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

Published By: HostingAdvice.com
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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.