Xero For Dummies. Heather Smith

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Working out what support you need

      

Establishing a live Xero training file

      As a fresh-faced graduate, I arrived in Cheltenham, England, to start my first real job at an aerospace manufacturing business. Using a pencil, I worked with a team of account clerks, processing journals on huge A2-size (420 × 594) sheets of paper. Towards the end of the day, we all handed our paper to a tiny grey-haired lady. She gathered the paper and, using a huge noisy mechanical calculator, added up our journal entries and updated the trial balance. When all the work was entered and the debits equalled the credits, she rang her bell, signalling we could go home.

      One day a magical grey box arrived on my desk, and inside its screen were rows and columns. ‘What is this sorcery you have brought to our office?’ my fellow workers cried. I explained the magical box was a computer and what was inside was a spreadsheet. I could enter numbers and formulas and the computer would process the results. (Yes, I’m a dinosaur and worked in offices pre-computers!) Pretty soon after that, we said goodbye to the mechanical calculator and shipped it off to the local museum.

In the last 30 years, desktop accounting software has replaced a team of accounts assistants and grey-haired ladies ringing bells. And, as the internet evolves, the practice of accounting continues to undergo revolutionary changes. Using Xero as your accounting system, you have the ability to access and process accounts online from anywhere you can access the internet. Furthermore, this accounting software has the capability to seamlessly communicate with other software solutions, reducing the need for mundane data entry.

      In this chapter, I give you a rundown of Xero, covering what it is and what it can do for you. I help you explore the different editions available (based on the needs of your business), take you through the My Xero home page and Xero Dashboard, and outline the different user roles available — again, the user role you choose depends on the needs of your business and how much involvement you want to have in its accounts. Finally, I give you an overview of how Xero’s tools and reports can help you with your strategic planning.

Understanding the Advantages of Xero

      Xero is a subscription-based online small business accounting software. It does everything you would expect business accounting software to do; however, Xero offers so much more, including the following:

       Users who’ve been given permission to access the Xero data file can access Xero over the internet and complete accounting tasks anywhere, any time. Furthermore, users can access the same file simultaneously.

       You can authorise transactions that occur on your bank, credit card and online payment gateway statements to directly feed into the Xero system. Just like receiving email into your inbox, transactions feed into your accounts, ready for you to process. See Chapter 4 for more on bank feeds.

       You can create and send invoices, account for expense claims and purchases, and do your bank reconciliation via mobile devices, meaning you can issue your clients with invoices while you’re on site with them.

       Through the concept of a single ledger, both you, as the business owner, and your accountant can access the same data, reducing the need to transfer data and improving efficiencies. Your tax accountant can finalise end of year accounts directly into the business organisation. See Chapter 11 for more on this.

       You can enable the software to communicate with other Xero users or other online software programs. This means Xero users can invite other Xero users to connect with them, which unlocks a portal between the two users’ data files — so, for example, when an invoice is created in one file, it appears to the other file as a draft bill. This opening up of data files minimises data entry, improves accuracy and hopefully helps with cash flow! More complex communication connections can include CRMs (for managing customer relationships), inventory management, e-commerce and other add-on business solutions. With Xero at the core of your business’s operations, you can create a fully connected cloud business platform. See Chapter 16 for more on this.

Xero has been described as similar to those vitamins disguised as gummy candies — users enjoy the software so much they forget they are actually doing accounting.

PROS AND CONS OF WORKING IN THE CLOUD

      Do you recall the first time the internet really worked for you? I do. From my apartment in Toronto, I co-ordinated a reunion with friends from Singapore, New York and Texas via email. We were to meet beside the Snuffleupagus at Sesame Place in Pennsylvania. I was so impressed: I arrived at 10 am and everyone was there! We hugged and shrieked in excitement. Using email had saved us a small fortune in telephone charges, and it was a breeze to use — all of us from the moguls to the mums understood how to do it. These days, imagining a time before email is hard. And one day, imagining a time when everyone didn’t conduct all their business in the cloud will be hard!

      Working in the cloud means working via the internet — the files you’re accessing and working on aren’t stored on your computer. As with everything, benefits and concerns of working online exist. But, indisputably, working across the internet is the way of the future. Governments across the world are funding infrastructure that enables access to high-speed internet connections, ensuring their citizens remain competitive.

      Without realising it, you may already be using cloud services. If you’re using a smart phone, email, internet banking, Skype, Google Apps, or storage services such as Dropbox or Evernote, you’re embracing the internet — and some of these devices or services make use of the cloud.

      If you’re not already convinced, here are some of the benefits of cloud computing:

       Reduced costs: Working in the cloud means you have no requirement for in-house servers to host other computers on the network. This reduces your ownership, maintenance and insurance costs.

       Real-time data: You can access accurate and timely reports, which can assist with informed decision-making.

       Productivity gains: The time taken to respond to issues is minimised because data can be accessed wherever you can access the internet. Integration features mean you don’t need to re-key data, because fields are matched and flow from one area to another. You also don’t need to install or upgrade anything on your computer.

       No platform issues: Mac or PC? You no longer have any need to worry what platform you’re working on because you access the internet via an internet browser.

       Collaboration: Multiple users from around the globe can simultaneously log in and view the same information, depending on their access levels. Yes, you can review business reports while cruising the Nile!

       Flexibility: Applications can evolve to suit business needs.

       Reasonable pricing: Many applications have reasonably priced packages available and offer options to suit different business requirements, from the micro through to the enterprise business. You can start with a low-cost package and, as you grow your business, move to a bigger package.

       Reliable data backups: СКАЧАТЬ