For many businesses, their experience of accounting is a little bit like Pandora’s box. In this old Greek myth, Pandora opened a mysterious box and it unleashed all sorts of chaos on the world. The only difference for businesses that suffer from Pandora’s box syndrome is that the story repeats every tax year.

Maybe you can relate. When the time for tax returns approaches, you take a box full of receipts to your accountant – and when it’s opened, it takes 6 to 12 months to have your financials drawn up due to the chaos contained in that box. 

This makes it hard to make informed business decisions. It also makes it difficult to see outstanding creditors’ and debtors’ balances at any given time, and near impossible to spot mistakes in your accounts.

Luckily, there are tools out there that can bring order to your accounts, and even boost your business performance. Our favourite is Xero. Switching accounting software is never easy and there are many things to consider before doing so.

If your business is ready to switch accounting software, we believe that Xero is the right choice. We’ve helped many clients move over to Xero and we’ve seen the benefits it brings to their businesses.

Here are some of the reasons why we recommend Xero to our clients.

The Benefits of Using Xero Accounting Software

Reduce Clutter and Automate Processes

Accounting can quickly get cluttered – and before you know it, you have a whole office full of Pandora’s boxes. One of the main culprits: receipts. Receipts tend to be like socks – it seems that there’s a magical island that they disappear to. 

With Xero, you no longer need to capture receipts manually. Bank statements and bank transactions can feed straight into Xero on a daily basis.   

But Xero not only helps you with organising receipts. Using powerful add-ons like Dext, data from PDF documents can automatically be extracted from an email or a photo. Xero will automatically extract the relevant information, which means the bookkeeper can get the information instantly, saving you time and money. 

Automatically Allocate expenses

You can set up specific email addresses for suppliers so that documents are automatically fed into Dext and Xero, instantly processing the documents. With Dext and Xero, you can ensure relevant expenses are consistently allocated to the correct categories by setting up automation. This will improve your consistency and save you the time it takes to correct errors. Your financials will be more accurate than before.

Also, what we have found is, that by automating the bank reconciliation with Xero’s functionality enabling you to attach the relevant receipts instantly, you save an enormous amount of time in processing, because it removes a lot of the bookkeeper’s time chasing and having to speak to different people to try and find the documents.

Be aware though. It’s not always the best option for a small business to look at automation and all these third-party software solutions. If you, for example, are a one-man band with less than 30 transactions and not planning on rapid growth, then having all these different automation in process and software systems could most likely be overkill and overcomplicate what can be managed more easily in a manual way.

Save on bookkeeping fees

We have found that when our clients switch to Xero, their bookkeeper’s time can be cut by as much as a third! Bookkeeping time is reduced even more if the bookkeeper or accountant is working remotely because they have all the documents to hand and they are removed from any unnecessary chit chat in the endless chase for documents and rather 100 focus on the job at hand.  

Go Paperless

Paper causes clutter. With Xero, you can start to run a paperless office, with all your documents securely stored, saved and attached to each and every bank account transaction. This makes it much easier to access documents, as SARS accepts digital documentation. You no longer have to dive into archive boxes to retrieve them!

If well implemented, the savings in manual labour and cutting out mistakes far outweigh the cost of the software. 

Increase profits by cutting expenses

How often do you look at your profit and loss? Can you see your monthly profits and losses in real-time whenever you want, or do you need to request this from your accountant? Xero allows you to see your profits and losses in real-time and can give insight into the sources of income and expenses.

At the end of the day, you want to increase profit. But in trying to increase profit, businesses tend to focus mostly on raising turnover. Profit equals income minus expenses. Don’t forget that expenses are part of the equation when calculating profit. When expenses decrease, profits increase. Analysing every expense item and making sure no money is wasted. This may be an easier way to quickly increase profits than trying to grow turnover. 

Set goals and respond to business events in real-time

All successful business owners know their numbers inside-out. They understand each line item, and how it correlates and is differentiated from other related line items. 

They would know, for example, that if sales go up by 10%, the average amount of debtors goes up by 5%, which means you need to increase cash flow by 3% for the business to run as normal.

In the documentary about the Springbok victory in the 2020 world cup “Chasing the sun” one can clearly see three ingredients to achieving great results: setting a goal, mapping out the steps to get there (KPIs), and monitoring progress. Long before the first ball was kicked in Japan, Rassie Erasmus knew their goal: lifting the trophy. They set specific goals and implemented KPIs (key performance indicators) to indicate where they had to be at specific stages in the build-up to the tournament. And we all know the results. The same process applies to your business. 

The best way to get and build team spirit and improve business performance is to have a clearly defined goal. Once you have your end vision in view, and the steps to get there mapped out in the form of KPIs, you need the data to see whether you’re on track. With the real-time data that Xero provides, you can monitor your progress and respond to setbacks when they occur.

The sky is the limit when it comes to the amount of detail you can go into when tracking your progress. 

The biggest retail companies take goal setting to an even higher level: they have sales targets for each store for every trading day of the year. There’s a target for every single day. That means they will know day by day if they are on track to achieve weekly, monthly and annual sales goals. 

With the in-the-moment insights you get from software like Xero, you can do key interventions to stay on target. If you start falling behind on targets, you’ll know it immediately, and you can make quick decisions to get back on track. For example, if there’s a sudden drop in sales, you can run specials, improve service or speak to your sales team to find out what they can do to improve the situation, nipping any possible long-term business losses in the bud.

Need Help with Moving to Xero?

Moving accounting software is no simple task, but as you’ve seen, the benefits can far outweigh the cost and effort.

At EOACC we’ve been helping our clients with Xero system migrations and integrations for more than 10 years. Our clients operate in all sorts of industries, from construction, service and tech, imports and exports, design and branding, e-commerce, manufacturing and retail.  

We always work to improve our own processes by which we gain invaluable knowledge that can help our clients improve theirs. We’ve also developed some software solutions ourselves over the years, which has further given us great insights into all the ins and outs of integrating new software with business processes.

Ready to take your business to the next level and get rid of Pandora’s box for good? Get in touch! We’d love to help.

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