There are 5.6 million small businesses in the UK right now, figures from the Federation of Small Businesses show, making up 99.3 per cent of all private sector companies at the start of 2018.
And no doubt there are many out there who will be keen to expand over the next 12 months and beyond – but it’s often easier said than done, especially for young companies still trying to gain a foothold in the market.
Luckily, there are all sorts of tools and resources out there that could prove especially beneficial and it could certainly be very fruitful indeed to talk to Xero accountants in London to find out all about online accounting software and how it could be advantageous for company expansion.
Online accounting can be fantastic for business because it helps you to carry out your essential bookkeeping tasks faster, which frees up your time for more important jobs.
Automation is a serious hot topic right now for business and Xero can really help in this regard, whether it’s by sending out invoice reminders or importing bank transactions… all the legwork is done for you and you don’t even have to think about it.
And once all your data is stored safely in one place, you’ll find it even easier than before to see how your business is tracking in terms of bank balances, invoices, bills and more.
Keeping an eye on your finances has never been easier – and this is often an area that small businesses find hard because it’s all so new and can be complicated unless you start off on the right foot.
There’s an online accounting dashboard which can monitor cash flow using simple and easy-to-understand charts and graphs, with customisable reports that allow you to track which monthly trends are the most important for your company.
You’re also able to follow up on outstanding invoices with a useful summary of what you’re owed, filtering invoices by due date, how long they’ve been outstanding for and the amount owed. You can also invite your qualified accountant and bookkeeper to your Xero account so they can work alongside you and ensure you meet all your tax obligations.
Xero also comes with easy-to-use payroll software so you’re better able to track working hours, manage leave and process pay, and control access for your members of staff. Your employees, meanwhile, can make use of the Xero Me mobile app which allows them to view their payslips, apply for leave and submit timesheets as and when required.
You’ll likely find that staff management is a lot more efficient if you do start to use Xero software. For example, you can take advantage of flexible pay calendars to choose how often people are paid, pay staff members different pay rates based on the work they do each pay period, work out statutory pay calculations, track and manage entitlements for leave, carry out easy pensions filing, reimbursement of expenses and submit your payroll data directly from Xero to HMRC.
If you have lots of projects coming up and are worried about how you’re going to keep track of them all, you’re sure to find the Xero Projects feature of particular use. You can set up and manage as many projects as you like, monitoring job costs daily to stay on track, add task estimates and track your budgets easily, track time, turn logged time and costs into invoices, and make your accounting for each project easy with helpful reports.
Another key feature that any busy company owner will be sure to appreciate is the accounting app. These days, business is done here, there and everywhere, and remote working is fast becoming the way to get the job done. With the mobile accounting app, you can run your business from anywhere, able to send invoices, approve expenses, input receipts and reconcile your bank transactions at any time.
It’s also worth noting, particularly now that GDPR has been rolled out and you need to make sure that all sensitive data is properly protected, that Xero offers you multiple layers of security and runs daily online backups of your business information. Everything is encrypted and stored in several locations online so you know it’s safe, secure and available whenever you need it.
No one will be able to access your data unless you invite them into your account and you’re also able to control what people can see and do in Xero. There’s two-step authentication that will help to protect your account, with a unique code generated each time you log in. This makes it much harder for anyone to try and hack into your account.
How Xero can benefit different sectors
Xero is what you make of it and different companies in different sectors will each take a different approach, based on the individual needs of their business.
Those working in the retail industry, for example, will find that they’re better able to streamline their company with integrations for point of sale, inventory management, shipping and payments, and so on. Some of the top features that retail brands love about Xero include the ability to connect with leading apps for point of sale, inventory, ecommerce and more.
Startups, meanwhile, will benefit because Xero helps companies keep their finances properly on track, so there’s more time available to work on innovation and building those all-important relationships. There’s no denying that starting a new business is a big challenge, but Xero can help with all those administrative tasks so you’re able to focus on other areas.
And construction companies may well find that they’re able to transform their business operations by letting Xero work out Construction Industry Scheme deductions, with monthly returns filed directly from your account. It can also be synced seamlessly with third-party apps for project management, time tracking and inventory management, while you’re also able to invoice clients and pay your subcontractors faster thanks to online invoicing.
As a New Zealand-based public software company, Xero is big news over in that part of the world – and it looks set to become just as popular (if not more so!) in the UK as well, with the launch of its very first TV ad broadcast in this country.
The ad will be running for the next three months so keep an eye out for it coming to a small screen near you soon, showing a closeup of a car tyre being changed. As the camera pans out, the shot reveals that the car is being driven on two wheels, a metaphor for the many ways that small businesses often find themselves doing tasks the hard way… something that Xero wants to help with.
Creative director of the ad Rob Drake of Brave Spark said: “The magic of being a small business owner is that they’re often figuring things out on the move. They’re building the plane as it hurtles down the runway, or in this case changing the tyre as it speeds towards the horizon, whilst juggling the practicalities of managing a business, such as the finances.
“And that’s what Xero is selling… not just accounting software, but that bit of extra time every business owner needs.”
How to get started with Xero
As with anything, Xero may take a bit of time to get used to but it’s really worth sitting down and putting the effort in as it’ll make a huge difference to your business operations in the long run.
Start off by watching some of the instructional videos on the Xero website so you can get a feel for the software and the platforms start to look familiar. Then you’ll need to set up your bank account feeds. If moving away from different accounting software, import your chart of accounts into Xero.
You’ll also need to set up your financial settings so you know you have the right year-end for all your reports, as well as inputting your VAT details including your VAT scheme, number and period.
Add your payment services (such as Stripe, PayPal and GoCardless) so you can take advantage of the Pay Now button that can be added to invoices. And don’t forget to set up payment reminders to help you organise your credit control systems so you can be paid more efficiently in the future.
If you’d like any further help or advice, get in touch with Fusion Accountants today. They have more than 30 years’ experience in this sector, with offices across London. They provide a full range of accounting, tax and business advisory services to small to medium-sized enterprises, so no matter what your individual needs are they can help grow your business today.