Most people who use accounting software know it best for sending invoices. Admittedly a very fancy and clever way of sending invoices, but that’s still the primary use a lot of businesses have for things like Xero. But here’s the thing, invoicing is honestly one of the smallest jobs Xero does. Right underneath that ‘create invoice’ button is a whole toolkit quietly getting on with the rest of your business admin, whether you’ve noticed it or not. So let’s take a look at what else is in there! And don’t worry, you don’t need a finance degree to understand it.
The Bank Feed
Once you connect your bank feed to Xero, it does the work of reconciliation for you. You don’t need to download statements, manually go through and match transactions, and spend hours making sure everything adds up. Xero can automatically match up transactions with invoices or payments, so all you have to do is click ‘yes’. After a while it even learns what you usually categorise things as, bringing reconciliation from an hours long dredge to a 2-minute job. It’s the closest you’ll ever get to admin doing itself.
Reporting on Your Progress
A lot of business owners know vaguely if they’re doing well, struggling or just ‘ok’. But not many can be certain about exactly how well their business is actually doing. Using Xero you can run a huge range of reports, from a profit and loss, a balance sheet or a cash summary, and turn that feeling into hard facts. Using those reports you can see at a glance whether last month was good, or just felt good, or spot patterns before they have a chance to become problems. In fact, the dashboard you get the moment you log in gives you a real-time snapshot – what’s owed to you, what you owe, and what’s sitting in the bank.
Receipt Management
Do you have piles of receipts shoved into a drawer, a bag or even the glovebox of the van? Not anymore! Xero (paired with apps like Dext or Apron) lets you snap a photo of a receipt. Then it pulls out the date, amount and supplier for you. It gets filed and matched to the right transaction, and the paper can go in the recycling. No more digging through a shoebox in January wondering what a transaction for £14.99 last May was for.
Payroll
If you employ staff, then Xero can run your payroll too! Everything from calculating pay, tax and pension contributions and submitting the right information to HMRC automatically. It even keeps digital payslips and records in one place, without the need for lots of extra pieces of software in the middle. And if you need to go back and find a payslip from another time? It’s never been easier. I generally recommend this for up to 5 employees, but as you grow you may need to look into more dedicated systems.
VAT Returns
VAT is always tricky, and with changes on the horizon it’s not going to get any easier. But Xero calculates your VAT as you go, rather than leaving you to add all of it up in a panic the week the return is due. When it’s time to submit, you can send your return straight to HMRC through Xero, which is now a requirement under Making Tax Digital. So if your VAT return fills you with dread, Xero changes all of that.
Asset Tracking
You probably buy things for your business all the time. Consumables will come and go, but something big, like a laptop, a van or some equipment? A proper record needs to be kept of it. Luckily, Xero keeps a fixed asset register, which records what you own, what it’s worth, and works out the depreciation for you each year. It’s one of those things you don’t think about until you need the figures for your accountant, and instead of scrambling to figure it all out it’s just there, waiting patiently.
Juggling Multiple Currencies
Working with clients or suppliers abroad? The comprehensive version of the Xero subscription can handle not just 1 or 2, but multiple different currencies. It will convert everything at the right exchange rate, and keep your accounts accurate. Much easier than having to do the maths yourself, or research what the exchange rates were on each transaction date.
Connectivity
Xero isn’t just a great tool on its own, it also plays nicely with others. Through Xero’s marketplace it can connect with a huge range of other bits of software, tools and useful apps. Everything from stock and time tracking, expenses, CRM, it can all be integrated with Xero. So instead of juggling 5 different systems that don’t talk to each other, it all feeds back into one place, giving you a better view of your business with far fewer mistakes.
So, while invoicing might be the front door of Xero, there’s a whole house behind it, all waiting for you. Bank reconciliation, reporting, payroll, plus dozens of other jobs are quietly getting on with things, and once you know they’re there, they can take a huge chunk of admin off your plate. If some of that sounds good, I’d love to help you get started. Just get in touch with me at Bluebell Bookkeeping and Admin, and let’s get your books sorted.