Xero Bookkeeping: A Comprehensive Guide

What is Xero bookkeeping? Why do you need it and how does it work? Whether you´re a small or medium business…

Xero Bookkeeping; The What, The Why, The How.

Bookkeeping is an essential part of running any successful business. It helps to ensure accurate records of income and expenses for filing taxes and it helps to track your company’s performance over time. But it´s not for everybody! Bookkeeping can be tedious, complicated, and time-consuming for those who don’t have the necessary expertise, and that’s where Xero Bookkeeping comes in. Xero is an innovative cloud-based accounting software that simplifies tracking and managing your finances, making it easier and more efficient than ever before.

Why use Xero Online Accounting Software?

Whether you´re a start-up, Sole Trader or Limited Company, having a good bookkeeping system in place is important. A cloud-based system such as Xero is a great option. Here´s why:

  • Easy to use. You can be up and running with Xero within minutes, and it is simple to use. This means you will spend less time on bookkeeping and more time running your business.
  • Affordable. There are no upfront costs or monthly fees, so you can save money on your bookkeeping.
  • Secure. Your data is stored securely in the cloud, so you can access it anywhere.
  • Saves you time. No installation, back-ups or maintenance is required, and all processing and administrative tasks are automated. This means you will have more time to focus on the aspects of your business that really matter.
  • Integrates with other software programs. Xero can easily be integrated with other essential pieces of software, such as Dext and Chaser. This will save you even more time on bookkeeping tasks.

What is Xero Cloud Accounting?

Imagine being able to access your accounts anytime, anywhere! That´s what Xero Cloud Accounting gives you. This software allows you to streamline your accounting across multiple devices, whether on the road, at work or at home. And it does it securely too!

How much does Xero cost?

The cost of Xero cloud accounting can vary depending on the size and scope of your business. For small businesses, the price is typically around £28 per month + VAT, while for larger companies or ones with a lot of requirements (e.g. payroll, CIS returns, analytics etc), this cost can go into the hundreds. If you have any questions or need help with the migration over to Xero, contact us to get started.

What can Xero do for me?

One dashboard
Stay on top of your cash flow and track your business performance in real-time with an overview of your financials and transactions all in one place.
Automatic bank feeds
Save yourself time by easily connecting your online bank account to import your transactions automatically.
Access for unlimited users
Add unlimited team members and accounting professionals with ease.
Extensive app integration
Integrate seamlessly with apps for inventory management, invoicing, time tracking, expenses and more.
Secure backups
Have peace of mind that all your data is stored in the cloud via automatic backups and is encrypted for extra security.
Be ´Making Tax Digital´ ready
Xero is an HMRC-recognised VAT software provider, so you can easily submit directly to HMRC.
Unlimited 24/7 support
Xero online support is available anytime, anywhere, with knowledgeable experts at hand.
Continuous improvement
Xero updates its software every 3-6 weeks based on customer feedback.
And More!

The reality is that every business needs a good bookkeeping service. Without the accuracy and speed of information businesses cannot make informed decisions and cannot achieve growth. Profits-Plus can help you increase your efficiency and profitability in order to run a healthier business.

What can a Xero Advisor Certified bookkeeper do for me?

1. Keep your books up-to-date: so you always know where your business stands financially.

2. Prepare financial statements: so you can see how your business is performing in real-time and make informed decisions about where to invest your money.

3. Help you save money on taxes: by ensuring that all your deductions are correctly documented and filed.

4. Provide expert advice: so you can make sound decisions for your business.

5. Peace of mind: knowing that your books are in order and that an expert is keeping an eye on them can give you peace of mind and allow you to focus on running your business.

Xero bookkeeping can be a great asset to any business. Not only does it make managing accounts easier, but it also provides real-time visibility into your company’s finances and enables you to better analyse the information. With automated features and accurate reporting capabilities, Xero is an invaluable tool for businesses that want to track their finances with minimal effort efficiently.

FAQ’s

Xero is a cloud accounting software that automates bookkeeping tasks, giving you more time to focus on your business. With Xero, you can do basic tasks such as importing bank transactions and sending invoices to more complex tasks such as payroll and analytics.

The cloud is a secure platform that can be accessed online anytime, anywhere, and from any device. Unlike many other accounting software built for desktops and adapted for the cloud, Xero was built for the cloud. As a result, there´s no business downtime or costs associated with upgrades, you just need an internet connection to access your financial data through Xero.

Xero Bookkeeping refers to the software features designed to help companies stay on top of their finances and includes invoicing, bank reconciliation, expense tracking, and reporting features. In addition, cash-based and accrual accounting systems are allowed on the Xero system, which is perfect for companies adhering to UK GAAP or IFRS. This online cloud accounting software is easy to use and can be accessed from any device with an internet connection.

Xero offers a number of features and benefits that make it an attractive option for businesses, including:

-Real-time financial data: Xero gives businesses instant visibility into their financial performance. This allows businesses to make more informed decisions about where to allocate their resources.

-Reduced paperwork: Xero automates many of the manual tasks associated with bookkeeping, such as invoicing and billing. This reduces the amount of time businesses need to spend on administrative tasks, freeing up time for other activities.

-Improved cash flow management: With Xero, businesses can easily track invoices and payments. This information can be used to improve cash flow management by ensuring that bills are paid on time and identifying opportunities for early payment discounts.

-Increased efficiency: Xero’s streamlined bookkeeping process can save businesses significant time and money. In addition, the ability to access financial data from any internet-connected device increases the efficiency of decision-making for business owners and managers.

Assuming you are familiar with the basics of bookkeeping and accounting, using Xero is relatively straightforward. Here is a step-by-step guide on how to use Xero for your business:

1. Set up your cloud account. When you sign up for Xero, you must enter some basic information about your business, including your company name, contact details, and currency. You will also need to choose a subscription plan that suits your needs.

2. Add your bank accounts. To reconcile your transactions in Xero, you will need to add your bank accounts to the software. This can be done by linking your accounts directly to Xero or by manually entering your bank statements.

3. Enter your transactions. Once you have added your bank accounts, you can start entering your transactions into Xero. You can do this manually or by importing files from your accounting software or bank. If you manually enter transactions, include all relevant details such as the date, amount, description, and categories.

4. Reconcile your transactions. Reconciling your transactions is an important part of using Xero bookkeeping software correctly. This ensures that all your transactions are accounted for and matched with the corresponding entries in your bank statements. To reconcile a transaction in Xero, simply click on it and then select the ‘Reconcile’ button.

5. Generate reports. One of the advantages of using Xero is that you can quickly generate a wide range of financial reports. This includes balance sheets, profit and loss statements, and aged receivables/payables reports. Xero also offers an online dashboard where you can view key financial metrics such as your total revenue, expenses, and cash flow.

6. Invoice customers. Finally, you can use Xero to send professional invoices to your customers. You can customise the look and feel of the invoices with your own logo and branding elements. Plus, you can set up automated payment reminders for customers who have not paid their invoices on time.

There are many benefits that Xero Cloud Accounting can bring to your business. Here are just a few examples of businesses that can benefit from using Xero:

1. Start-ups and small businesses – Xero can save you time and money on bookkeeping and accounting tasks, freeing up more time to focus on growing your business.

2. Businesses with multiple locations – Xero makes it easy to track and manage finances across multiple locations worldwide.

3. E-commerce businesses – Xero integrates with popular e-commerce platforms, making managing your online sales and expenses easy.

4. Freelancers and contractors – Xero’s simple yet powerful invoicing features make it the perfect solution for independent professionals who must send accurate invoices to their clients.

Xero is a cloud-based accounting software that offers small businesses and start-ups an easy way to manage their finances. The software is simple to use and can be accessed from any device with an internet connection. Xero also offers a range of features that make it a valuable tool for businesses, including invoicing, bank reconciliation, and financial reporting.

So, is Xero worth getting? Absolutely! As of 2022, Xero boasts  3,271 million  subscribers on its platforms. This shows the enormous power of the accounting software. If you’re looking for an accounting solution that will save you time and money, then Xero is definitely worth considering.

Important note: Weighing the pros and cons of Xero against your specific business needs will help you choose the right Xero subscription.

Yes, as Xero is a cloud-based software. As long as you have an internet connection, you can access your financial data through Xero via phone, tablet, desktop or laptop, and multiple users can work simultaneously.

No. You need an internet connection to access cloud-based software like Xero.

Yes! Xero is user-friendly and many Xero-certified bookkeepers and accountants will offer training to help.

“Can I learn Xero by myself?” is a question that we hear a lot. The answer is yes! Xero is a very user-friendly accounting software, and there are many resources available to help you get started.

However, we always recommend working with a certified Xero advisor or bookkeeper to ensure your books are set up correctly. They can also provide ongoing support and advice as you grow your business.

If you do decide to go it alone, our top tips for learning Xero are:

1. Utilise the wealth of resources available online – some great blog articles, YouTube videos, and webinars are out there which can help you get to grips with the basics.

2. Take advantage of the free trial period – this will give you time to explore the software and see if it’s the right fit for your business before committing to a subscription.

3. Use practice files – these can be found in the Xero help centre and will allow you to try out different features without affecting your live data.

4. Ask for help when needed – there is no shame in admitting that you need some assistance! The Xero community is incredibly friendly and helpful, so don’t be afraid to reach out if you’re stuck on something.

Yes! As an HMRC-recognised VAT software provider, you can keep digital records, create and submit your VAT returns online to HMRC, and track and manage VAT through Xero.

Yes. If you integrate with payment services like GoCardless or Stripe, you can add a “Pay Now” button to your invoices and your customers can pay you directly.

Absolutely! Xero can integrate with an extensive catalogue of apps, giving you more than 800 choices. This allows you to automate many processes so that the data flow is seamless.

There are many reasons why you should outsource your Xero bookkeeping to accountants. Here are just a few:
1. They have the expertise and experience to do the job right.
2. They can save you time and money by doing the bookkeeping for you.
3. They can help you comply with all the latest tax laws and regulations.
4. They can provide valuable insights and advice on how to improve your business finances.
5. They can provide peace of mind, knowing that your bookkeeping is in the hands of a professional. 

Xero Advisor Certified is a certification programme that allows bookkeepers and accountants to use the Xero online accounting software to manage their clients’ finances. The programme is designed to help professionals keep up with the latest accounting practices and trends, and learn how to use new software features.

The certification is offered through Xero and requires successfully completing an online exam and a project. Upon completion, the professional receives a certificate of achievement and is recognized as a Xero Advisor Certified Professional.

The average cost of hiring a Xero Advisor Certified bookkeeper could range from £40-£60 per hour. However, the price can vary depending on the bookkeeper’s experience and qualifications.

Benefits of Xero Online Accounting Software over other accounting software

One of the main benefits of Xero Online Accounting Software is that it is much easier to use than most other accounting software programs. This is because it has a very user-friendly interface and is designed with the needs of small businesses in mind.

Additionally, Xero Online Accounting Software integrates seamlessly with a wide range of popular business applications, making it even easier to use.

Another benefit of Xero Online Accounting Software is that it is very affordable. There is no need to purchase expensive hardware or install complex software. All you need is an internet connection, and you can get started using Xero immediately. Plus, there are no ongoing maintenance costs or hidden fees.

Finally, Xero Online Accounting Software offers a wide range of features and capabilities. Whether you need basic bookkeeping features or more advanced features such as invoicing and payroll, Xero has you covered.

Need help with your bookkeeping?

Want to save time and money? Want to work smarter and not harder? Want to gain peace of mind?

ProfitPlus helps you discover the right qualified accountant through outsourcing. We will find the right fit for you, matching your business needs with the right level of expertise, saving you time and money, and giving you complete peace of mind.If you would like to discuss your business requirements, get in touch; we’d love to talk about how we can partner with you.