including Xero. Founders Hamish Edwards and Rod Drury first met in 2003, when Hamish was virtual CFO of Rod’s software company. In April 2006 co-founder Craig Walker joined the team. (His offer from Drury went something along the lines of ‘I'm doing my next big thing — you in? You start on Monday’.) Frustrated by clunky desktop-based accounting packages, technology evangelist Drury wanted more. On 1 May 2006, Walker started writing code on what would become the first version of the yet to be named Xero. The fourth co-founder, Philip Fierlinger, joined in July 2006. By this time, accounting expertise plus technological ingenuity plus business acumen equalled Xero, revolutionising and simplifying how business owners run a business.Discarding existing models, Edwards, Drury, Walker and Fierlinger started clean and built a single ledger online accounting system that enabled integration with bank feeds. Co-founder Gary Turner joined in 2009 as the Managing Director of their UK operations.Due to the online nature of the software, no longer do users need to wait for annual updates. Online updates are implemented by head office in the wee hours of the morning. Businesses don’t need to waste time installing updates and upgrading files — they simply start their day accessing new features.Xero is listed on the Australian Securities Exchange. It is available globally and has local teams in Australia, New Zealand, the United States, Asia, South Africa and Europe.
Track Projects is a job-tracking tool. It’s available as an add-on in all regions except the US, where it’s included in the Established package.
Analytics Plus is a collection of Advisory Tools including a short-term cash flow projection and business snapshot. This tool is available as an add-on in all regions except the US and Canada, where it is included in the Established or Premium package.
The UK version includes the option of Submit CIS returns for the Construction Industry Scheme and Pay with Wise, a bills payment solution.
Homepage: Checking Out the Dashboard
Once you have set up your Xero account (see Chapters 2 and 3), you just have to log into your account, using your password, to access the My Xero homepage — what Xero calls the Dashboard. Across the top of the dashboard is the menu bar for quick access to all areas of Xero.
Here’s a quick overview of the different parts of Xero’s main dashboard’s menu bar:
Dashboard: Provides an overview of bank, credit card and online payment gateway accounts; an Account Watchlist; and a summary of invoices owed to you, bills you need to pay, expense claims, and total cash in and out.
Business: Here you can access bank account details, sales (Chapter 6), purchases (Chapter 7), pay run (Australian, New Zealand, United Kingdom and US users can access advanced payroll features), Products and Services (inventory — Chapter 13), and Expense Claims or New Expenses (depending on when you started your subscription — Chapter 7).
Accounting: Here you can access reports and the Budget Manager features (Chapter 12) and more advanced settings such as conversion balances, and the Adviser area. (Note: The Accounting area can only be seen by users with Adviser access; see Chapter 4 for more on setting access for users). You can also access fixed assets from here (Chapter 14).
Payroll: For editions with inbuilt payroll functionality. (Note: Payroll is not covered in this book.)
Projects: Access to setting up job tracking, includes quoting, invoicing, and time tracking (Chapter 12).
Contacts: Shows customers, suppliers and employees added as Contacts, your Contact Groups (see Chapter 5 for more on both areas) and a list-building feature called Smart Lists.
Understanding Your Team’s Needs
‘Avast belay, yo ho, heave ho, A-pirating we go, And if we’re parted by a shot, We’re sure to meet below!’ … and that was my one line in the Singaporean pantomime production of Peter Pan. In the theatre, everyone in the crew has a defined role, yet each role is interdependent on the other players. If the lighting guy had missed his cue, we would have been in darkness; if the sound guy flicked the wrong switch, we might not have been able to hear; and if I had forgotten my one line — well, the audience may well have wanted their money back! We supported each other, we improvised and we covered each other’s backs, for the greater good of the production and the audience’s enjoyment.
Xero is an innovative and time-saving product — but it doesn’t work on its own. If you set up and activate all your business bank accounts and maybe set up a few coding rules (see Chapter 4), you can save yourself a lot of time. But don’t think you can then ignore Xero and return in 12 months’ time to find everything done for you! If you try this approach, what you’re likely to have is lots and lots of pieces of a puzzle, waiting to be reviewed, coded and reconciled.
The Xero file needs to be processed on a regular basis, with reports prepared, taxes submitted, and data analysed to help with informed business decisions. Ideally, you need to establish a supportive Xero advisory team that’s focused on helping your business achieve its goals. The collaborative and transparent nature of Xero lends itself to working with this team of specialists, who in their own way support each other and your business. Your team might include:
Accountants: Your accountant works from the top of your business down, looking at the overall business. Just like you can go to different types of doctors, you can also access different types of accountants for the health of your business:Tax accountants assist businesses in meeting compliance obligations, preparing financial statements and preparing tax strategies. Tax accountants can review reports and provide rolling tax advice during the year. They can maintain the Fixed Asset Register and prepare depreciation schedules from within the accounts. Tax accountants can enter the end of financial year journals directly into Xero’s single ledger and confirm that your financial reports from Xero match your prepared financial reports.Management accountants assist businesses with strategic planning, business growth, cash flow budgeting and financial analysis. Management accountants assist in developing a useful chart of accounts — customising report layouts so information is presented in an informative manner — and issue monthly management reports. Using visuals, words and numbers, a management accountant can help you understand how the business is tracking and what can be done to improve it.
Bookkeepers: These experts clean the data working from the bottom of businesses up, entrenched in the detail, assisting with data collection, reconciling reports, and following up with accounts payable and accounts receivable, and payroll management and reporting. Bookkeepers can identify complicated transactions, such as a fixed asset purchase, and flag them for the tax accountant to review and approve.Your bookkeeper may assist with the preparation of consumer tax reporting where relevant.
Xero partner: Investing in up-front support from a Xero implementation specialist gets you started faster and ensures you’re heading in the correct
