*or any lesser software you have chosen 😉
1. Cashflow planning – If your Accounting software is a mess, and things are not up to date you really have no idea where you are in terms of cashflow. Yes you can check your online banking, but who knows what bills you still owe for this month, or worst case scenario the last 6 months.
How do you ever really know if you can afford something? The new hire, the International work trip, the new office furniture? Is this how you want to live – never quite knowing??
Another one to think about – If you want to pay yourself using Dividends to be tax efficient, you need to know you have the profits to make this work. This is difficult if the books are a mess, and could end up costing you more in tax if you get this wrong.
2. Time & Efficiency – It’s quicker to deal with accounting stuff as you go. It definitely takes longer digging through invoices and receipts which are 6 months old. Easier said than done, but also HARD FACT.
Use Receipt Bank, snap your invoices as you go – and save time. Remember this when you are next looking at that receipt wondering what the hell it was for.
3. Get paid faster – If everything is up to date and you’ve reconciled your cash receipts, you’ve got a clear view of which customers owe you what. Now you can start chasing them, and get that cash.
It’s definitely worth implementing some structure around chasing your debtors – usually persistence does pay off. Like most things, step 1 is giving yourself the clear picture in Xero which you can work from.
4. HMRC and Companies House – You need to hit your deadlines with your friends here, if you don’t you’ll end up in the bad books and with extra fines to pay. You can’t report properly until everything is reconciled in Xero, so it has to be done sooner or later.
No one likes those brown envelopes, especially when more and more of the text starts becoming red… see here for more details on the various deadlines
5. Sleep better at night – Sleep is important! You can’t run your business if you can’t sleep. You can’t sleep if you have no idea if you’ve got enough cash to pay the bills. Vicious circle! The only way to stop it – face up, look in the mirror – get organised and work out if you do have the cash to pay the bills.
Still confused? Not sure what you need to do to sort Xero out – talk to PennyBooks. We have some nice simple plans where our team will reconcile the transactions for you – you just need to send your invoices to Receipt Bank.
We’ll talk to HMRC and manage your deadlines. No such thing as a stupid question in our book. Get in touch if you’re keen for a chat – even if you just want a bit of reassurance that you’re on the right track.