FOR BUSINESSES WORKING on large projects spanning weeks or even months, keeping track of time, cash flow and profitability is imperative. This is even more so for businesses that work on fixed-rate contracts or tenders.
Such fixed-rate projects are common in the building and construction industry, but also the creative, engineering, and IT industries.
Many of these businesses manage a project’s workflow across a number of different documents (spreadsheets, their CRM, accounting software) — and many don’t manage it properly at all.
As a consequence, projects often come in over budget. A number of cloud-based project management and workflow apps aim to change that, however.
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.
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.
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.
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.