When a client goes onto an accounting software such as Xero, we are often asked why our fees have not reduced as much as expected, considering the client is doing more work themselves. The most common reason for this is that the Xero records are simply not up to date and not accurate.
So, what do we mean by this?
If your Xero records are not accurate it can take us almost as long to find out where the errors have occurred, as it did to process the records ourselves last year, as we may still need to check through a full year worth of accounting records.
So what can I do to keep my records up to date and accurate?
- Take the initial training offered. Although Xero is user friendly it still has quirks like all software, and by investing in some initial training it will save you time and money in the future.
- Keep on top of your bank balance.
- Make sure, on a weekly basis, that your statement balance line agrees to your real bank balance at close of business yesterday.
- Check the bank reconciliation report on a monthly basis to make sure that there are no outstanding items on there. In a world where cheques are becoming a rarity and most people pay by instant bank transfers there should not be any outstanding bank payments or receipts on the bank reconciliation report older than just a few days.
- Review your debtors list on a regular basis, to make sure that the amounts on there are all still owing to you. If you find items on there that you think have been paid, check your bank entries to see why the invoice has not been paid off in Xero.
- Chase people for payment if the debts are over your credit terms.
- Consider setting up statements to be sent out automatically to your debtors, once they have been owing more than a certain time limit.
- Add a “pay now” button to your invoice to receive quicker payments from customers.
- And finally check your creditors listing regularly to make sure that it is up to date and accurate. If you have made supplier payments with no invoices (this can especially happen with Direct debit payments) get in touch with your suppliers for the invoices; this will make your records complete, and also means you can claim the VAT back on the invoice, if you are VAT registered.
If you need any help with any of the above, or have any queries on Xero or Xero record keeping, please give one of our Xero champions a call to see how we can help you.
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