Young Companies are seeking to scale in cash tight environments, the ability to access real time financial information is of prime importance, both for internal analysis and decision making, and also to assure external stakeholders, such as banks, that the Company is moving forward in the right direction and the correct pace.
Xero is therefore critical to your firm’s approach in providing these services and should be utilised by ALL of your client Companies. If they are not on Xero you simply can’t deliver the full value add service you strive for.
The added benefit to using Xero, however, is the ability to utilise the Xero Add-On ecosystem and create bespoke, tailored business processes for each individual business. You should take the opinion that, a startup company should seek to implement, from day one, effective operational and financial systems that can scale with the business without significant additional cost or manual input at a later date.
Xero allows you to do this and add significant value to your Clients from the outset of their business, increasing their investment attractiveness and reducing costs in the long term as revenues commence and grow. If you are new to the cloud accounting world, this article will hopefully give you a better understanding of the types of application that exists, and what benefits they can bring.
Nuvem9 one of the leading cloud accounting specialists likes to categorize the Add-On ecosystem into the following categories of solution when discussing with clients and you should do the same:
- System Integration – these add-ons are cloud solutions in their own right but have a Xero interface that allows the transfer of financial data from that solution into Xero. This removes duplicated data entry, reduces the risk of user error, and integrates the Company’s financial system better into the wider operational processes for that business. As an example, Nuvem9 have a client that has integrated its Magento webstore with Xero, thereby enabling all transactions on its online site to be transferred into Xero as draft invoices at the start of each working day. They previously used Sage and had to employ a clerk solely to input the records from Magento onto Sage;
- Data Automation – there are a growing range of tools that are being used to take previously manual intensive financial processes and automate them via specialist Xero add-on tool. For example, Satago and Chaser allows for automated and consistent credit control processes and Receipt Bank removes Purchase Ledger data entry costs via OCR automation. In this day and age, our rule is that, if any financial process in the business is repeated, there will be an Add-on to automate that process;
- Process Enhancement – these tools add value to an existing process with a Xero link. Once set-up they will continue to generate savings for a business time and again. For example, Stripe, Paypal and GoCardless payment links on sales invoices will increase the speed at which an invoice is paid, and using integrated foreign exchange applications such as Transfermate will speed up outgoing payments; and
- Deeper Analysis – whilst the range of reporting in Xero is good and growing with each release, the default nature of the report formats mean it is likely a Client will have a specific need that cannot be met directly in Xero. The availability of tools such as Fathom, Spotlight, Futrli, ProfitSee and Float enable data to be exported from Xero and analysed in much more customised detail in the reporting tool. This is essentially the modern way of taking data from a Sage desktop system and analysing on spreadsheets, but without the time, errors and inflexibility a spreadsheet based report would provide.
Nuvem9 has developed a wide network of applications and this enables them to create a tailored formula of solutions from each of these categories as appropriate for each client. The solutions are primarily designed for the client to gain fast access to information and scalable growth, but also to allow us to keep costs to a minimum. Truly a win-win for all involved.
If you would like more information on how cloud applications can benefit your practice and would like support in client set up and training for your staff then please register your interest here.