CSV file from your internet banking, or you will have to create one from scratch.

Creating one from scratch isn’t too difficult. If your bank doesn’t give you the option of downloading a bank statement as a CSV file, you can create one yourself in Microsoft Excel.

You can download an Excel template from Xero. It includes the recommended fields and is already set up as a CSV file, so all you need to do is add in your data.

Set transaction rules

Once you’ve created and uploaded your bank statement to Xero, you’ll need to set up transaction rules for recurring expenses. You’ll learn how to do this in our Cash Flow Reporting, Budgets and ROI Xero Course.

Setting rules for recurring transactions helps speed up the reconciliation process, which depending on the type of business you operate and how often you reconcile your account, can be the most time-consuming part of the process.

Importing your bank statement and creating rules for transactions that occur each week, month fortnight, year, etc, greatly speeds up this process.

No CSV? Use bank feeds

If your business has lots of expenses every week, and your bank doesn’t let you download your bank statement in a CSV format, you may find that manually creating one in Excel each month is too time consuming.

Set up bank feeds instead. Bank feeds is the process of linking all of your business accounts, whether they’re credit cards or bank accounts, to your accounting software, so that each time you make an electronic purchase, it’s automatically imported into your accounting software.

This will allow you to reconcile your account each fortnight, week or more frequently, if you desire, than once a month when your bank statement comes in.

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Bank feeds save your business time and money. Find out more about setting up automatic bank feeds in Xero and importing bank statements into Xero. You can also read more about our new Cash Flow Reporting, Budgets and ROI Course for Xero, visit our website or enrol today!

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Learn Microsoft Excel from scratch or brush up your Excel skills, at your own pace, with our affordable Excel online training courses — where you get THE LOT (that’s 9 courses in total) for ONE LOW PRICE — everything included! Volume corporate discounts are available and our courses count towards CPD Points. NOW is the time to learn to use Excel, one of the most-used software applications in the world.

 

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Is a Certified Advisor or Certified Consultant Better Than a BAS Agent?

Finding the best bookkeeper for your business

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A bookkeeper who’s certified in a particular accounting software may not mean that much for your business. Better to have someone who is simply a good bookkeeper. Period.

IT’S NOT ALWAYS EASY to find a bookkeeper who suits your business’s needs. This can be further complicated by the fact that a lot of business owners don’t know too much about bookkeeping.

Now that virtual bookkeepers have become more common, lots of business owners have started selecting bookkeepers based on their affiliation with an accounting application. Such bookkeepers are often called a Certified Advisor (Xero), Pro Advisor (QuickBooks) or Certified Consultant (MYOB). But are they really the best bookkeeper for your business?

What are Certified Advisors, Consultants and Pro Advisors?

In a nutshell, a certified advisor, consultant or pro advisor is just an individual who has been endorsed by a software company because they’ve demonstrated a high level of knowledge and skill with a particular accounting product.

Hiring a bookkeeper who’s been endorsed by MYOB, say, means you shouldn’t have to worry about whether your bookkeeper has set up your accounting package correctly, or whether they’re using the correct codes. What it doesn’t guarantee, however, is that each consultant or advisor is a highly experienced BAS agent, as the certification relates to their software knowledge only.

Certified Advisors and Pro Advisors go through their certificate, which is often free, because it elevates their own profile. It can also demonstrate that they are committed to that software program more than others. The Xero Certification training (at the time of writing) has a strong focus on understanding how to use the Xero Agent portal to bring clients onto the platform – and not so much about learning bookkeeping or to become a BAS Agent.

If you don’t have an accountant or BAS Agent then you should make that your starting point as everyone needs someone who can perform tasks that relate to tax and GST who acts on your behalf. If you have that setup already you can hire someone who has good bookkeeping skills using MYOB or Xero but is cheaper because they are not registered or licensed. This junior bookkeeper can perform your office admin, accounts and even customer service while your Registered BAS Agent or Tax Accountant can sign off on your financial figures.

Find a highly qualified BAS or tax agent instead

Sure, a bookkeeper who’s experienced in your accounting package is important. It’ll help keep your bookkeeping bill down because they’re able to perform certain functions quickly, while your accountant shouldn’t need to fix any errors, either. But that’s only providing that they’re as knowledgeable in Australian tax as they are MYOB or Xero or QuickBooks.

Unfortunately, however, the two aren’t mutually exclusive. So instead of focussing on a bookkeeper’s software experience, it’s more beneficial to ensure they’re qualified BAS and tax agents, with either a Certificate IV in Bookkeeping or higher.

If you don’t get a bad reference from their current and former clients, then there’s a pretty good chance they’re proficient in the major accounting packages, and if they’re not, most bookkeepers will tell you upfront.

Get the accounting package that’s best for your business, not your bookkeeper

There are lots of reasons a bookkeeper would choose to become certified with a software company, the biggest being that they get their accounting software for free and receive a commission for each new client they sign up to use the accounting package they’ve been certified with.

However, when you hire an independent bookkeeper who’s well-versed in a few different accounting packages, you’re more likely to get better advice about which accounting package is best suited to you and your business’s needs, rather than the accounting package that will generate income for your bookkeeper.

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Are you looking to brush up your skills in cloud-accounting packages like XERO, MYOB or Quickbooks? We provide a range of online training courses in all of these packages at ONE LOW COST for ALL SKILLS LEVELS. Find out more.

find a local bookkeeper

We feature our own online directory of local bookkeepers looking to add to their customers. Visit National Bookkeeping to find a suitable and experienced person available to work in your area, or able to work anywhere in the cloud. Alternatively, if you are a bookkeeper looking to expand your client list or find contract work, you can register and become part of our network for free. 

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3 Things You MUST Do in Excel!

Business owners and job seekers take note!

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Excel isn’t just for budding bookkeepers; it’s a great tool for all business owners to know.

MICROSOFT EXCEL IS THE most widely used spreadsheet application in modern computing. That said, it’s also one of the more difficult programs of the Microsoft Office Suite to learn, which is why we recently updated the content of our Excel training courses.

A lot of people do our Excel training courses to help them “skill up” to find a job, find a position better suited to them, or develop their career path. However, Excel is a fantastic tool for small business owners as well.

But whether you use Excel to create a pivot table or a database, there are a few things you should do each time you open an Excel document. Here we present you with three:

1. Vertical align: always centre

Always align the text in the cells of your Excel spreadsheet to the centre, or the top in certain circumstances. But never, ever align it to the bottom. It’s hard on the eyes and, when you’re looking at lots and lots of data in lots and lots of cells, it becomes difficult to know which row, column, etc, you’re looking in. Centre alignment, always.

2. Build error-checking into formulas

There should never be an instance where one of your workbooks is showing a #DIV/0, #N/A, #REF, #NAME?, #NUM!, or #NULL! error. This is especially true if you’re sharing these workbooks with your business partners or accountant or whomever.

Seeing an error in a financial report may cause the reader to doubt the accuracy of the entire workbook, so ensure your workbooks remain error free by using the simple IFERROR() error-checking function in Excel.

3. Print preview your work

Again, if you intend to share workbooks with other people, you should always ensure that your Excel workbooks can be printed nicely and easily, even if you don’t intend to ever print the document yourself. This is easy enough to do via File > Print Preview and adjusting the print margins before sharing (or printing) the document.

However, judging by the number of times I’ve printed an Excel document only to collect 87 sheets of paper off my printer to read the contents one 4×4 table, the function is seldom used by anyone else but me!

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For more Excel formatting tips and tricks, download our FREE Beginners’ Guide to Excel, or enrol in our intermediate or advanced online Excel training courses to learn how to create databases, pivot tables, charts, graphs, and much more…

Read more about our beginners, intermediate and advanced Excel training courses on our website, or enrol to start learning by 5pm tomorrow!

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At EzyLearn, we’re committed to helping students of our MYOB, Xero and Quickbooks courses gain employment as a bookkeeper or even start their own bookkeeping business; it’s why we provide you with lifetime access to our online cloud-accounting training courses as part of our commitment to continuing professional development. 

 

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Cash Flow Forecasting for Sole Traders and Contractors

Great expense apps if you’re self employed

expense apps for self employed people
Are you busy and self-employed but can’t afford the higher price tag of some expense tracking apps? Don’t worry, there are cheaper options available.

AS WE’VE WRITTEN PREVIOUSLY, cash flow is one of the most accurate instruments for predicting your business’s financial health. It’s more accurate than profit and loss statements, which don’t take into account any cash outlays, and so don’t show a true picture of your business’s finances.

We have also checked out some of the latest cash flow forecasting apps that integrate with Xero and other accounting packages. These can be excellent tools for businesses that employ staff or are expanding rapidly, but there are still many business owners that don’t fit into that category, and although keeping an eye on their cash flow and forecasting trends remains critical to their financial health, they can’t justify the high price tag of an app like Spotlight or Float.

Expense and budgeting apps

What’s a cash flow app, if not a program that tracks your expenses and income and then tells you how much money you have left in the bank? That’s what FUTRLI and Spotlight, the apps we reviewed recently would do, and then also let you do other things, like create scenarios to determine the particular outcome of a business decision.

But there are other expense apps that sole traders and contractors can use for cash flow forecasting:

Pocketbook

Pocketbook, the Australian personal finances app recently acquired by ASX-listed ZipMoney, is free to use, although a recent deal with 1300HomeLoans means it may analyse your spending data to make commercial suggestions around your personal finances. (For the record, I have been testing it for months and hasn’t been subject to any such suggestions.)

Pocketbook lets you connect your bank account to the app so it can import your income and transaction data. Once you get some initial housekeeping — categorising your expenses and income — out of the way, you can then set up a safety spend limit based on Pocketbook’s analysis of your spending vs. income.

Pocketbook also learns from your transaction history, meaning it can predict upcoming income and bills. It’s very nifty for contractors or freelancers who have more than one income source that doesn’t always run through your accounting software — if you’re working on your TFN and ABN, for instance.

TrackMySpend

TrackMySpend expense apps for Xero online training courseThis free app, by ASIC MoneySmart, lets you connect your bank account to the app, categorise your expenses, nominate a spending limit, and create expense reminders that can be sent to as text messages ahead of their due date.

Like Pocketbook (but without the commercial overtones), TrackMySpend will also learn from previous trends in your income and expense data to predict future income and expenses. Best of all, TrackMySpend can be exported as an Excel file or connected to your accounting software. The iOS app is a bit out of date, though, so it won’t work on more recent Apple devices.

ATO

ato_mobile_app for Xero online training course videosIf you didn’t know it already, the Australian Tax Office has its own mobile app. It allows you to access the ATO’s online services, lodge and track your tax return (yes, right from your mobile phone), work out key tax dates and access tools and calculators.

Its most handy functions: being able to enter your expenses (including a photo of receipts and bills), track mileage, and record your income. It’s not automated, but it does propagate that info directly into your tax return, so you don’t have to do it later. It also accurately calculates your tax liabilities.

The ATO app’s best function, however, is its “business performance calculator”, which, using the data you input, will give you an indication of your business’s ability to pay its debts, as well as a comparison of its performance based on the ATO’s “small business benchmarks” data. Over time, it’ll also show whether your business has improved or declined since you last used the tool.

Understanding your business’s cash flow is critical to its ongoing financial health, and to your ability to make sound business decisions. Use one of these tools in conjunction with your accounting software to ensure your business is running on all cylinders.

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Our Xero training courses, which provide training in EVERY LEVEL for ONE LOW COST, will show you how to run financial reports, including cash flow statements that you can use to create forecasts in Excel. Visit our website for more information about our online training courses.

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Are you in business as a bookkeeper, tradesperson, retailer, trainer or real estate agent and want to stand out from the crowd? We can teach you the online marketing techniques to help you do just this! Check out what’s included in our comprehensive Social Media and Digital Marketing online training courses.

 

 

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