Why you should have Xero in your business

It’s so important to have an accounting system in your business. It doesn't matter how small you are or how big you are, everything is made easier by having an accounting system.

I am Xero certified because I love it, and I highly recommend Xero. I find QuickBooks really clunky, so if you're choosing between QuickBooks and Xero, I'd say Xero every time.

Why do I need an accounting system?

Having an accounting system will save you lots of time in the long run. It will also save you time in the short term by having all your invoices sent from the system, help you collect money via GoCardless and seamlessly match it all. Plus If you have an accounting system like Xero, you can connect up your bank, Stripe and PayPal. This makes it very easy to keep track of your numbers, because every business needs to know what their numbers are.

You can also take photos of your receipts when you are out and about (when that can happen again!) and then all receipts and invoices are in one place – you don’t have to keep paper copies of things any more.

If you leave it a long time to get set up, the set up costs can be huge, transferring everything from the bank account and putting the history in.

Saves time & money

Xero is only £28 per month and I think this is a great investment for your business. It’s pretty easy to use once you have it set up – I have several clients who do their own books once I set them up.

This will save you money in the long run as your accounts and tax return information will be complete for your business, and you will know in real time where things are with your business.

Outsource easily

You will be able to outsource your accounts more easily if they are in some sort of order. Getting a bookkeeper can also be as little as £50 per month and I recommend you have this high on your outsourcing list of you want to make this part of your business run smoothly.

For lots of people, this is one of the biggest pain points in their business, so if this is you, recognise this and outsource when you can.

Do I need it if I’m a sole trader?

As a sole trader, I think it is still really important to have an accounting system. It really helps to keep things in order and makes your tax return much easier.

Being VAT registered

If you are getting close to the VAT threshold, having an accounting system is a must. VAT returns will soon all have to be submitted online via Making Tax Digital and Xero connects to this automatically.

I’m not a fan of VAT returns, but this has made them much easier to reconcile and submit.

And don’t let being VAT registered keep your business small.

Know your numbers

From a numbers point of view, having an accounting system means you can get real time information in your business. Who owes you what, what do you owe, but also, what makes you the most money (see last week’s post about what products and services make you money).

It makes it easy to see what is making money and what isn’t. And looking at your numbers is a good thing, as you can make changes and look at how you are doing all the time.

Further help

If you need help setting up Xero, I offer this service from £250 depending on the complexity of your business. I also offer a guide to setting up Xero if you want to do it yourself (£47) which you get free if I set up your Xero for you. I also get discounts on Xero for the first 3 months.

Click here to book a chat with me.