Boost Your Business Accounting with 7 Benefits of Xero Software.

Sound financial management is vital for small businesses and startups. Entrepreneurs, recognizing this, should wisely handle finances using valuable tools like cloud accounting software to navigate business uncertainties

This article delves into the benefits of employing cloud accounting software for your business, spotlighting Xero as a premier choice in the current market.

Can you elaborate on the functionality of Xero Accounting Software?

Xero, introduced in 2006, is cloud-based accounting software designed for small businesses. It allows quick access to financial information, empowering business owners to oversee their complete accounting process.

Xero streamlines financial management, handling basic bookkeeping, online payments, bill settlements, electronic VAT return submissions, and automated accounting, fostering the seamless operation of a flourishing business.

Why opt for Xero Accounting Software?

Xero, a widely embraced cloud-based software, has gained popularity due to its user-friendly interface and adaptability, experiencing rapid growth. With a multitude of features and integrations, it caters to diverse business types and sectors.

As per numerous Capterra reviews, Xero stands out, earning a “Top Performer” designation in 2021, with 96% praising its user interface and 95% commending its user-friendliness. This accounting software is crafted to boost small businesses’ performance and facilitate their expansion.

Offering a comprehensive business foundation, Xero links businesses with banks, payment services, accountants, and over 700 third-party applications. Moreover, it can be customized to meet the unique needs of your business.

What advantages does Xero offer for online accounting?

Opting for Xero in your small business is a smart choice, given its ability to be tailored to your specific needs. The following are seven essential benefits your business can experience through the use of Xero.

1. Get Payment Faster

Delayed payments pose a substantial challenge in the UK, where around 30% of invoices exceed agreed-upon terms, and 1 in 5 insolvencies is associated with payment delays. To avert cash flow issues, implementing a robust strategy for managing accounts receivable is imperative.

• Digital payments.

Luckily, Xero can expedite your payment collection, connecting you with online platforms like Stripe and GoCardless. Integration of a “pay now” button in your online invoices, along with email delivery of PDFs that tracks when the invoice was viewed, streamlines the payment tracking process.

Simplifying the bill payment process increases the likelihood of prompt settlements. Enabling online bill payments allows clients to effortlessly click a button and swiftly clear their invoices.

• Automatic Payment Notifications

Finally, you can automate the pursuit of unpaid invoices using various Xero add-ons, such as Chaser. This valuable application lets you personalize payment reminders and schedule them strategically, giving the impression of personalized outreach.

2. Time Optimization

• Cloud-based Document Storage

A key benefit of Xero is its entirely cloud-based nature, enabling you to store all documents online and eliminating the requirement for physical records. This feature alone can save you numerous hours previously spent sorting through boxes and folders of bills, bank statements, invoices, and receipts.

• Automatically retrieve data

Moreover, with their Hubdoc application, you can automatically extract data from invoices and receipts. Simply take a photo with your phone or upload a document, and Hubdoc will convert it into usable data. It can also streamline data entry by generating a draft transaction on your behalf.

• Up-to-date reports

Lastly, it provides robust reporting capabilities that allow you to acquire a thorough overview of your company’s financials. For example, generating reports for tracking accounts payable and cash flow is effortless. This feature proves highly beneficial for entrepreneurs needing swift access to such information.

3. Accessibility from any place and at any time.

Xero, an internet-based accounting software, is accessible through a computer or mobile phone with internet connectivity, providing location-independent access at any time.

In contrast, traditional accounting software necessitated installation on a single computer, restricting usage to that device and incurring additional fees for access from other devices.

If you presently rely on spreadsheets for record-keeping, you know that without utilizing collaborative online features or cloud storage, your data remains confined to the computer where the file originated. This limitation can impede accessibility and expose your data to both security and loss risks.

• A mobile device application.

Xero accounting software is accessible through a mobile app compatible with Android and iOS platforms. Subscribers enjoy complimentary access to this app, facilitating convenient software usage without the need for a laptop. This enables users to manage accounting tasks from their mobile phones, even on the go, such as when in a car. The Xero mobile app enhances convenience by providing easy accessibility.

4. Security of Data

As a leading player in its industry, Xero upholds the utmost cloud security standards, incorporating multiple layers of protection to secure both your financial and personal data. This includes encrypting all information using bank-grade encryption protocols. Furthermore, your data is stored in secure data centers under continuous monitoring throughout the entire year. Xero not only implements various cloud security measures but also offers a detailed report on the subject.

5. No need for updates, upgrades, or backups.

• Updates in Real-Time

Cloud-based bookkeeping software provides a notable advantage by removing the necessity for manual updates. Keeping software current has traditionally been a cumbersome task for business owners, leading to delays and reliance on IT support only when issues arise. However, online accounting software automatically updates in the background on the company’s servers. Additionally, a dedicated IT support team ensures the financial platform operates seamlessly without the need for manual intervention.

6. Enhance Business Productivity

Cloud accounting presents an additional notable benefit, namely, the heightened business efficiency that most business owners can experience. While the productivity-boosting features mentioned earlier contribute significantly, there are additional advantages.

Imagine receiving notifications about sudden changes in your financial status, like a decrease in cash flow or a sudden rise in expense claims. You can also automate the scheduling and payment of suppliers, track mileage on the go, and invoice projects as they progress. All these features and more are accessible through Xero.

7. Availability of Financial Information

Xero transcends being a typical online accounting software; it can serve as the financial backbone of your entire business, offering real-time financial insights from anywhere. Whether your work involves frequent travel or demands consistent access to your accounting data, Xero proves to be the optimal solution.

The software includes standard reports like profit and loss, balance sheet, and VAT reports. Furthermore, its capabilities can be extended by integrating with other online tools such as Fathom or Spotlight. These add-ons enable the creation of automated, tailored reports that are visually engaging and feature the essential KPIs for your business.

• Powerful forecasting capabilities.

Xero offers powerful forecasting features, enabling the creation of budgets, forecasts, and the planning of different business scenarios, even for individuals without an accounting background. This functionality makes it simple to evaluate the impact of positive or negative events on your firm’s profitability. For instance, Xero can be utilized to project best-case and worst-case scenarios for the impact of a successful marketing campaign or a temporary closure due to COVID restrictions.