Xero is a relatively new cloud accounting software that allows business owners to spend more time focusing on their core business, rather than managing their accounts manually.

xero

The New Zealand-based company already supports over 109,000 Australian organisations and primarily targets small- to medium-sized businesses (SMBs). The software has the potential to reduce inefficient accounting processes and increase effective collaboration while protecting financial data with multi-layered security – all for a small monthly fee.

Benefits of Xero

Increased Efficiency

Inefficient operations can hamper an organisation’s productivity and growth. Xero reduces time wasted on manual accounting because it allows for access from any location and automates time-consuming, manual activities.

Xero improves operations by enabling a mobile workforce. Rather than driving back to the office to access, upload or download information, employees can work with current financial information from home or a client’s office, off any computer, tablet or smartphone with an internet connection.        

For example, checking updates on computer and on a smartphone looks like this:

Additionally, many manual processes that require calculators, ledgers and/or a great deal of effort are no longer necessary. Xero automatically pulls data from bank feeds, reconciling and categorising transactions in seconds. Instead of generating recurring invoices every period, organisations can automate this process, receiving notifications once the invoice is opened.

Many organisations discover increasing supply chain efficiency can negatively affect another region of the business. In contrast, Xero’s streamlining of accounting processes preserves available resources like time and money, which can be reinvested.

Effective Collaboration

Inefficient collaboration with other employees, clients or partners can drain an organisation’s daily productivity. Organisations using Xero can invite users to collaborate on real-time financial data, reducing bottlenecks and ensuring effective group effort.

A study by NewWOW found non-collaborative work environments are one of the top two reasons for decreased productivity in the workplace. This is largely due to time wasted waiting for emails, ferrying around print-outs and waiting for approvals from collaborators in different time zones.

Xero allows multiple users to work on data concurrently from any location, enabling accurate financial insights, accelerating decision-making and leading to optimal organisational performance. For example, instead of having to wait for information, an employee can alert the business owner of any concerns as they surface, resolving issues before they affect productivity.

Collaborating is often seen as an exercise in futility. However, Xero minimises sequential processes, keeps business owners fully informed and results in a more effective workforce with a lighter workload.

Security

Cyber threats are intensifying with each passing year. Xero helps organisations strengthen their security measures, providing enterprise-grade technology to protect them from unauthorised access and system failures.

A study by Cert Australia found 15% of organisations don’t have dedicated IT security staff, while 72% of organisations have only one to five dedicated personnel. Unsurprisingly, 95% of organisations believe they needed to improve their IT security skills or practises.

Xero guards organisational data like sensitive customer records, financial information and funds with multiple security layers including physical security, user passwords, firewalls and third-party inspections – benefits that most organisations would likely not be able to afford on their own.

Challenges of Xero

Limited stock control features

Organisations with no inventory control or inventory management requirements will benefit the most from Xero. Xero has advised they will be introducing more advanced features soon, but in the meantime, organisations can interface with web-based stock systems, like Unleashed.

Potential security threats/unscheduled downtime

Although security fears around the cloud are decreasing, horror stories about hackers and data theft abound. Thus far, Xero has never experienced data loss. However, Xero has suffered unscheduled downtime. Nonetheless, Xero was built for the cloud, and continues to maintain 99.99% availability.

Reliance upon the internet

As there is no desktop version of Xero, it can only be used where there is an internet connection. Performance can be affected where the connection is poor or when the connection is overloaded by users.

How to implement Xero

  • Collect all relevant accounting information. For more specific details see here. Ensure the final trial balance from the legacy system is accurate before transitioning to Xero.
  • There is no software that needs to be installed. Instead, make sure your device has the designated system requirements. Use one of the supported browsers and a quality internet connection. In order to leverage all of Xero’s functionalities, install Adobe Flash player, Microsoft Office and Skype.
  • Try Xero free for 30 days. There is no credit card required and no obligation to continue.
  • Once you’ve ascertained whether Xero can benefit your organisation, set up training. There are a number of training videos on the website. Once an employee is confident, have them train other staff. Xero has a clean and simple dashboard and provides free online support 24/7.

In today’s increasingly competitive world, organisations are struggling to find ways to stay ahead of the competition. Organisations embracing Xero waste fewer operational and financial resources and often are able to beef up their security. Xero smooths the wrinkles in accounting, creating more efficient pathways and helping organisations shape a more secure future.

Business Wise
The team at Business Wise don't just do bookkeeping and accounting - we believe that successful businesses are those that are informed, proactive and open to change, and we want to help you on your journey to success.