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The Beauty of Xero’s Cloud-Based Accounting Software for SMBs

Published By: HostingAdvice.com
Credit: Ghostwriter
Type: Feature
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The Beauty of Xero’s Cloud-Based Accounting Software for SMBs — How the SaaS Brings Efficiency & Visibility to Business Management

TL;DR

Xero is a beau­ti­ful, friend­ly, el­e­gant­ly de­signed ac­count­ing tool built specif­i­cal­ly for small busi­ness­es (not ac­coun­tants). It in­cludes all of the fi­nan­cial tools a small busi­ness needs. Xero in­te­grates with more than 500 oth­er best-of-breed busi­ness ap­pli­ca­tions and apps, en­abling easy da­ta con­nec­tiv­i­ty with them to pre­vent re­peat­ed­ly en­ter­ing the same in­for­ma­tion or copy­ing and past­ing. Xero con­nects every re­lat­ed piece of da­ta, us­ing that to track the lo­ca­tion of every cent in­volved in busi­ness fi­nances, and re­count­ing it all in a real-time, drill­able process that hard­ly de­serves the moniker of re­port­ing. It’s a stream­lined ac­count­ing sys­tem that makes man­ag­ing a busi­ness’ books less of a chore. Xero is sim­ply beautiful.

Imagine a busi­ness own­er who em­ploys one oth­er full-timer, a few part-timers, and, de­pend­ing on the time of year, one or more 1099 free­lancers. She man­ages the de­tails and lo­gis­tics of her par­ty plan­ning busi­ness from a tablet and her om­nipresent smartphone. 

Of all the tasks in­volved in run­ning her busi­ness, her least fa­vorite is do­ing her books — in­voic­ing, pay­roll, ac­counts payable, and es­pe­cial­ly han­dling em­ploy­ee and con­trac­tor ex­pense re­ports and re­im­burse­ments. In fact, she finds man­ag­ing her busi­ness fi­nan­cials an un­pleas­ant chore she dreads a lit­tle more every week.

She us­es Quickbooks, but her pur­suit of fi­nan­cial man­age­ment tools with fun and easy-to-use in­ter­faces in­spired her to try oth­er so­lu­tions. She tried — and loved — such best-of-breed, single-function, or niche tools as FreshBooks for in­voic­ing and Shoeboxed for re­ceipts. They re­moved the chore from work­ing with in­voic­es and re­ceipts, but get­ting them to share in­for­ma­tion with Quickbooks for pay­ments, rec­on­cil­i­a­tion, and ex­pens­es proved a big­ger headache than sim­ply us­ing the built-in Quickbooks equiv­a­lents. For on-site sales, the busi­ness own­er has long used Square, with its lit­tle plas­tic card-swiper at­tach­ment for her smart­phone, but it pre­sent­ed sim­i­lar in­te­gra­tion hurdles.

The busi­ness own­er loves run­ning her busi­ness but hates the me­chan­ics and process­es of han­dling her busi­ness’ financials.

Xero is a friend­lier, more el­e­gant­ly de­signed ac­count­ing tool built specif­i­cal­ly for small busi­ness­es. It in­cludes all the fi­nan­cial tools a busi­ness needs, in­clud­ing in­voic­es, quotes, in­ven­to­ry con­trol, pur­chas­ing, ac­counts payable, pay­roll, ex­pens­es, and rec­on­cil­i­a­tion of everything. 

It al­so in­te­grates with more than 500 oth­er ap­pli­ca­tions so that ex­ist­ing book­keep­ing sys­tems can grad­u­al­ly tran­si­tion to Xero or con­tin­ue us­ing lead­ing single-purpose apps with­out in­tro­duc­ing da­ta con­nec­tion hur­dles. In fact, Xero leans heav­i­ly on au­to­mat­ed da­ta trans­fer, shar­ing, and pre-population method­olo­gies to re­move as many hur­dles as pos­si­ble, es­pe­cial­ly the task of re­peat­ed­ly en­ter­ing the same in­for­ma­tion or man­u­al­ly copy­ing and past­ing da­ta from one sys­tem or area to an­oth­er. It then presents a busi­ness’ fi­nan­cial da­ta clean­ly and, frankly, beau­ti­ful­ly.

Sleek Design & High Readability Position Business Owners for Success

When Xero bills it­self as “beau­ti­ful ac­count­ing soft­ware,” it’s not just mar­ket­ing speak. Xero is de­signed about as far from the sen­si­bil­i­ty of 1990s CPA CD-ROM soft­ware as pos­si­ble. That beau­ty is not just in how it looks, but in how it works.

Looks count for some­thing when dis­cussing a user in­ter­face in which a busi­ness own­er is ex­pect­ed to spend as much time, to vis­it as of­ten, as her ac­count­ing sys­tem. Xero de­liv­ers on its claimed “beau­ti­ful” user in­ter­face as well as any ac­count­ing prod­uct — in­deed, any busi­ness tool — could pos­si­bly hope. Every screen and fea­ture is sleek and clean — and not just on the mo­bile app. The mo­bile in­ter­face is un­de­ni­ably well-designed and un­clut­tered, but it’s al­so feature-rich; every­thing a busi­ness own­er might need is there, not stripped away to cre­ate the il­lu­sion of a clean interface. 

Accessed from a desk­top or lap­top com­put­er, Xero’s brower-based in­ter­face is as sleek and clean as the ver­sion that ap­pears in mo­bile, which is a wel­come sur­prise. Type is read­able and sur­round­ed by am­ple white space, with­out oth­er text shoe­horned in­to every inch of screen re­al es­tate. Everything that is on screen has a pur­pose, and noth­ing that doesn’t ab­solute­ly need to be there is in­clud­ed. That alone goes a long way to­ward reach­ing that “beau­ti­ful” bar.

How Xero Works: From Invoices & Inventory to Transaction Reconciliation

The way Xero learns about a user’s busi­ness, in­clud­ing fi­nances, clients, and prod­ucts, and then con­nects that da­ta to re­duce repet­i­tive and an­noy­ing tasks is what tru­ly makes the ser­vice beau­ti­ful. Looks help, but they’re backed by functionality.

Creating an in­voice, for ex­am­ple, changes and is au­to­mat­i­cal­ly stream­lined as time goes on, the more one us­es Xero to man­age the busi­ness fi­nances. The first time, one must ful­ly de­fine the client, in­clud­ing name, con­tact in­for­ma­tion, and oth­er per­ti­nent de­tails. The same for the prod­uct or ser­vice sold for the first time to that client or any client. 

The sec­ond time an in­voice is cre­at­ed, typ­ing part of the client’s name sug­gests the client; se­lect­ing the client from the sug­ges­tion list then pop­u­lates all the oth­er fields au­to­mat­i­cal­ly. Products and ser­vices are the same — start typ­ing the name, pick the pre­vi­ous­ly used prod­uct or ser­vice, and then the de­scrip­tion, unit price, tax rate, and oth­er rel­e­vant de­tails in­stant­ly pop­u­late the in­voice. For busi­ness­es that make use of Xero’s in­ven­to­ry track­ing of phys­i­cal goods, the sys­tem al­so re­moves prod­ucts sold on the in­voice from in­ven­to­ry, au­to­mat­i­cal­ly in the background.

Using the mo­bile app, an em­ploy­ee can record an out-of-pocket ex­pense. If the em­ploy­ee — or a dif­fer­ent em­ploy­ee or con­trac­tor — has sub­mit­ted the same ex­pense be­fore, Xero’s mo­bile app will rec­og­nize that con­nec­tion with­in the busi­ness ac­count and of­fer field com­ple­tion sug­ges­tions based on the pri­or ex­pense en­tries. The app will then al­low the em­ploy­ee to scan a phys­i­cal re­ceipt or in­voice and at­tach it to the ex­pense re­port be­fore send­ing the ex­pense off as a re­quest for reimbursement.

The busi­ness own­er im­me­di­ate­ly re­ceives the re­im­burse­ment re­quest — on­ly with­in the Xero in­ter­face or with an op­tion­al email alert — and can then re­view the re­quest while see­ing it in the con­text of all re­im­burse­ment re­quests, past and present re­quests from the same em­ploy­ee, and the his­to­ry of sim­i­lar re­im­burse­ment re­quests from all em­ploy­ees and con­trac­tors. Acting on the re­quest — ap­prov­ing or deny­ing — trig­gers oth­er au­to­mat­ed ac­tions in­clud­ing adding ap­proved ex­pense re­im­burse­ments to the employee’s pay­roll, which, in turn, au­to­mat­i­cal­ly up­dates the busi­ness’ pend­ing trans­ac­tions ver­sus bank bal­ance as well as ac­counts payable, P&L, and oth­er re­ports in re­al time. Bank rec­on­cil­i­a­tion can then be done quick­ly and eas­i­ly from Xero on­line or mo­bile, and ei­ther one trans­ac­tion at a time or in batch.

Moreover, not every ac­tion has to be tak­en with­in Xero it­self to reap the re­wards of the prod­uct. Xero in­te­grates tight­ly with more than 500 oth­er ap­pli­ca­tions like FreshBooks, Shoeboxed, Vend, PayPal, Debtor Daddy, and so many oth­ers. There’s an en­tire cat­e­go­rized App Marketplace for all the apps that con­nect with, en­hance, or even re­place, parts of Xero. Data from all of them can be pulled in and used with­in Xero to pop­u­late and con­nect with oth­er da­ta from Xero it­self or oth­er apps that wouldn’t nor­mal­ly com­mu­ni­cate with one another.

The con­nec­tions Xero draws be­tween da­ta aren’t rev­o­lu­tion­ary. We live in an age in which each Like changes which posts ap­pear and are left off tomorrow’s time­line on Facebook, when ser­vices like Quantcast con­nect length of car own­er­ship with fa­vorite tele­vi­sion shows and ed­u­ca­tion lev­el to help busi­ness­es build pre­dic­tive con­tent and ad­ver­tis­ing models. 

It shouldn’t be news­wor­thy that an ac­count­ing pro­gram can au­to­mat­i­cal­ly pop­u­late client or em­ploy­ee da­ta in in­voic­es and ex­pense re­im­burse­ments or dy­nam­i­cal­ly man­age in­ven­to­ry and sup­pli­er pur­chase or­ders. It shouldn’t be news, but it is be­cause it’s such a rar­i­ty in the realm of busi­ness ac­count­ing software.

Insight & Reporting Efficiency Make for a Friendly Financial Workflow

Xero’s beau­ty ex­tends to how clear and clean it makes the win­dow in­to the busi­ness’ fi­nances. Every trans­ac­tion can be in­stant­ly re­called, iden­ti­fied, and rec­on­ciled against the over­ar­ch­ing view in­to the busi­ness. Every dol­lar is tracked and re­port­ed at a click. A busi­ness own­er can un­der­stand her en­tire busi­ness fi­nan­cial pic­ture in­stant­ly and with­out an ac­count­ing degree.

Like even the most ba­sic ac­count­ing soft­ware, Xero pro­vides the usu­al cru­cial re­ports such as a gen­er­al ledger, P&L, and var­i­ous in­come and ex­pen­di­ture re­ports. It goes be­yond the ba­sics with many oth­er re­ports al­so com­mon to com­peti­tors, but then Xero does some­thing unique, and, for a busi­ness own­er, love­ly. The re­ports Xero gen­er­ates are not sta­t­ic, ba­si­cal­ly ink-on-screen state­ments. Every item is click­able. One can drill down from any re­port, no mat­ter how high lev­el, through every lay­er, every ac­tiv­i­ty, every trans­ac­tion, to reach the dis­po­si­tion of every cent, to find the ker­nel of da­ta at the heart of any activity.

Looking at the Profit and Loss Report, for in­stance, the Expenses sec­tion can be opened to re­veal cat­e­gories, then each cat­e­go­ry drilled down in­to to show each type of ex­pense, then fur­ther to each ven­dor paid, and from there, it’s just as easy to get to a par­tic­u­lar vendor’s pay his­to­ry, the rate he charges, and when those rates change. Income cat­e­gories open like flow­ers at a click, re­veal­ing in­ner petals of in­di­vid­ual trans­ac­tions, which can then branch off to cus­tomer da­ta and tra­verse the stalk in­to the in­ven­to­ry roots of prod­ucts sold.

Every ac­count­ing prod­uct cre­ates re­ports, but those are typ­i­cal­ly a dozen or so end-of-week or month­ly re­ports that have to be com­pared man­u­al­ly, line-by-line, to glean any in­sight in­to the busi­ness’ fi­nances and per­for­mance. Xero gen­er­ates re­ports that, when print­ed, are the same sta­t­ic pieces of in­for­ma­tion. Before they’re print­ed, how­ev­er, Xero’s re­ports aren’t like the state­ments of old at all. They’re lay­ered in­sights that start at the top and al­low in­stant, easy, beau­ti­ful in­sight in­to every trans­ac­tion and de­tail, no mat­ter how small, live on the com­put­er or mo­bile screen.

Xero Provides an All-Encompassing Platform for Business Finances

Returning to the busi­ness own­er who em­ploys one oth­er full-timer, a few part-timers, and 1099 free­lancers. Xero has re­placed the dread­ed chore of man­ag­ing the fi­nances of her par­ty plan­ning busi­ness, of copy­ing and past­ing da­ta be­tween sec­tions of Quickbooks and be­tween it an Square, Freshbooks, and Shoeboxed.
She no longer copies and pastes be­cause Xero au­to­mat­i­cal­ly con­nects rel­e­vant da­ta, even sug­gest­ing ex­ist­ing da­ta when she be­gins typ­ing in­to in­voic­es, checks, and oth­er forms. She has been freed from the te­dious, error-prone method of pulling re­ports and com­par­ing and cross-referencing them line-by-line to un­der­stand the per­for­mance of her busi­ness, its per­son­nel, and its prod­ucts and services.
Xero has even stream­lined her pay­roll process­es by con­nect­ing em­ploy­ee and con­trac­tor pay and tax da­ta with her dig­i­tal time clock app and ap­proved ex­pense reimbursements.

Xero con­nects every piece of da­ta with oth­er da­ta it af­fects and re­lates to, us­ing that to track the lo­ca­tion of every cent of the busi­ness fi­nances, and re­count­ing it all in a real-time, drill­able process that hard­ly de­serves to be called re­port­ing. It’s a stream­lined ac­count­ing sys­tem that makes man­ag­ing a busi­ness’ books sim­ply beautiful.