One of the most important ingredients to a healthy business is accurate accounting. Without this, businesses would struggle to chase their accounts payables, pay their employees or file accurate taxes. But getting it right can be tedious if one is sticking to manual spreadsheets and outdated software.
Xero accounting software is one of the most popular options to keep the finances of your small business under control. With more than 2.75 million active subscribers, Xero is at the forefront of the accounting software industry.
In this article, we’ll discuss six ways Xero can help your small-to-medium-sized business become more efficient at handling financials.
So What is Xero?
Xero is an accounting software that can cover most of your accounting needs regardless of the shape or type of your business. It can help you to manage your cash flow, build financial reports, track your income and expenses, manage your payroll, or even track your inventory.
Xero is a user-focused software that can be customised to your specific needs with no IT skills needed. With its many add-ons and features, business leaders can better understand their companies’ financial health.
But what are the exact benefits of this accounting software for SMEs?
1. Raise Your Productivity
With Xero, you can automate time-consuming processes with ease, saving you valuable time to focus on the rest of your business. This is especially important for small businesses where human resources are hard to come by, and time is one of the most important currencies.
One of the many handy features is handling bank reconciliations at speed, resolving any developing problems quickly and efficiently securing your cash flow. With Xero’s built-in tool, companies can review and match transactions easily, setting up filters and rules to maximise efficiency.
But bank reconciliation is not the only process that can be automated. Business leaders can automate online invoicing, payment methods, and banking feeds.
2. Monitor Your Business Anytime Anywhere
When you run a successful business, you want to monitor your business numbers as much as possible. If your company activity (or your personal commitments) requires you to be on the road frequently, this can often be difficult and frustrating, resulting in having to chase employees.
Xero enables you to access your financial data from anywhere, allowing you to manage basic business functions such as invoicing or payroll on the go. Accounting software allows businesses to access their platform from various devices, including desktops and mobile platforms, providing a flexible experience.
As 58% of SMEs have already shifted to cloud-based accounting, it is clearly not a trend where you want to be left behind.
3. Keep on Top of Your Taxes
Company tax is one of those topics that most business owners would like to avoid if possible due to its complexity and time-consuming nature. Unfortunately, tax obligations are not something we can avoid at all costs, especially as two-thirds of UK-based small businesses struggle to pay their tax liabilities every year. But Xero is here to help!
Xero can keep you in the loop with the latest tax laws and streamline your tax filing, creating a relatively pain-free experience. The software can ensure that companies pay the right amount of tax and keep on top of their finances.
Digital tax returns can eliminate the normally paper-heavy process. In addition to this, if you operate in the UK, digital tax returns are now mandatory for all VAT-registered small businesses through the Making Tax Digital initiative.
4. Secure Your Financial Data
Xero, like most secure accounting software, has a complex encryption system embedded within its platform. This can give peace of mind to business owners, making sure that their financial data is safe from potential attacks.
Due to its market leader status, Xero is compliant with the latest security regulations, constantly monitoring its systems to ensure continuous security features. The software allows business leaders to control who can see their financial data, providing permission layers that can easily be revoked at the tip of a finger.
Xero’s cloud-based platform also helps to ensure that your financial data will not be exposed to unexpected data loss or human error. Their security system removes the reliance on one data source, creating a regularly maintained history of financial data.
5. Adjust The Software to Your Needs
One of the greatest features of Xero is its endless flexibility. With its tailored add-ons and a variety of plans and services, you can truly mould the software to your business’s needs and ambitions. This helps business leaders adjust their plans and features to their scaling business, regardless of whether they operate in e-commerce, technology, manufacturing, or farming!
Xero’s marketplace will provide access to over 800 add-ons for full customisation, allowing you to select features that would benefit your SME the most. You can automate some elements of your accounting function or all if you prefer – it’s all in your control.
6. Track Your Sales and Manage Your Inventory
Another essential feature of Xero is its ability to track sales through integrations with many online marketplaces such as Square and Shopify. Xero will also allow you to create purchase orders within the system, sending them directly to your suppliers, removing unnecessary extra steps in your process.
Through a number of add-ons, the software can help businesses manage their inventory by linking to other inventory tracking software, making sure that you never get caught short on products. As stock shortages and supplier issues continue to cause disruptions, it is increasingly important for small and medium-sized businesses to ensure they don’t miss out on potential customers.
With its in-depth financial data management platform, business leaders are able to track their sales numbers easily, identifying what products are bringing the most revenue.
Conclusion
Finding the right solutions suiting your business needs can be a complicated procedure but one that definitely will prove its value. If you feel like you are getting lost in the labyrinth of add-ons and plans, we at Sanay can help you to find the right solution that fits your organisation.
For more information on the accounting services we can provide for your business, reach out to us.
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