A Practical Guide to Automating Your Accountancy with Xero

Let's be honest, no one starts a business and thinks, "Great, I'll get to do more accountancy." Bookkeeping, filing accounts, taxes, VAT, and all the nuts and bolts may not be any fun at all, but they are a necessary chore that can't be avoided. Thankfully, automated accountancy can be quite simple to achieve if you know the ropes, and typically at a very low cost too.

Step one: Get a modern accountant.

This may sound harsh, but if your accountant is still asking for bundles of paper receipts, lots of spreadsheets, talking about legacy software like Sage Line 50 or Mind Your Own Business, it might be time to move on. Your accountant will heavily influence the efficiency and ultimately the profitability of your business, and if they are stuck in the dark ages, you can be sure you will be too, to some degree.

Step two: Get a cloud-based accountancy package.

For us, Xero is peerless and has empowered small business owners to have greater visibility and control of the accounts functions of their businesses than ever before. If you’ve never grasped what a P&L (profit and loss statement), balance sheet, or cash flow statement is, Xero will allow you to run all of these reports yourself, helping you to better understand the fundamentals of your business in great detail. And best of all, Xero can 'talk' to other software, allowing your Point of Sale system, payments system, and e-commerce platforms to automatically post their data directly into your accounts. If the lifespan of your business is 20 years, just imagine the time saved and manual errors eliminated by this functionality alone!

Step three: Get a modern point of sale, payments, and e-commerce platform.

There are many reasons to invest in an all-in-one solution to handle your sales, payments, and online ordering, but paramount among them is the efficiency of having a single platform that integrates fully with your accountancy platform and posts all of your sales data. In the case of AirPOS, we bring together your in-store or on-the-move sales, whether they are cash or card, via our Point of Sale platform fully integrated with our AirPOS Pay card terminals powered by Stripe. On top of this, we have a full Shopify integration that allows you to sell online through Shopify, directly from our platform. And we bring all of this crucial sales data together, work out the taxation and VAT, and send it all directly to Xero for reconciliation. And it's all Making Tax Digital friendly too!

As your business grows into multiple locations or selling at trade events, conventions, or online, this system will expand with you also, future-proofing your operations and making it a breeze to make more profit at manageable costs.

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RED FLAGS! Look out for providers who need you to sign a contract; that’s a license to give you poor support, change the pricing, and all sorts of other less than friendly things, and the point of sale industry is rife with this. Also, beware the 'race to the bottom' among payment providers. You might get a 'cheap' card acceptance solution, but its limitations in terms of integrating with a POS, integrating with your accounts, helping you to sell online, and more will cost you much more down the road. Demand much more for a percentage of your payments, a POS, payments, and e-commerce solution at a minimum!

Step four: Automate your receipts and expenses

Xero is not just an accountancy platform; it can also handle your receipts and expenses too, saving you a HUGE amount of time and making sure you never lose receipts again (we all do!). Use Hubdoc, Xero’s own solution, to automatically scan and post your receipts to Xero with your smartphone or a third-party solution such as Dext. These excellent solutions scan your paper receipt, extract the pertinent information, and post it directly to your accounts, splitting out things like VAT so you don’t have to.

Similarly, Xero also has an app for scanning your expense receipts and posting them directly into Xero as expenses. Another huge time saver.

So, end-to-end accountancy automation, and did we mention that the price for all of the above is typically less than £200 per month, and that includes all your card fees? Contact us to find out more.

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