Since Nicola Pearson blogged about cloud accounting systems a couple of weeks ago, I have been on a training course for a cloud based bookkeeping system called Xero.
Following the training I would like to share with you 5 features of Xero that will simplify the way you do bookkeeping.
- Both your accountant and the client/business owner have access to the latest data.
Your accountant will have a separate login. This allows them to log in periodically to check that entries are being recorded properly. If there are some transactions where you are unsure of the correct accounting treatment your accountant can log in and check you have posted it correctly. Getting the bookkeeping entries correct could save you money at the year end so your accountant doesn’t have to spend time correcting the postings.
- Xero is based in the cloud.
This means that you are not tied to one single location or computer for your bookkeeping. If you travel frequently it may be more helpful to record all your expenses as you go rather than collate them all and record all once you have returned.
- You can upload your bank statements into Xero.
Most other software packages require the manual entering of each and every bank transaction. If you use online banking, you can download your bank statement, save in an accepted format and then upload straight into Xero. You also have the option to connect directly to certain banks and Xero will download the data automatically.
- Xero will help match bank payments/receipts with invoices.
Once the bank statement is imported into Xero it will try and match the transactions with invoices already in the system. Xero will display its suggested matches. If it is correct – one click of the mouse will match the bank payment or receipt with the invoice.
- Visual aids/analytics
Xero produces some graphic data using the accounting entries made. For example, a line chart showing the bank balance over a period of time. This can be used to look at when the business has cash surplus to their immediate needs and when there is a deficit. Only once this known can a business put a more effective cash management plan in place.
Jonathan Cohen – Audit Team
Westbury Accountants and Business Advisors is an accountancy practice based in London. Westbury have been providing Accounting and Tax solutions to small and medium sized businesses since 1936. Talk to the team at Westbury on 0207 253 7272 or visit http://www.westbury.co.uk.