Xero: A guide on how to manage your finances efficiently

Managing finances is an integral part of any business and should be done effectively and efficiently. 

Software is one alternative, but most accounting software has a steep learning curve and can be costly. For small businesses with limited resources, it is critical that you can get the most out of this software at such prices.

What is Xero?
Xero is an accounting software for small businesses that is fully cloud-based. It allows you to link the programme to a live bank feed and execute bookkeeping activities such as invoicing and payroll.

Xero also supports both cash-based and accrual accounting systems, making it ideal for businesses following UK GAAP (Generally Accepted Accounting Practice) or IFRS (International Financial Reporting Standards).

Why should I use Xero?
Xero is a popular choice amongst other businesses mainly for its ease of use. We will outline some of the main reasons why your business can benefit from this cloud-based accounting software:

  • Cloud-based software
Xero may be accessed from any device with an internet connection because it is a cloud-based software. This is one of the most appealing advantages for a small business, especially since they may not yet have an office. 

Xero is one of the most accessible accounting software solutions because it can be used from home or remotely while visiting clients. From anywhere in the world, users can access their transactions, account information, and balances.

You can work from anywhere, at any time, and there are no additional fees for doing so.

  • Converting currencies is efficient
One of the most important selling features for a company that wants to expand globally is the ability to convert currencies quickly and this can be achieved with Xero.

There's no need to bother about manually converting any of the currencies because there's a built-in automated converter. 

  • Bank feeds are automated
Instead of manually entering bank statements into Xero, you can set up a bank feed and have Xero handle everything for you.

Automation can make your accounting much more effective, and automating your bank feed will save you a significant amount of time.

  • Easy to use
Many Xero customers have discovered that the software is simple to use even if they have no prior accounting experience.

Xero's terminology is straightforward to understand, and there are numerous choices for uploading files and supporting documents for simple transactions.

  • File VAT returns
You may now submit both MTD and non-MTD VAT returns to HMRC (HM Revenue & Customs) using Xero. It also handles flat-rate VAT systems, as well as cash and accrual VAT returns. It's included in the beginner, regular, and premium plans for free.

  • Managing payrolls
Using the Xero payroll function, you can track, manage, and process employee pay and pensions all in one location. It's a free add-on. 
Employees can also log in to Xero and request leave and submit timesheets online. 

Furthermore, Xero payroll allows you to manage and adjust any component of your payroll and pension, and the data can be transmitted directly to HMRC or pension organisations from the system, removing yet another task from your to-do list.

  • Clear Pricing System
Xero provides some of the greatest prices on offer when it comes to accounting software, with a three-tier pricing system and nothing hidden.

Starter, Standard, and Premium 10 packages are available, each with a choice of settings for your software.

Getting started with Xero:
Before making the final decision to install Xero, we recommend that you familiarise yourself with how it works with their 30-day free trial period. The free trial includes many features to get you started. It includes:

  • Sending invoices;
  • Entering bills;
  • Submitting VAT returns;
  • Capturing bills and receipts;
  • Reconciling bank transactions;
  • Generate CIS calculations and reports.

After you've completed the 30-day trial and have decided to use Xero, you can start thinking about which pricing plan you'd like to use. This will depend entirely on how your business operates. The cheapest price plan starts from £12 a month, with the most expensive plan at £36 a month. 

We suggest you evaluate your business needs before committing to any of these price plans. 

Persona Finance is proud to be a Silver Xero partner and have a team of Xero-certified accountants ready to offer your business the most essential remote accounting services. Contact Persona Finance now at [] for more information on Xero or for other business and accounting queries.
Accounting and Finance