Headquartered in New Zealand, Xero is a cloud-based accounting
solution tailored to the needs of small to mid-size businesses. Its
features include account management, billing, invoices, expense
reporting, and payroll. Xero also integrates with over 200 other
applications which facilitate nearly all aspects of business operation,
including inventory management, CRM, and POS.
Ease of Use:
Xero’s interface is clean, well-organized, and easy to navigate.
Setup - When you first sign up for an account, you’ll be
prompted to set up your company through a series of fairly
self-explanatory screens, each with its own easily accessible help
section. There are also a series of “Getting Started” videos which,
while some are slightly out of date, provide good, concise advice as to
setting up your business with Xero. You have the option to save and quit
at any point during setup.
Organization – Once set up, navigating is a pleasure. The
dashboard offers a quick overview of accounts, and it is easy to see
items that need attention (overdue bills, for instance) at a glance. In
addition to the dashboard, there are tabs for Accounts, Payroll,
Reports, Adviser, Contacts, and Settings. Each provides access to a
variety of drop-down options, and they’re organized pretty intuitively.
Usually, things are found on the first place you thought to look.
Instructions and Guidance – Xero provides a “Getting Started”
text box at the top of some pages which provides handy tips; it’s
easily hidden once you’ve mastered the content. How much you need to
read instructions in order to use the software will likely depend upon
your accounting knowledge and the complexity of the tasks you are
attempting.
Problems – Xero is very clean software. There are a few minor annoyances, as follows:
Lack of Time Tracking for Contractors – I am very glad to see
a time-sheet function for employees under Xero’s new payroll function …
but a bit surprised that the software doesn’t provide time-sheets for
1099 contractors.
Poor Inventory Support – While Xero says you can use add-ons
for inventory, a quick glance at their forums gives you the impression,
most of these don’t work well. Xero plans to offer improved inventory
management this year; whether that will solve the problem remains to be
seen.
CSV Imports – In the banking reconciliation, duplicate
detection does not function across formats, so if you import a csv and
later import a qif with overlapping dates, you will end up with
duplicate entries. Also, depending on your bank, you may need to make
significant adjustments to csv files before they will import correctly
(Xero can’t import a bank statement csv with separate debit and credit
columns).
Lack of Automated Features – Xero does not offer automated
invoice reminders, overdue notices, or receipts upon payment. While it’s
a minor point, it seems an odd omission for software which has such a
great feature selection.
Do you know how your business is performing when stacked up against
competitors? Where you could improve, what you are doing well and what
you could do to steer your ship in the right direction?
The good news is, there’s no need for guesswork. Benchmarking can answer these questions for you.
Here are our top five reasons why your business must benchmark:
Benchmarking
allows you to dive in deep to find out why top performers in your
industry are so successful. You’ll be able to analyse the key behaviours
and ingredients for success, so that you can emulate them.
Benchmarking
enables you to identify the strengths and weaknesses in your own
business. Without this insight, you could be travelling blind and making
business decisions without the right information.
Benchmarking
provides objectivity, so that you can take an objective view of your
business. It’s difficult to do this otherwise – you may be just too
close and emotionally invested in your business so making it difficult
to stand back and be unbiased. The most successful businesses take off
the rose-tinted spectacles and make realistic assessments about their
performance.
Benchmarking empowers you to understand
personnel productivity in detail, and subsequently, set reasonable
expectations for staff productivity. There’s no benefit in setting
expectations that simply can’t be met by humans. Likewise, it’s foolish
to set expectations that are too low to drive real value in your
business. Comparing your staff productivity to more successful players
will help you identify your productivity gaps.
Benchmarking
can also help you assess performance in the area of finance. A wide
range of expenditure questions can be answered to help you make strong
conclusions – on anything from average industry salaries, to the cost of
office supplies.
Like any management activity
that’s worth doing, benchmarking takes a little effort. But outside help
is available. If done right, benchmarking holds the key to future
prosperity, for you and your business.
We, while working at Connect Accounting,
have put up some tips for the end of financial year. We hope you will
find them helpful. Tax can be a simple or difficult task depending upon
the knowledge and experience of the accountants. For making it a simple
job, the accountant must have up to date knowledge of tax laws. These
tips may prove useful while getting your paperwork together.
Bad Debts In
order for a bad debt to be truly “bad”, there must be no reasonable
expectation of recovery. There must also be evidence that a bad debt has
been written off. Normally this would involve a paper trail between you
and the customer or potentially an action in the Disputes Tribunal.
In
order to claim a bad debt, it must be written off during this year in
order to claim the deduction. We can do this for you when preparing your
financial statements.
Inventory
You
are entitled to write off obsolete stock. In order to reduce the value
of items in stock, they should be disposed of physically or
alternatively valued at their market selling value which will presumably
be lower than cost.
Repairs and Maintenance
If
you have repairs and maintenance that need to be done, it may be
worthwhile to do these in March so that you get the benefit of a full
deduction.
Home Office Expenses
A
proportion of your mortgage interest, residential telephone, insurance
and rates can be deductible. There is a common misconception that this
amounts to a flat 25%. This is not the case. In the case of an IRD
audit, the department would want to see evidence as to how the portion
deducted was determined. Our advice is to get a sketch together of your
home with floor areas and work our how much is actually dedicated to
business use. Contact us for more information if you are unsure.
Donations
Most
clients are aware that their personal donations are tax deductible but
your business donations may be as well. So long as the company records a
profit, you may claim any donation up to that net income figure.
Scrapping unused assets
You
may write-off an asset that you are currently depreciating when the
costs of disposing of it are greater than any expected proceeds from the
sale.
Prepaid Expenses
You can claim the full amount of some “prepayments” regardless of the amount or period being prepaid. Items include:
Stationery
Subscriptions for journals
Road user charges & vehicle registrations
Postage and courier charges
Rates
Audit & accounting fees
Other
expenses such as travel, rent, consumables, advertising and insurance
have either dollar or time limitations so please contact us for more
information.
Entertainment expenses
Most
entertainment will qualify for a 50% deduction. There are a whole host
of rules that apply so if you are uncertain, give us a call.
Vehicle expenses
There
are a number of ways of claiming the business portion of vehicle
expenses against the business. These include a mileage rate, using a
logbook, actual mileage and transferring the ownership of the vehicle
into the business name.
