Is Xero Really All It’s Cracked Up To Be?

How does Xero stack up in the cloud accounting game?

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Xero CEO, Rod Drury

WHEN XERO FIRST ENTERED the accounting space, it gave MYOB a real run for its money — something Xero continues to do to this very day.

When Xero first entered the market, it was with a bang. You see, even though  Xero and MYOB share many of the same features, Xero was cheaper and easier to use than MYOB, but perhaps even more so, it was also cloud-based. Being cloud-based meant you didn’t have to buy and install pricey software that would be out-of-date within 12 months. A huge advantage.

Since then, however, a number of cloud-based accounting applications have entered the market — QuickBooks Online (now distributed by their US-based parent company Intuit), Reckon One, Saasu, Zoho, and so on.

As business owners have more choice than ever before, it’s got a lot of people wondering about whether the two market leaders (Xero and MYOB) are really all they’re cracked up to be, Xero in particular.

Missing a dropdown menu

Even though Xero was hailed as a breath of fresh air when it first entered the market, it is still a little more complicated to use when compared with other cloud accounting apps, like QuickBooks and Reckon One. For instance, the purchase orders feature is still hidden behind bills, when it could easily be access via a dropdown menu. But it’s not a major quibble.

Xero’s contact profile misses a beat

Although Xero allows you to assign customer numbers for your suppliers or customers in the contact profile, it doesn’t have the functionality to record customer numbers assigned by supplier or customer.

If you’re trying to get in touch with Telstra, for example, with whom you’ll have been assigned a customer or account number, you’ll have to dig around for the paper bill to find that customer or account number.

It’s easy to file bills, though

This feature is available in QuickBooks, and it’s also available in MYOB, but as is often the case with MYOB, it requires more steps to do what you can in Xero in just a few clicks. Rather than keep paper bills on hand, Xero allows you to attach them to you transactions, so you never have to go hunting around for a bill again (very useful given the contact profile issue mentioned above).

In MYOB, you must upload your bills to your in-tray, and then link them to your transactions. This is annoying, because it requires you to leave the transaction window and open the in-tray one.

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Remember that when you select a cloud accounting package for your business, do not choose solely based on price. Make a list of the needs of your business and the functions you’ll require, and then select the accounting package that suits your needs the most. Ask your bookkeeper and other business friends for their recommendations as well.


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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 or tax agent, as the certification relates to their software knowledge only.

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


 

Financial Reporting with Expensify and Xero

How Expensify can link with Xero

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Are you deducting everything you could be? Perhaps you need an app to help you.

WE’VE TALKED IN THE past about what a life saver daily reconciliations can be, and why some businesses could benefit from reconciling their account daily, twice weekly, or at least, on a more regular basis than once a month.

The expenses your business incurs form deductions that reduce your taxable income, so making sure you’re recording them accurately — and then storing them securely too — is an important part of your business remaining compliant.

An online software program like Xero will enable you to enter your expenses and transactions; and you can also use an app to automate the process for you, like Expensify.

Expensify for accurate record keeping

The way Expensify works is pretty simple. You connect it to your bank or credit card accounts, and it will import transactions into its app, which you then approve as business expense and it send the data through to your connected accounting software — in this case, Xero.

If all your expenses were electronic, Expensify wouldn’t provide much more value than the bank feeds feature in Xero. But Expensify does more than just that.

It can, with impressive accuracy, import expense data from any hardcopy receipt — even handwritten ones — by taking a picture on your smartphone, sending them to a dedicated email address for upload, or importing them straight from Dropbox or Evernote.

Once a receipt has been uploaded to Expensify, it stores it in the cloud, so you don’t have to keep the physical copy.

Accurate vehicle mileage

The best feature, which anyone who uses their vehicle for business purposes will appreciate, is how it tracks mileage. You have two options: input the distance you travelled by typing it into the app, or using the app’s built-in GPS.

You simply tell Expensify to start tracking your mileage and it will, using its own motion sensors and GPS. This is different (and better) than other apps that work out the distance you travelled using routes in Google Maps after the fact.

Expensify would be better if it automatically detected car motion without having to open the app at the start of your journey, like the QuickBooks Self Employed app does. Of course, that also results in many unnecessary travel trips — taxi, Uber and bus rides, lifts from friends, as well as your own personal trips — showing up in the QuickBooks app.

Create expense reports

Expensify also lets you create expense reports to collate expenses together. This is extremely useful for businesses that want to see expenses associated with their projects, bill their clients for expenses, or for businesses with employees who need to be reimbursed for their expenses.

Rather than manually collating expenses together and matching them to employee trips, work trips, customers or projects, Expensify does it for you, and then imports it straight into Xero as either a bill or invoice.

An expense app like Expensify will help your business reconcile its accounts regularly and more accurately, and will also ensure you’re compliant by storing your receipts securely in the cloud.

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Our Xero training courses will show you how to track expenses in Xero and how to connect third party apps to your Xero account. We provide training in ALL SKILLS LEVELS for ONE LOW COST.


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Are You Making these GST Mistakes in Your Bookkeeping?

Being Jack of All Trades can land you in hot water with BAS

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Don’t submit inaccurate financial documents by trying to do everything yourself by way of bookkeeping.

IT’S PERHAPS EASIER TO do your own bookkeeping these days than it used to be; particularly if you’re using a cloud accounting program like MYOBXero or QuickBooks, which are among the easiest, yet robust, accounting applications currently on the market.

But even so, there are many aspects of Australian tax that, while accounting software makes it possible to carry them out yourself (like business activity statements, for example), it’s not a good idea unless you really know what you’re doing. Here are the three GST mistakes nearly every business owner makes in their bookkeeping.

Claiming GST twice

This is most common when a business has vehicles, machinery, plant equipment, etcetera that are either being leased or are under hire purchase. The business owner’s accountant will typically claim the full GST component for in the first quarter that the business purchased the equipment, but confusion generally sets in when it comes to recording regular monthly payments.

Very often the business owner will record it as GST or a capital expense, and because both show up in their BAS reporting sheet, they end up claiming the GST twice.

Recording GST for all expenses

There are many expenses that do attract GST. They include:

  • Motor vehicle registrations
  • Bank charges
  • ASIC fees
  • Paypal transaction fees
  • Interest and director fees / drawings.

Claiming GST credits on purchases from suppliers not registered for GST

Not all business owners are registered for GST, and although they should state somewhere on their invoice that no GST has been charged, oftentimes they’ll leave you to assume that. As a general rule of thumb, if the invoice doesn’t show an amount in the GST column, there’s a good chance the supplier isn’t registered. To make sure, though, visit the ABN Lookup Page and search their ABN.

Accounting software is easier, but Aussie tax remains as complicated as ever

Even though MYOBXero and QuickBooks are among the most user friendly accounting software applications on the market, Australia’s tax laws remain as complicated as they’ve ever been. So while you can do your own data entry (reconciling your bank statements), it’s a good idea to hire a BAS or Tax agent to look after the more complicated aspects of your tax and BAS requirements.

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Want to learn or brush up your cloud accounting and bookkeeping skills?

At EzyLearn we offer online training courses to help you up-skill and find employment. Choose from our range of online accounting software courses, as well as business start up and management courses, to marketing and sales courses — or update and further your skills in a range of Microsoft Office programs (ExcelPowerPointWord) or social media and WordPress web design). Many of our courses come with a ONE LOW COST for ALL SKILLS LEVEL option. 


Need help finding a BAS or TAX Agent?

find a local bookkeeper

National Bookkeeping is an 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