Content Outline
What is Xero?
Accounting used to be manual and was often done using pen-and-paper with an accountant who knew how to use the calculator and numerous papers to be filled in. It involves reading the voucher sheets, invoices, and other financial records and hands-on compiling of a business’s books. Now, there are many more effective services because of the advancement of the internet and the development of digital media.
Xero is one of the most effective accounting software that businesses can use in the market at the moment. Xero targets small and medium enterprises and provides its software through software-as-a-service, commonly referred to as SaaS, which implies that one has to pay for the software to use it. The price varies depending on the number of employees that are to use it, the services needed in the company, and the time period of the subscription.
How Does Xero Work?
Companies using Xero can reduce the amount of manual effort in counting the income from multiple invoices, receipts, and so on for the month or week. It helps to arrange the information so that companies have more time for other business matters such as business development and operations.
Xero is a cloud-based accounting tool that can easily be accessible on mobile devices, smartphones, and computers. As long as the user has a steady internet connection, they can use the software to complete accounting-related tasks such as sending invoices and categorizing bank transactions.
Xero bookkeeping is specifically developed for small and medium businesses which means its features cannot integrate with large detailed organizations. However, if the user wants to adapt to incorporating Xero into their routine, this app can be a cheaper solution even for large companies. Xero is constantly striving to develop what can be offered on their software and will surely have strategies to cater to large companies in the future.
Read more: Xero HK for Startups: Laying the Foundation for Growth
What Kind Of Features Xero Have?
Xero is accompanied by many useful features aimed at helping small and medium enterprises with their accounting.
Xero can be used to produce invoices from templates and basic options that best suit recurring invoices. The user can be notified every time these invoices are read by the recipient which makes it very easy to know if the person has seen the invoice or not. The other feature that is useful in a business is that Xero can also act as a tool for managing the payroll of the business by the reduction of handling large amounts of data input at one time. Xero also has the feature that makes the business automated to make regular payments to suppliers, utilities, and other services which are considered expenses on the Business’s balance sheet.
Xero is also special in a way that they also allows third-party applications to be built and connected to its system. As of now, there are over 1000 third-party apps that one can use for inventory, invoicing, time management expenses, and records among others. These are additional features developed by players, and these are made available for use in extending the capabilities of Xero.
Xero is an HMRC-certified VAT solution provider meaning that a business can file their online tax return through basic and easy-to-use digital tools that will minimize the probability of making an error, and enhance the competency of tax estimation. Also, Xero has features that can facilitate the claiming of expenses, which can also be added to the filed tax return to easily manage the company’s financial obligations.
Related article: Streamline Your E-Commerce Finances with Xero
What Kind Of Businesses Should Use Xero?
Xero can complement any kind of business generally. Despite the fact that Xero has been developed for small and medium businesses, it is also adaptable for large companies. Indeed, it is designed to fit large companies with branches, tens or hundreds of employees with multiple bank accounts and methods of payment.
Indeed, even the company that developed Xero has around 500-1000 employees and uses Xero for managing their accounts. The industries that are mainly using Xero include accounting, computer software, recruitment, and information technology. Xero was adopted by over 1.5 million subscribers and several companies with more than ten thousand employees using it in their business processes. But, most businesses that are use Xero have between 10 and 50 workers.
To sum up, Xero seems to be fitting for any business and any type of industry however, large businesses can potentially face difficulties in adjusting Xero to the framework of their business if it is both vast and uses multiple bank accounts and various payment services.
Related article: Streamline Freelancers and Sole Traders Bookkeeping with Xero
Benefits Of Using Xero
Xero has several advantages that are associated with other cloud accounting service providers.
- Real-time financial reports – Another benefit of cloud accounting is that the results are delivered up to date. Unlike other accounts where you have to wait for a weekly or daily report on the financial situation, it will do money transfers at once, implying that you can get updated statistics of your financial status.
- Flexible data access – Since Xero is portable you can easily get your financial information and perform financial tasks at any location.
- Multi-user collaboration – Xero is a cloud-based software that allows for multiple users to work on it at the same time and make the necessary changes or adjustments as required, making it possible to have multiple people working on Xero.
- Basic data back-up system – With Xero, simple back-ups are made to ensure the prevention of any interference with the financial data and hardware crash which could cause significant strain on business continuity.
- Practical and convenient for clients– The program is highly usable and has support for many potential clients due to its modularity. This indicates that a small business is able to increase the order completion and the number of clients served without hitting the constraints that come with the software at an early stage.
- Add on third-party support – Xero also allows third-party developers who can add to the functionality of Xero with its third-party support which means Xero can be enhanced progressively according to what the community is asking for.
- Compatibility with other programs and applications – Xero is a single program for accounting but it can be easily synched with other programs for example for employee payroll and payment acceptance.
Ready to simplify your accounting process and take your business to the next level? FastLane’s expert bookkeeping services are here to help you harness the full power of Xero. Whether you’re a small startup or a growing medium enterprise, our team will ensure you get the most out of this innovative software. Don’t let accounting challenges hold you back—contact FastLane Xero Certified Advisors today and see how easy managing your finances can be with Xero!