All my bookkeeping clients (except one, who uses the software they resell) are now using Xero. The actual time I spend bookkeeping for them is reduced due to two reasons; the client enters much of the information I would have done on another system and the actual bookkeeping I do takes less time on Xero than on another system.

The minimum I do for any client is check through the VAT reconciliation to make sure all the transactions have been coded to the correct expense code and VAT code.

The client is very happy with Xero because they now have a much better idea of the financial standing of their business than they have ever had. The amount of time they spend on Xero more than pays for itself in their new knowledge about their business. I would go as far as to say, a couple of my clients have prevented their business from closing due to their new understanding of the finances and management of cash flow.

I am very happy with Xero because it means I am no longer seen as a data entry clerk. My bookkeeping qualifications and experience are valued by the client. They ask for my advice. I now work with them, and their accountant, in growing their business. It makes my work much more interesting and enjoyable.

It also means I am able to offer other services. As Xero becomes more well known, I am continually contacted to help companies convert from their current accounting system onto Xero, then to train them (and often their bookkeeper) to use it in the most useful and efficient way for their particular business.

The usual scenario is that I am contacted by a frustrated business owner who doesn’t understand their current accounting software and has to rely on information from their accountant for any financial information about their business. They want current information, which most accountants (unless they are using a system like Xero) cannot offer. The business owner has usually found out about Xero through research, which has then lead them to me.

Xero has transformed my business for the better. I love training. I love it when people I am training begin to understand how Xero is going to transform their own business. My bookkeeping skills and experience are still very valid but I now have new skills too.

Luckily, like all my clients, the accounts were on Xero, all the “paperwork” was in dropbox and their office is only 10mins drive from my home. Within half an hour I was back up and running on my very old laptop. All I had to do was download dropbox and the working day continued.

This incident did make me very relieved that I now work with an online accounting system. If I’d been using a desktop system I would have been unable to continue working.

Even though I use Outlook for email I could still receive incoming mail through my phone and as I forward all relevant client emails to CapsuleCRM, another online system, I still had everything I could possibly need to hand.

My new adaptor arrived the following day. It was good feeling getting back onto my usual laptop but it was even better knowing I hadn’t lost a day of work.

This means that Totally for Business will be focusing almost exclusively on conversion & set up, training and support rather than bookkeeping.

Conversion and set up is migrating accounts from a previous system onto Xero. The most convenient time to do this is at the end of a financial year or a VAT quarter but it is perfectly possible to carry out at any point. For a smooth transition, a cut off date is decided, then the chart of accounts, account balances, unpaid purchase and sales invoices and contacts are uploaded into Xero.

Training to use Xero efficiently is carried out via webinar or onsite (if local to Manchester/Stockport). Although I do train a client and his staff via speaker phone at present, as this is what they prefer! Training via webinar involves the trainees clicking on a link (emailed by me) at an agreed time. All participants can hear me and see my screen. I can hear everybody so questions can be asked. If necessary, I can swap over to see the screen of an attendee. It is very similar to onsite training but has the advantage of being possible anywhere there is an internet connection. I have found it works extremely well.

Follow up support is generally carried out by email or telephone. If screen sharing is necessary, skype or an instant webinar can be used.

I’m really looking forward to growing the training side of Totally4 Business. If anybody would like to chat to me about my new venture, please leave a comment, phone 0161 485 6120 or email info@totally4business.co.uk

When creating an accounts payable invoice, a scanned copy of the original invoice can be attached. If your suppliers mostly send you pdf invoices via email this is even easier, you save a copy and then attach it to the transaction. The original invoice can then be quickly and easily viewed by anybody who has permission to do so. No more searching through a lever arch file of paper invoices, a shared folder on the server or in dropbox. Simply click on the attachment.

This can be especially useful for your bookkeeper or accountant who can conveniently view the original paperwork to make sure the transaction has been allocated to the appropriate account and the VAT is correctly recorded. This is a big step towards the end of envelopes of purchase invoices and receipts being sent between clients and bookkeeper/accounts, saving an immense amount of time on administration.

I blogged about the ability to be able to attach photos of receipts to expense claims as soon as Xero Touch is available as an iPhone app. The same now applies to expense claims in your main Xero account. Electronic copies can be attached to expense claims for easy approval. No more printing out the claim and attaching the receipts. No more lost receipts. Quick and easy approval.

Anything that improves being swamped with paperwork, makes life simpler and saves time, for myself and my clients, has a big stamp of approval from me. Xero continually works towards providing these things for it’s users and I look forward to every new release.

If you have bank feeds set up into your Xero account, the balances will be the correct up-to-date balance. At the moment, reconciliation from the app is not possible but that will be available in the future, just in case you have a few spare moments whilst away from your computer!

I’ve had many frustrating times when I am running late to meet a client, jumped in the car, started to set up the SatNav & then realised I don’t remember their address. As I keep all my client details in the cloud, sometimes I have had to get my laptop out, with the mobile dongle and wait for it all to load before I can find my destination. Now I can find them in Xero Touch very quickly and be on my way.

I can also make notes about our meeting in Xero Touch, against the client, for when I get back to the office.

Lastly, I can use Xero Touch to see which of my sales invoices are overdue. Carrying out that often forgotten, but very important, task of making sure I receive payment as soon as possible whenever I have the opportunity. For example, on the train, waiting for a late client or during unexpected available time between back to back meetings.

This is the first release of Xero Touch, it is already a very useful tool. I am looking forward to further functionality in future releases.

This is now possible on Xero Touch, m.xero.com, the newly released mobile app.

As soon as you have finished working, you can create an invoice within Xero, from your phone, adding in the details. This can then be saved as a draft, ready for future sales to be added or approved and emailed to the client straight away.

Sending a client an invoice on the day the work was completed reduces the amount of time until you get paid, improving cash flow.

No more getting to the end of the month before batch invoicing all your customers in one go. No more forgetting exactly what work was carried out and for how many hours. By being able to invoice immediately, the details will be correct and the client  won’t be querying the invoice over a month later, delaying payment even more.

The final part of this blog, Xero Touch – Balances, Contacts & Credit Control, will be published tomorrow

Xero have been working on this very problem with their newly released Xero Touch m.xero.com.

As soon as that train ticket has been purchased, you can enter the details into Xero via your mobile phone and forget about it. At the moment, you will still need to keep the ticket safe and file it on your return to the office.

BUT…if you have an iPhone, once Xero Touch has been submitted to the App Store, you can take a photo of the receipt to upload into Xero. You will always have a copy of the receipt. No more hunting down bits of paper or trying to remember what a purchase was for. No more monthly expense claim headaches. All the receipts will have been recorded in Xero as the purchases were made. At the end of the month, your expense claim can be submitted within a few seconds, ready for approval and reimbursement.

Part two of this blog, Xero Touch – Invoicing on the Move, will be published tomorrow.

By allowing some or all of your customers to buy on credit (issuing an invoice when they purchase a product or service which is to be paid several weeks later), you are putting a large amount of trust in the unknown. It is advisable to run a credit check on new customers before allowing them to buy on credit. This service is offered by many companies (search on the internet or ask for recommendations). The fees involved can save large amounts of time and money in the future.

The first stage to getting paid on time is to let your customers know your terms of payment before you issue credit and make sure it is stated clearly on your sales invoices. Most companies assume the terms of payment are 30 days unless you let them know otherwise. Another tip to make paying your invoice easy, is to have your bank account details showing clearly for online payments along with details of to whom a cheque should be made payable to and the address of where to send it. For some customers it might be worth including a stamped addressed envelope for cheque payment.

As soon as a sales invoice is issued it should be stored electronically or as paper in a file labelled “Sales Unpaid” (or similar). File the invoices in order of payment due date. At a regular time each week, so that it becomes a habit, set aside time to go through this file. Any overdue invoices should be at the front of the file. It is a good idea to have all your customer contact details at hand before you start. Contact the first customer, preferably by phone.

It is important to remember that you are entitled to be asking for the money. You both entered an agreement. You fulfilled your part by supplying the goods or services and it is time for the customer to fulfil theirs.

When you get through to the correct person, state why you are phoning; an overdue invoice and when it was due for payment. During the conversation make sure you ask when you can expect to receive payment. Make a note on the paper or electronic invoice of the date you phoned, who you spoke to and how and when they are sending the payment. The invoice can now be filed according to the new expected payment date.

Of course it won’t all be plain sailing. If you can’t get through to the person who can issue or authorise payment, make sure you know who you need to speak to and when you can contact them. Again, make notes on the invoice and file according to the day you’ve been told to make contact. Also make a note for yourself in your diary to contact this person, so that it doesn’t get left for another week.

If you find out that you’ve not been paid for a reason; a credit invoice should have been raised for goods returned, the information on the original invoice is not correct, for example, make notes and get these things corrected straight away so that payment isn’t delayed any longer. Do everything you can to get the money into your bank account as soon as possible.

Make keeping your books in order much easier by setting aside a regular time to do all you can to help your customers to pay you when they agreed to.

The key to keeping things simple is to make a habit of filing all paperwork as it is received. Once the post is opened, the financial paperwork should be filed straight away. Purchase invoices received by email, online receipts and statements should either be filed electronically, or printed off and filed manually, as soon as they are received. This also applies to any till receipts accumulated.

Dealing with the paperwork on a daily basis saves hours of time collecting it together and searching for missing documents in the future.

The following is an example of how this can be achieved.

1. Sales Invoices – If you use a computerised accounting system, these will be stored within it (there is no need to print them out). If not, either keep copies filed electronically or manually in a folder marked “Sales Unpaid” and move to “Sales Paid” once payment has been received, noting date and payment details.
2. Other Income (including loans etc) – All relevant paperwork should be kept in a labelled file.
3. Purchase Invoices – All purchase invoices received from suppliers that don’t need to be paid straight away should be filed in “Purchases to be Paid” and then moved to “Purchases Paid” once you’ve paid them, noting date and payment details.
4. Till Receipts/Online payment Receipts – these can be filed straight into “Purchases Paid“
5. Travel & other Expenses – If these have been paid from your personal account/cash, keep a plastic wallet for each month so that one expense for the whole month can be entered into your accounts and reclaimed. Encourage staff who claim expenses to do the same.
6. Bank Statements – File these manually or electronically, either subdivide one file for any separate accounts or have a file for each.
7. Owners Drawings/Investments – Keep a record of all the money/goods taken for your personal use as well as any personal money/goods invested in the business.
8. HMRC Correspondence – It is often worth making a file specifically for this so that it can be found easily

Using the above filing system will give you some idea of your cash flow at any given point without even entering the details into your accounts. You can see how much money is due in and due out using the Sales Unpaid and Purchases to be Paid files. You can also carry out credit control using the Sales Unpaid file.

At some point the incomings and outgoings have to be recorded, whether that’s into a notebook, spreadsheets or a computerised system. It would be very efficient to enter the details before they are filed in the correct folders on a daily basis. Weekly can be sufficient. If it’s left to be done monthly (or even longer), the job can become daunting and time consuming as you, or whoever does the bookkeeping, tries to remember what certain transactions were for.

Make keeping your books in order much easier by creating a routine which means only a little is completed at any time but it is carried out often.

Xero (www.xero.com) is an online accounting software designed for small businesses. Being web-based;

• It is available anywhere there is an internet connection
• Anyone with an invite can access an account at any time
• It’s security is modelled on internet banking, thought by many to be safer than using traditional desktop accounting software
• Back ups are carried out securely and automatically
• The monthly fee includes all upgrades and unlimited support and can be cancelled at any time

Xero is designed to be simple and intuitive to use, even to those who are not bookkeeping or accountancy trained.

The following is one way of using Xero to make your bookkeeping manageable:

On a daily basis, online bank statements can be imported into Xero, or directly fed in from the bank. From the bank reconciliation screen invoices can be paid and other transactions created making the bookkeeping very quick and simple.

Sales invoices can be easily created and emailed directly to clients as soon as the work has been completed, keeping the time between completion and payment to a minimum. Schedules can be set up to automatically issue repeating invoices; reducing time spent creating the same invoice over and over again.

On a weekly basis, it is a good idea to check for any overdue sales invoices (marked in red) and call the clients to find out when they intend to pay. Notes can be made against the invoices to keep a record of the correspondence.

Intended payment dates of purchase invoices can be noted against them, creating a payment schedule. This makes calculating what to pay and when an easier task. The schedule can be adjusted if sales invoices aren’t paid when expected.

Monthly management reports, such as the Profit & Loss and the Balance Sheet, can be viewed in real time at any point. At the end of each month looking at the figures and comparing them to previous months can highlight where your business is doing the right thing and where it isn’t. If this is done monthly, procedures can be changed before it’s too late.

If you use the Budget Manager feature, in which you can enter your expected future figures based on actual figures from the previous months, you can also review the variance between the two. This is another tool to help you adjust your business and make it work better for you.

You may also want to check your VAT liability each month to make sure you are going to be able to pay over the amount at the end of the quarter.

If you’re VAT registered, at the end of each quarter, it is advisable to look over the VAT Audit Report to check all the transactions have been allocated to the correct VAT codes. Once any corrections have been made, raise the VAT return report. This is set out exactly as the VAT return so the figures can be copied directly onto the paper or online return. Xero calculates the VAT return figures as each transaction is entered, making “doing the VAT” extremely easy. Once this report is “published”, it is held on the system for future reference.

By giving your accountant access to your Xero account, they can log in and view the figures at any point. This is helpful to both you and your accountant. Firstly, there is no need to send your accountant a back up copy, which will be out of date by the time it is viewed. Your accountant is able to do any adjustments without you having to wait for the return of the back up before you can add any more data, as is the case with traditional desktop software. Secondly, if you have a query or decision to make about your business, your accountant can log on, view the figures and give you advice instantly.

Xero is simple and intuitive to use. It makes the financial side of your business easier to understand. It makes working with your finance director, bookkeeper and accountant a pleasure, not a chore. All the people I have met who use Xero say they “love” it, not a word usually associated with finances and accounts.