Xero for small business – Essential tips

As a Xero Platinum Partner and one of the top 2% of Xero partners in the UK for clients and certified advisors, the Genus team at Shorts have extensive experience using the platform to help businesses grow and thrive.

Our continued success in deploying the best features of Xero for our clients saw us named as Large Firm of the Year at the 2022 Xero Awards as well as finalists for the 2023 Large Firm of the Year and 2023 Innovative Partner of the Year.

Our goal is to make sure business leaders can extract the efficiencies and potential of using Xero, including the 1000+ apps and add-ons in the Xero marketplace.

So, without further ado, here are our essential tips for businesses using Xero.

Useful Xero features for businesses

As a small business owner or director, time is rarely on your side. A lot of financial admin and record keeping is needed, so the difference a proper Xero integration can make simply cannot be understated. Here are ten core Xero functions that are essential for modern businesses.

Bookkeeping

Automation can save countless hours when it comes to recording and monitoring the many financial transactions conducted by a business. Add-ons can be integrated that will automatically read invoices, generate invoices in Xero, as well as attach electronic copies, allowing you to go largely paperless and have everything in one place.

Business reporting

An integrated Xero account contains an enormous amount of business data, But this data is only useful when presented in a user-friendly and accessible way. Xero provides a variety of financial reporting and dashboard tools that enable leaders to make better and more informed business decisions.

Invoicing

Invoicing is another time-consuming task for the finance team of a business. With Xero, you can create and issue invoices with ease. You can also set invoices to recur automatically if required. You can even save time by automating recurring chasers to ensure payments are not delayed, therefore improving cash flow.

Bank reconciliation

It is important to make sure all transactions in your bank accounts are accurately reflected in your business accounting records – this is known as bank reconciliation. Xero can automate this process, importing bank lines automatically, and providing a simple bank reconciliation process, including suggested transactions to match, and the creation of automated bank rules for managing records.

Tracking expenses

Xero allows you to tag two different departments/options to all transactions and run reports on different options (e.g., a Profit & Loss report by location/sales type/service line). This enables you to extract more useful information from your accounts system and ultimately make better business decisions.

Payroll

The entire payroll system of a business can be managed in Xero, including scheduled salary payments, employee taxes and NICs (National Insurance Contributions). This is a timesaver as it will automatically post the journals into your accounts system, as well as provide employees with their own portal to access their payslips and update their personal info (such as addresses) when required. Simple timesheets and holiday functionality are also included.

Cash flow reporting and management

Using Xero, businesses can set up real-time cash flow reports and dashboards that enable you to track and estimate the flow of cash coming in and going out of your business over set periods of time.

Inventory management

For businesses with simple inventory needs, Xero can also be used to accurately track and update inventory levels with little hassle.

How businesses can maximise their Xero experience

The potential for businesses to benefit from Xero is enormous, but success depends on building a good understanding of how it works, and which features are most appropriate for a particular business challenge. Here are some tips on maximising the overall effectiveness of Xero and the overall experience as a user.

• Make use of bank feeds: These let you import transactions into Xero from your bank automatically.
• Take the time to build the right reporting: The range of reporting options may be intimidating at first, but taking the time to explore and experiment with these features will eventually enable you to create the perfect dashboards/reporting for different audiences.
• Make use of mobile: Xero is fully accessible on most mobile devices via the Xero app. This means you can manage your books, invoices, expenses and more wherever you are (providing there is network coverage!)
• Take advantage of integrations: From your CRM to your website content management system, Xero is easy to integrate with the other software or web platforms you use to do business. Integrating everything with Xero can help streamline your operations and admin.
• Make sure data is up to date: Data is only accurate and useful when it is current – it is essential to make sure data that goes into Xero is kept up to date.
• Automate where possible: From invoice reminders to cash flow and bank reconciliation, Xero’s time-saving benefits can be maximised by making smart use of its automation features.
• Train your staff to use Xero: Xero is not a difficult platform to use, but formal training is essential to ensure it is properly utilised by a team. This will help reduce the risk of errors and keep things accurate. The Shorts team is happy to offer in-depth Xero training that is tailored to your specific business needs and goals.

Get started with Xero today

The Genus team at Shorts have worked with businesses big and small across a wide range of industries, helping them maximise the benefits of using Xero. The help we can offer includes a full initial set-up of Xero, Xero utilisation reviews for companies that already use it, training for staff, and regular Xero support packages, including quarterly checks and the latest app recommendations.

If you are considering Xero for your business - whether you’re just starting out or would like to switch from another platform - book a free consultation with us today and let’s get started!