BHP’s Top 5 Tips for Xero

BHP’s Top 5 Tips for Xero:

Xero is becoming more widely used by our clients, particularly since the pandemic. With the next phase of the government’s Making Tax Digital plan fast approaching, it is important business owners are moving their finance function onto MTD compliant software, such as Xero.

Not only that, Xero is a tool designed for small and medium-sized businesses to help with the day to day running of a business. It goes beyond an accounting package with its many features and can be an essential tool in helping business owners to run and grow their business and obtain key business insights.

Here are our top 5 tips for getting the most out of Xero:

  1. Bank feeds & bank rules
    Bank feeds automatically import transactions from your bank or financial institution directly into your Xero organisation. Once these bank feeds are imported, these can be quickly reconciled to provide an up-to-date view of the business financials and cash position. Reconciling your bank feed is a quick, simple task, however, setting up bank rules can make this process even more efficient and is a great time-saving hack for undoubtedly busy finance teams. Bank rules save you manually creating a new transaction each time you get a recurring or similar type of bank statement line. You tell Xero how these statement lines should be coded so that it can suggest the correct type of transaction and complete some of the details for you. Next time a transaction with a bank rule is imported via the bank feed, Xero will check its details to see if it meets the conditions of any of your bank rules and assign the transaction correctly. This saves time, helps to reduce human error and ensures consistent coding,  leading to more efficient reporting.
  1. Cash coding
    Cash coding in Xero is a fast and easy way to reconcile multiple statement lines relating to cash transactions in one go. The statement lines are displayed in a spreadsheet format, so it’s easy to sort and code similar transactions with the ability to view up to 200 lines at once that you can work through one by one or select multiple lines of a similar transaction to reconcile at one time. This is a great tool for increasing efficiency and ensuring your financials stay up to date so you can make those essential business decisions with the right knowledge.
  1. Tracking categories
    Xero tracking categories are designed to see how different areas of your business are performing (such as departments, cost centres or locations). Businesses should utilise Xero tracking categories to ensure that business information is appropriately segmented to provide management information that is informative and actionable.This is a really useful tool in Xero that helps to provide valuable business and informative insights into your businesses performance so that you can make informed business decisions and monitor growth.
  2. The app marketplace
    Xero’s app marketplace boasts over 700 third party software applications that integrate with Xero. The app marketplace is what makes Xero so much more than just an accounting package and transforms it into a tool that helps you run and grow your business.Xero’s app marketplace is designed to offer business owners apps that help solve problems or perform business tasks so your staff can concentrate on other areas of the business.An example of our favourite apps at BHP are:
    – Dext Prepare – for invoice automation and receipt processing
    – Expensify – to simplify the expense management process
    – Chaser – automation of credit control procedures
    – ApprovalMax – for invoice approval automation
    – Float – for short-term cashflow forecasting
    – Fathom – automates reporting with key financials and business insights
  1. Reporting ability
    It is essential for any business to have access to up-to-date financials that are understandable and insightful. This helps business owners monitor growth, identify opportunities, and make decisions.Using Xero and the four tips above help business owners and their teams stay on top of the figures and mean that decisions can be made in real-time.Whether businesses choose to use the reports that are instantly available in Xero or leverage the app marketplace to plug in an application like Fathom insightful reports, that monitor vital KPI’s are available at the touch of a button to Xero users. At BHP, we believe business owners should be able to concentrate on growing their business, and a tool like Xero takes the pain of the numbers away!

If you would like to hear more about BHP and how our Digital Finance Team can support you and your business, please get in touch.