Getting real time: using Xero to understand your business performance

But getting that clear overview can be tricky for many busy, time-pressed business owners, especially if you don’t have the best access to your accounts, key numbers and reporting.

• Do you check your bank account and see if you’re in the black?
• Do you look in your order book to see what work is in the pipeline?
• Do you rifle through piles of receipts and scraps of paper trying to work out spending?
• Do you spend hours tapping away at spreadsheets trying to figure out if the business is hitting its targets or is lagging behind?

If this all sounds horribly familiar, then we have some good news for you: you can replace all of these rather haphazard processes with one far more efficient solution to your business performance needs.

The answer is to start using your Xero online accounting software more effectively…

Xero as your business performance solution

Xero is our cloud accounting platform of choice here at FD Works. But if you think Xero is simply a place to capture your historic numbers and prepare your VAT returns, we’ve got a nice surprise for you – it’s far more than just bookkeeping software.

You remember that need to track, view and measure your business performance?

Xero has been designed from the ground up to give you – the business owner or finance person – a completely up-to-date view of the key information on your business.

You can check your bank balance, see who’s due to pay you and view your profit as it stands for the month – and all you need to do is put a few new elements in place to make Xero an incredibly powerful overview of the health of your business.  

So let’s walk you through how automated bank feeds, online invoicing and automated expense systems will transform your reporting – so you can really make the most of Xero

Get a direct, automated bank feed

We all use internet banking these days. But many of the high-street banks still expect you to have to move manually refresh your bank feed or import cumbersome csv. statements into your accounting software. Surely there’s a better way?

Yes, you guessed it, there is… and it’s Xero’s direct bank feed. Xero has a live, real-time feed to most of the UK’s main business banking providers, including:

• Barclays
• HSBC
• Metro Bank
• NatWest
• Royal Bank of Scotland
• RBS International (including RBS International T/A NatWest and Isle of Man Bank)
• Santander Corporate and Commercial
• Silicon Valley Bank

Direct feeds automatically pull through all transactions into Xero, so you always have a totally current view of your bank balance and your recent transactions.

And that automated, real-time feed has a number of benefits:

• Faster processes – there’s no time wasted with manual processes or importing spreadsheets.
• Easier bank reconciliation – bank reconciliation is easy, with Xero automatically suggesting matches for recent transactions and invoices.
• An up-to-date balance – reconciling your bank transactions is done in a jiffy, giving you a totally current view of your balance.

If your bank doesn’t supply a direct feed, don’t despair. Yodlee can provide a third-party feed between your bank and Xero. This pulls your transactions through in the same way, but without some of the speed of the direct feed.

Do your invoicing online

How do you raise your invoices to customers? If you’re still raising bills, printing them out and posting them out to the client, now’s the time to move to Xero.

Xero’s online invoicing means you can raise your invoice from your accounting package. You email an online copy of the invoice straight to the customer’s finance team, and Xero pulls through that transaction into your accounts – so it’s ready to match when the customer pays the cash into your bank account.

No printing. No posting. No waiting… and the faster your customer gets the invoice, the sooner they pay, and the more up to date your cash flow will be.

Automate your invoice payment processes

When you’re paying bills from your supplier, do you currently enter your invoices manually into Xero and attach a PDF copy? Or worse still, do you print off paper copies and scan them in?

Xero offers third-party access to smart-scanning that does away with this. Save time, and get access to real-time numbers, by sending your invoices and receipts straight to Receipt Bank.

Receipt Bank is a Xero-compatible app that integrates with your Xero system and pulls your supplier invoices straight through into the relevant ledger. Forward your supplier’s invoice on to Receipt Bank, or snap a pic with their handy mobile app, and they’ll process the paperwork based on the preset info you tell it on account code, VAT treatment etc.

All that data is published straight to Xero for you and appears under your payables – almost as if by magic (we’re assured there are no magic elves involved in the process).

Automate your expense claims

How long does it take you to get your receipts, expenses and travel claims together? The longer it takes, the less representative your balance is and the more out of date your overall view of your expenses spending.

So, how can you change that?

Receipt Bank:

Receipt Bank is also a great way to process your expense claims electronically. Send your petrol receipts and travel expenses to Receipt Bank and see them pop up in your Xero expenses. One tip – make sure you use different log-ins for your company and personal use and that you’ve set up all your details correctly.

There’s more about Receipt Bank in this video overview

Tripcatcher:

Tripcatcher is a really useful app for recording your mileage. Used in conjunction with Receipt Bank, you can easily capture your mileage and send your receipts and mileage to your expense claim in Xero.

There’s more detail on the Tripcatcher Dashboard in this video:

So now you’re real time!

By setting up a direct bank feed, using Xero’s online invoicing and making the most of the Receipt Bank and Tripcatcher Xero Add-ons, you bring your numbers right up to date.

Once these elements of Xero are set up, you’re ready to see your business performance in real time. That means we can help you get a detailed overview of your Xero numbers that’s bang up to date – and shows you how the business looks RIGHT NOW, not two months ago.

We’ll pull off reports to show you your profit and loss (P&L), your aged payables and any outstanding debts that need chasing. We’ll customise your Xero dashboard to give you some incredibly useful analytics for their business. We even give you training and support to get you up to speed with Receipt Bank and Tripcatcher.

And, of course, we’ll be there with plenty of proactive advice on how to improve, evolve and grow your business, with a perfectly real-time view of your business performance.

Who are FD Works?

Our team of accountants, business advisors and Xero specialists are based on Greenway Farm in Wick, strategically located between Bristol and Bath. Established in 2013 we provide a growing list of clients across the UK with hands-on finance support and FD-level strategic advice.