Xero is an accounting software which is easy to use and it can work behind the scenes to help you save time. You should let Xero perform the tedious, repetitive tasks that used to consume most of your precious time. Your time will be freed up for doing things where true values can added to your business.
It is a paid software which is cloud based, but it is free for you to invite your advisors into your Xero files at no additional cost. This make it easier than ever to collaborate. This saves you time from having to export the data and have it sent to your advisor.
It enables a single set of data (or so called single ledger) which you and your advisor can work from. This makes sure both parties are seeing the same set of data at the same time when they work and collaborate.
Information preparation before your Xero setup
To set up to use the Xero, a professional accounting software, you will have to enter your entity information into Xero’s cloud based database. To do that, you need to prepare the following information of your entity:
- Name, address, email address
- Company Logo, website address, social media IDs/accounts
- Tax ID, business entity (sole proprietorship, etc)
- Accounting method (cash or accrual)
- Chart of accounts list
- Bank statements, credit card statements, account Balances
Prepare the following copies:
- All the outstanding checks written
- All the outstanding deposits
- All the open customer invoices
- All the unpaid bills
You will also need to have answers to the below information:
- The fiscal year
- The industry or main category of your business
- The payment terms which your business offers the customers
- The payment terms which your business have agreed with the suppliers (or vendors)
- Purchase orders, quotes, etc that you create
- Sales tax which you charge the customers
- Income and/or expenses based on locations, departments, and more
- The exact day your business starts using Xero
Business challenge in invoicing – A solution
One key challenge when running your business is to have the ability to keep track of your income and expenses. An easy way to achieve this is to use Xero.
Xero lets you create professional invoices and gives you the full transparency in the reports to see which customers have paid and which have not. When you can see who have not been paying after the payment due dates, you can start chasing for those due payments. For long term, your business will get paid quickly when you are using it to do the accounting.
With Xero being properly set up:
- Your customers can pay via credit cards.
- Your customers may pay through ACH directly.
- You can allow Xero to perform the accounting work in the background for the accounts that you need to track the income and invoicing.
- You can make sure the accounts receivable balance is up-to-date all the time.