Bookkeeping is a process that involves recording and classifying any of a business’ financial transactions. It gives business owners and other key decision-makers overall visibility on how well operations are faring and helps the company stay on top of its taxes.
The logic behind meticulously documenting where your SME’s cash is going is straightforward, but many people struggle to put it into practice religiously. They are either unfamiliar with the process itself or don’t have enough time to do it. Whatever the reason, it would be easily resolved by choosing to outsource bookkeeping needs to a service provider.
There’s another way you could make your bookkeeping experience go as smoothly as possible: utilising software like Xero.
What Is Xero and How Does It Enhance Your Bookkeeping?
Let’s start with the basics: Xero is an online accounting software. It allows small- to medium- businesses to grant relevant people — the accountant, the bookkeeper, and anyone else on the finance team who needs it — access to the company’s latest financial information.
The software ensures that everyone who needs visibility on the numbers can readily access it on the cloud so that the entire team is always on the same page. Not only that — Xero expedites the bookkeeping process by automating or streamlining time-intensive tasks. This can help SMEs manage their labour budget and resources better.
How can it help with my books?
Accounting software such as Xero was created to pick up the slack for tasks that are relatively simple or repetitive, such as data entry, invoicing, bank reconciliation, etc., but take up too much time for a person to accomplish accurately. With an online tool like Xero, it’s possible to:
- Check the business’ cash flows from mobile
- Pay bills automatically
- Pull transaction data from various sources, including POS systems, invoicing software and banks
- Receive alerts on sales invoice payments
- Reconcile bank statements with ease
- Send automated reminders related to the business’ accounts payables and receivables
How can it help the business’ decision-makers?
Because it significantly cuts down on time- and labour-intensive tasks, Xero is an invaluable tool that businesses can leverage to make effective business decisions quickly and seamlessly. Specifically, key decision-makers in the company will be able to do the following when they have accurate and up-to-date records:
- Check if there are any discrepancies in the cash flow or incorrect payments that could cost the business money
- Complete company tax returns properly so they can be filed early
- Have visibility on the state of the business’ finances — the finance team will be able to project whether the business will do fine in the next few months or if steps need to be taken to distribute resources more intelligently
- Organise the business’ financial records so that it’s easy to share them with key executive and finance persons for reports. This way, working with other parties like investors and accountants or institutions like banks and lenders, becomes significantly easier
- See if there are more funds going out of the business than there are coming in
- Trust that the financial information on have will be enough to plan and budget the company’s funds for the next fiscal year
Xero and Outsourcing Your Bookkeeping Processes
When you’re a small business, you might be able, with some lessons and practice, to get away with handling the bookkeeping by yourself. Consider, however, that your goal is to grow the business — doing the books on your own when you have a company to run is going to become a burden in the long run.
You’ll need some help from skilled professionals and trustworthy online accounting software. Moreover, while it could be advantageous for a larger company to keep an in-house finance department, as an SME owner, it’s wise to opt for outsourced bookkeeping solutions. Doing so allows you to pick out services based on your business’ current needs and budget.
