Two things we love about Xero

You only get one chance to make a first impression. Xero’s been making a few nice moves.

We started our new financial year in a bit of a flurry. Our focus was on getting WorkflowMax bedded down so that we could continue managing jobs, capturing time and invoicing. It’s been a bit of a rollercoaster ride so far as we adjust to new functionality and a different way of thinking.

But we’ve also been dipping our toes into the Xero pool. There are functions in Xero that do more than simply help you to get the job done. They transform the way you operate. Here’s couple of them


A typical payroll run prior to Xero.

The payroll functionality is simply fantastic. We pay our team weekly, and our payroll person has said that even after only a few weeks of use, our payroll run is taking her less than half the time that it used to. That’s a massive productivity gain when you’re doing 52 pay runs a year!

It needs a few more reports (there’s nothing for deductions, for example), but overall there are features in the payroll component that leave you wondering how you ever managed beforehand! The employee portal is a great example of this. Employees can log in and see a summary of their leave, apply for leave and also view and print payslips (for those times where, say, they are preparing a finance application).

And the ability of the full version of Xero to pay your superannuation to all the various employee funds for you is an incredible time saver. This feature is only available in the top  version of Xero for clients, but is provided free in the practice ledger (i.e. for our own payroll). Even if we had to pay for it though, it would be worth the premium for the time it saves alone (but don’t get any ideas Xero – we prefer – and are extremely grateful – for having it included at no charge). It’s really like the government’s Small Business Superannuation Clearing House, but all the information is already there. No further input required.

Bank feeds

The bank feeds work brilliantly on so many levels. For the practice, our admin team have said that because so many things are reconciled for them, the time saving per month in data entry and report preparation is huge. Specifically, one comment was “Once you get a few months into using it, I should say you would just be mostly checking what Xero suggests and only entering details for one off type transactions. Will make thing a lot quicker.”

Our practice accountant (i.e. the person responsible for our internal accounting) said “..once I’d set up the bank rules, it only took me an hour to enter data for a 6 month period, which previously would have taken me about 3 hours.”

Naturally this also has fantastic implications for client work. It’s worth noting that bank feeds are not available on our basic ledgers – the ones we would use independently of the client and to which the client has no access (except to view some reports). Of course we pay a significantly reduced rate for those. They’re basically replacements for our practice general ledger software. So at a minimum the client needs to be on one of the retail packages, but there is a raft of options there and in particular some extra ones for Xero practice partners. In my opinion though the additional cost for a retail ledger (either charged to the client or absorbed by the practice) would pay for itself in terms of the savings it will deliver in total bookkeeping and accounting fees. Aside from the benefits of having much of the inputting automated, at the end of the year, with some involvement by the accountant, the ledger is basically complete. And you know the data integrity is going to be pretty good because you’ve been involved in keeping it that way. This opens up a world of possibilities for collaborative service delivery.

This isn’t the sum total of all that is good in Xero, but I wanted to provide some detail on a couple of things rather than sweep over a whole bunch of them. Generally Xero is extremely easy to use and very intuitive.

But it’s features like this that encourage us to remember why we’re in this. I’ve talked about how this isn’t simply a matter of replacing our old software, and how it is instead a paradigm shift in the mindset for operating a practice. This is where the rubber of that choice hits the road. In a future post I’ll discuss some of the functions Xero really needs to truly be practice ready. Sure, the ‘Avant-garde’ will look down their noses at that and tell us to get with the times. But we think there are just some realities of running a practice that have to be faced, and we’re pretty sure the next wave of more conservative practices (like us!) will agree.

But having said all of that, these features make us happy to make the compromise, Why? Because the goal is to provide better client service. Sure, if it’s a disaster internally then the costs outweigh the benefits. But what we’re seeing is massive savings on internal management like our own payroll and reporting, and features on the client side that quite simply will revolutionise our relationship with them.

Artist’s impression of ideal client meeting.

So what system doesn’t have compromises? The better question is where should you be making compromises? Ultimately, we don’t want to run a practice. That’s not the end game – it’s a necessary function of what we’re really here to do. We want to serve our clients in a way that compels them to love us! Not because we’re nice people or narcissists who need to be liked, but rather because happy clients are good for business – theirs and ours. And that’s the mindset shift in a nutshell. Should you compromise your product to operate a system that your accountants feel ‘safe’ with, or change your internal procedures to deliver the best result possible for your clients? Once you start thinking that way, it’s a no-brainer.


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