For all of you out there already using Xero, Quick Books, Sage (or another app on your smart phone) to manage your business finances – this is your chance to feel smug! Accounting apps can help small business owners save a lot of time by making it a lot easier to manage their finances.

We regularly work with clients who have a good set-up and are using the apps fine, but they’re missing out on some great time-saving devices. To answer this, we’ve put together some tips on how to fine tune your automation with Xero (most of these apply to other accounting apps too).

Customise your Chart of Accounts

Your Chart of Accounts is a menu for how all the transactions in your business are categorised. It’s easy to ignore it because it looks quite technical, but it’s really useful. It lets you group similar kinds of transactions (e.g. all sales invoices; spend on certain kinds of raw materials; all salary payments) and then ask questions about how your income and expenses change over time.

Tip #1 Use plain english in your Chart of Accounts

A really easy improvement to your Chart of Accounts is to use words and categories that you’ll understand when looking at them later. For example, use “Rent (office)” instead of “Rents & Rates” as it’ll be quicker for you to input and you’ll spend less time trying to understand your reports. You can also delete entries you don’t need.

Tip #2 Set up your reporting from the start

The other easy improvement is to set up separate categories for things you know you’ll want to compare. For example: you may want to compare costs of permanent and casual staff, so make sure each has their own cost code. Or you may want to compare costs of purchasing different types of equipment used on different jobs, so make sure each has its own cost code.

Xero users can find information on how to access their chart of accounts here.

Many business owners aren’t sure what kinds of reporting they need or what makes most sense for their business. This is where one off help from a finance professional can save you a lot of time later.

Enter everything as you go, don’t put it off!

You know this already – it’s always best to enter your expenditure and your sales invoices as you go. Having an easy to use app makes this much easier – you can send invoices and enter expenses on your phone, while you’re on the go.

Tip # 3 send invoices directly from the app

Have you mastered sending your invoices directly from the mobile app for your chosen software? Once you’ve got this nailed the software can send to the customer for you and track which payments are overdue. Find out how to do this with Xero here.

Tip #4 automatic late payment reminders

Get your software to send reminder emails to late paying customers. It’s a delicate subject and you definitely don’t want to get this wrong, but with a bit of financial know-how you can lighten your credit control load without upsetting your customers. Find out how to do this with Xero here.

Tip #5 email invoices directly into your software

Do you get some invoices by email that end up waiting until you’ve got time to upload the invoice to Xero? With a little bit of set up, you can forward these emails directly to Xero and it will create a draft Money Out entry for you – find out how here.

Tip #6 scan paper invoices directly into your software

What do you do if you still have some paper invoices? Add ons to the software can help, for example Scan2Invoice integrates with both Xero and QuickBooks. When you scan a document it automatically creates the Money Out entry in the software and saves a PDF of the invoice.

Spend more time on the work you love and less on the admin

We meet so many business owners who want more time for the work they love. Every minute counts when you run your own business. Getting your software set up right from the beginning can save you lots of time later. So if you’re already paying for software, make sure you squeeze out every last time-saving benefit.

It’s also worth ensuring you’ve not made any false assumptions in your set-up that might cost you in tax penalties, surprise bills or lots of time needed to unpick problems later down the line. You can always ask your local friendly bookkeepers for help – we can offer set-up, training and ongoing support and can tailor a package to your needs.

Call us on 01825 763378 or email and we’ll be happy to arrange a no obligation chat over a coffee.

Photo by Yura Fresh on Unsplash