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New Financial Year: It might be time to change to Xero - But how much will I save?

The end of financial year is approaching rapidly. Here at Tailored Accounts, we are already planning our payment summaries for the end of year reconciliation! However, we also know that April through to July is the period when we are generally flooded with enquiries concerning moving from existing accounting system to new system like Xero, so we are ready for this surge of interest too!

We are exciting to announce that over the next three months, we are going to transition one of our largest-staffed client companies from their existing system to Xero. We will use this client as an example, to show you how much customers can save by moving from a large corporate accounting method to a more de-centralized system like Xero and its add-ons.

The client in question was previously using Attaché, for which they were paying around $40,000 per year plus around $5,000 extra for upgrades and general support. However, the highest costs were felt in the inefficiency of recording transactions using this clumsy software. Large investments of time from the payroll and accounting team meant serious losses to the company!

By moving this client to Xero, here are the straight savings in dollars that were collected:

  • Software subscription cost: From $40,000 down to $8,020 per year ($720 for Xero + $4,500 for Keypay + $1,800 for Receipt bank + $1,000 for Power BI). A straight saving of 80%;
  • Paperwork handling and warehouse storage (turning hard copies to soft copies) cost: From $9,600 per year down to $0 as XERO + Receipt Bank will enable clients to be 100% paperless. Savings of 100%;
  • Time saving for payroll handling (staff) & processing (payroll team) is around 15 minutes per staff + 3 hours per payroll clerk per week. Annual savings of around 1,456 hours or $36,400;
  • Time savings for account payable handling (staff & manager) & processing (AP team) is around 30 minutes per staff & manager + 3 hours per AP clerk per week. Annual saving of around 208 hours or $6,240;
  • Time savings for senior accountant & CFO in producing report is around 2 hours per week per person. Annual savings of around 208 hours or $8,320;
  • Improvements in financial data that help Managers & the Board to make right decision at the right time including: Identifying waste or overspending budget cost items (including salary); Pressuring sale team to meet KPI; Retaining recurring income and customer. The estimated annual saving will be a minimum of $100,000 per year for a business of this size.

Overall, that's a saving of almost $200,000 per year for a business turning over around $10 millions. Over 10 years, our client will end up saving over $2 millions!

If you want us to review your system and produce a business plan to show you how much your business would save, we can get it done for NO upfront cost! So what are you waiting for?

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(Audio) How much attention do you pay to the biggest item in your books?

Today, we were lucky enough to have a meeting with one of the top HR experts in the country. The discussion centred on how poorly HR has been managed in small and medium enterprises, leaving it a sizeable contributor to business failure.

From an accounting perspective, what could be an explanation? Although there are many self-professed payroll experts, few have the experience and qualifications to consider themselves authorities on the issue. While many have a basic understanding of the relevant software, most fail to grasp the full implications of compliance with payroll systems and the subsequent transactions. Some business owners choose to forget experts altogether and attempt to manage their payroll themselves, usually using outdated and flawed methods. Alternatively, a few accounting and bookkeeping provide payroll services, but these tend to solely give out advice, leaving the actual process to business owners or their contractors.

HR and Payroll are immense problems that have been attracted very little attention from business owners. Believe it or not, we are currently looking after over 300 sets of books from businesses ranging from $50,000 to $20 million per annum and the biggest expense in their books is always salary and wages. Think back - if you spent 40-60% of your budget to salary and wages, how much did you really invest to make sure that it was managed properly? In our opinion, at least 1% of salary and wages should be invested HR, and a further 1% should go to payroll processing and compliance management. So if you have 10 employees receiving a salary package of $100,000 per year, you should put aside $10,000 for HR and $10,000 for payroll management, so as to ensure you are not only legally covered but also getting the best return on your biggest investment!

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(Audio) Cloud accounting is the past, so what will be the future?

In 2009, we were first introduced to cloud accounting, which was web browser accounting software like Xero. We really like it and strongly believe that it will be the future! 10 years into this technology and changes, we think Cloud accounting might not be the future anymore, even though there are still businesses and accountants who are still scare away from the Clouds.

So what should be the next?

We predict the future of accounting software in general to be more decentralised. Each business, each user will be using very different software. Accounting functions also will be varied in different area of business.

We think that cloud accounting will actually disappear in SMEs. The SMEs would be able to employ simpler business applications to manage some parts of their accounting function. The applications would be able to process financial data for management and compliance purposes.

Let’s pick an example of a coffee shop business:

Jane is a coffee shop owner. She is using multiple business applications to auto-feed her financial data into accounting software. It could be Xero or Intuit QuickBooks.

In the future, Jane might not need a cloud accounting software to manage all complicated accounting transactions since her business applications could be able to do just what Xero or Intuit QuickBooks is capable for.

Point of Sales (POS) application should be good enough to produce a comprehensive sale reports for Jane to keep track of her financial sale performance. POS could also be able to integrate to the ATO database so ATO could collect GST and tax information instantly.

HR application could be able to handle all core payroll function from on boarding, timesheet, rostering, leave, payroll, payment summaries, and superannuation to reporting to the ATO.  There might not be a need for Jane to integrate from HR to any accounting system. The list then goes on to all other areas of their business: Bill management; Inventory; Asset management…

What about bigger guys in town?

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(Audio) Improving Xero performance to utilize all current and new functions

 

Congratulations to Xero and their team for reaching the 1M subscriber milestone just a few months ago!

From day one, we have been a big supporter of Xero, even back when MYOB and QuickBooks were the flavour of the months. Xero is a markedly successful New-Zealand start-up currently going global. Already, it has offices located around the world and over 1,800 staff members. The product has been reported as a highly effective financial planning tool, providing an innovative accounting service that will not only change the way accountants work but also how businesses perform.

Every year, our team has attended XEROCON, the annual Xero conference in Australia. There were over 2,000 accountants and bookkeepers at the last annual gathering, all eager to witness how much Xero can offer to accountants and business owners to facilitate their professional structure.

The changes Xero has undergone, with its rapid level of improvement and innovation, mean that the product is truly unique from other available services. Nonetheless, there are still business owners believing that there are only limited differences in subscribing to Xero over other accounting software.

In the past few months, we have seen many business owners either DIY their Xero setup or getting experienced bookkeepers to do the setup for them, with problematic results. Some attempt to use Xero as they were previously using MYOB or Excel.  Bills, hours worked and invoices were entered manually one by one to Xero after they got paid, simply for the purpose of record keeping and tax. Reports were done in Excel manually; Xero was only used to get data collected during the quarter. Super was still getting paid manually by using Super Clearing House, even though Xero can almost automate this process. These are only a few examples of how Xero was being used at a below optimal level.

It is sad to see what these business owners were doing- essentially, they were fuelling their electric cars with petrol! Hence, the efficiency of Xero usage was only at about 20%! Our role is to explain the benefits and services of Xero (not just with accounting) and demonstrate how to get Xero to collaborate with other software to ensure all information is synched together. These improvements can transform business structure and maximise both efficiency and profitability.

Here are few tips of utilising Xero:

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New Feature Review - Exploring Xero Projects (Part 1)

If you are part of a business that still manually tracks hours and costs or manages professional projects using as spreadsheet, thenyou should most definitely read on. Currently, many companies continue to coordinate projects usingpaper or spreadsheet tools, whichcan cause problems. These can include:

  • Limited Access and Lack of Visibility: Limitations of data visibility can inhibit your overall perspective of the projects. It is also very difficult to see the status of projects, meaning external communication with employees are constantly needed to coordinate the work.
  • Duplication: Sometimes, information must be re-submitted multiple times in traditional spreadsheets if auto-filling is not possible. This can be time consuming and lead to mistakes.
  • Loss of Data: Since the software does not interact with employees in real time, it may result in loss of data.Some inputs or outputs may not be included in the record, which can lead to worryingly inaccurate data being collected.

Luckily, there is a solution. Xero recently introduced a new feature called ‘Xero Projects’ which is fully integrated with Xero to provide an interactive project management tool. It works with new, on-going or archived projects to solve all the issues detailed above, whilst maximising profitability and efficiency. It is essential for business owners and managers to easily identify the projects that deliver the best return on investments, as well as those that may need restructuring. Xero Projects provides a simple platform to assist in meeting these goals.

For businesses undertaking complex projects, good project management software is undeniably essential. Smaller businesses, however, may be more reluctant to invest in a formal accounting software program. In an effort to reduce costs, businesses owners continue to waste hours of their precious time on managing these projects manually. It is important to understand that having a simple way to capture, track and report the time and money spent on each job allows owners to proactively invoice, make informed decisions and manage the projects more efficiently. This will ultimately lead to higher profitability and increase understanding of your finances. Further, it helps to streamline the workflow and be a great asset to the business without adding unnecessary complexity.

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Exploring your Business Digital Assistants

Once upon a time, mobile phones were simply considered Personal Digital Assistants (PDAs). With the advancement of technology, we now have smart phones able to assist with many other activities, both personal and professional. It is, then, not surprising that many business owners call their phones Business Digital Assistants – BDAs. It is increasingly popular nowadays for entrepreneurs to enlist the help of mobile apps to increase productivity.

Business owners can also use apps to help run their business more smoothly. This is a perfect solution for small and medium businesses who have limited funds to spend on administrative costs, such as personal assistants or fancy accounting systems.

Let’s look at a case study showing how a small business can adapt to new mobile technology.

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Software for Healthcare and Special Care Start-ups: Choose XERO

With only a few accounting software options on the market, it seems healthcare and special care industry start-ups under NDIS have only two options to choose between: MYOB or XERO. However, NDIS-related services can be complicated, and the two systems are not necessarily equal in terms of their benefit to users. Given your limited budget as a start-up business, you might want to learn more about these two software options before making your choice.

Here is Tailored Accounts’ take in the issue. 

Comparing MYOB with XERO is like ranking Taxi Services against Uber. XERO creates a community of accountants, bookkeepers, application developers, and business owners, where ideas are exchangeable. It acts as a platform that can facilitate communication between those in the industry. MYOB is trying to follow in their footsteps; however, XERO is still the market leader for three reasons.

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Reconciliation of Your Payment Summaries

The six important steps of payment summary reconciliation that employers often overlook. 

Payment summaries generation is a simple task, however the back end reconciliation does take half to a day of work. Here are list of 6 STEPS that our staff have to go through to ensure that your payment summaries are faultless!

1. Reconcile all staff payslips in the past 12 months with BASs submitted to ATO during the year. Incorrect payment summaries is the biggest trigger to an ATO tax audit...we understand how important it is to ensure our data is perfectly matched with ATO data;

2. Reconcile all staff payslips information: Gross Salary, PAYG withholding, FBT, Super payable, Salary sacrifice, Termination pays. A full reconciliation between payroll report vs General Ledgers are conducted for the full year to ensure your staff pays are agree with what coded into your accounting software for the last 12 months; 

3. Once ATO = Pay summaries = General Ledger (debit/credit), our staff will print payment summaries and re-check them with employee payroll setup to ensure their pays are in line with their contract/award;


4. Payment summaries to be email to business owner/HR manager/CEO to check before we email to your staff;

5. Payment summaries to be emailed to staff before 14th July;

6. After 1 week from sending staff payment summaries, if we don't need to do any amendment, we will send Annual Payment Summaries to ATO before the DUE DATE 14th August.

 

 

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What can XERO tell us about leadership (Part 2)

Fuzuki Nishimura

XERO entered Australian accounting software market seven years ago. They used to be a boutique-sized business; however, they brought a disruptive innovation that has changed the landscape of accounting industry. Software used to be installed in our computers; and accounting data were handled mostly offline from our desktops. When XERO came out, we just loved it. It allows us to access data from multiple devices. Our clients could now enjoy seeing financial reports from their mobile devices.

                                                                         

Many of our clients love XERO because it is highly customised to their business needs. A grocery owner, who has been our client for more than four years, shared with me that XERO was the best software to handle hundreds of transactions and still able to generate real-time report. That is the reason clients choose to subscribe and stay using XERO for long term.

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What can XERO tell us about Leadership? (Part 1)

Harry Hoang

Coming back from XEROCON SOUTH in Brisbane, I kept asking myself about what have we learnt from the event. In the past, we tried to figure out the most suitable accounting software for our business and clients. XERO was the best choice. When at XEROCON SOUTH and talking to my colleagues, I realised that XERO is embarking in a leadership position in cloud accounting, which has never been taken by other big players.

I was keep asking myself about what we have gotten from the event. I asked staff to write few words about their personal feeling so we can consolidate to a good article for B2B this month. Personally, as a CEO of an accounting practice, I am thinking more about the direction, the leadership of the accounting industry in which XERO play a very important part of the Eco system. 10 years ago we all know that MYOB, QuickBooks are the most popular accounting software for SMEs and Accountants.

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ATO Announcement: PAYG Tax Tables Changes by 1 October 2016

Dear customers,

Please be informed that PAYG Tax Tables will be updated to reflect all the changes by Saturday, 1 October 2016. Details of the changes could be accessed HERE

Image result for 1 october 2016

We encourage you to stay updated from the changes. XERO system will be updated accordingly as per the PAYG tax change. Should you have questions regarding the change, please contact us at  02 6169 5196. Our accountants will assist you with the information. 

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The “love story" between accountants and bookkeepers

Most people assume that bookkeepers and accountants get along very well―both share common goals and contribute to the long-term financial success of businesses and clients. The reality, however, is they tend not to share a lot of information with one another. Few weeks ago, a new customer asked us if we do tax preparation and lodging as he didn’t want to deal with too many parties (i.e. bookkeeper and accountant). I explained to him that bookkeepers and accountants work together as a team because they each have different skill sets and make up different stages of the financial cycle.

Before engaging us as their bookkeepers, some of my customers have previously requested for their accountants to perform both bookkeeping and accounting for them. While many hope that their accountants can be “one-stop shops” for their financial needs, many realise that their accountants don’t offer bookkeeping services. So, should bookkeepers and accountants compete with one another, or should they cooperate with one another? Based on my past experiences dealing with business owners, clients, and accounting firms, I think that bookkeepers and accountants should dance around with each other to realise the best possible outcomes for their clients.

But why are such harmonious and effective relationship shard to achieve most of the time? In my opinion, the problem lies with both accountants and bookkeepers.

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End of Financial Year Note

Most business owners do not know that the SME sector in Australia has wasted millions of dollars due to inefficient cost, most of which can be attributed to the complex bookkeeping process. As the financial year is coming to an end, here is a guide to help business owners save the unnecessary cost and improve the company performance in a period when financial management is very much needed.

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To improve the existing financial management process, you will first have to evaluate the system. Take a minute and think about how you control your financial process right now. Most SMEs have the same mistakes listed below:

  • They fail to realise how important financial management is. Businesses with poor financial management tend to suffer from poor cash flow and profit margins, ineffective debtor control, and an inability to meet their business’ commitments;

  • They are unaware of alternative solutions such as hiring an accountant or implementing an accounting system. If crunching the numbers is not your strength, either hire or outsource to an accountant or bookkeeper who will deliver regular and reliable information and advice that you can use to manage your financial position;

  • While many businesses are in the field of IT, it is surprising how backward their accounting systems are. Stacks of receipts, manual ledger books, simple Excel sheets, messy financial transactions and reports, and overdue BAS and tax returns are common among start-ups with bad financial management;

  • Businesses owners tend to focus on their products, ideas, and clients, often neglecting the fundamentals of their business. I have never seen a successful business that does not have strong financial management.


As a matter of fact, most people fails to realize their mistakes until it’s too late. If you are a small business, it is highly likely that you need to do everything to manage your business, from administration, marketing to bookkeeping. It is seemingly running well and you believe you are able to manage it until the end of financial year approaches. One client shared with us that EOFY used to be her nightmare and she was always lost with massive paperwork. Only until the end of financial year does your disorganized bookkeeping system come back to bite you. To avoid this scenario, though, here is the EOFY to-do list from our executive director.

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Tailored Accounts - A Xero Expert

Xero is beautiful online accounting software for small business. With Xero, business owners will have real time online financial updates anywhere, anytime on your Mac, PC, table or mobile. Tailored Accounts is proud to be a Xero expert. We are Xero Gold Partner, Certified Advisor and recently become the sole Xero Cloud Integrator in Canberra.

Xero Authorised Integrator in Canberra

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What you could learn from Xero Roadshow 2016

The February Roadshow is the the first official event of Xero in 2016. Xero Roadshow came to Canberra on 4th February and attracted hundreds of local accountants, bookkeepers and entrepreneurs. Tailored Accounts team was one of them. Apart from amazing food, the Roadshow also gave plenty food for the brain. Here are what we have brought back from the event.

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Quick time entry in Practice Manager from Xero

As an outsourced bookkeeping services provider charging clients hourly (and of course, guarantee all jobs are completed at possibly highest standard), Tailored Accounts pays great attention on time tracking. It is time consuming for Tailored Accounts (and for any accounting practice) to record time accurately (but we need to do that for better performance management and billing clients).

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Why did we move to cloud accounting?

Cloud accounting makes business more efficient

Why did we move to Xero? Because of the software’s outstanding features? Because of benefits from the partner program? They are all correct. But the ultimate “because” was “because we wanted to be our clients’ choice”. Clients are always the motivation for all our innovations. One of the best innovations we made was converting the system to Xero – cloud accounting system. 

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Accelerating cashflow with Online Quotes

When we released Quotes in January, we let you know that we were going to continue to add to this feature. The initial release was the start of a journey, not the end.

Over the past few months we’ve continued to monitor your feedback in our Community and have added new features to Quotes in each release. With this week’s release, we’re pleased to give you Online Quotes.

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Xero - Clould Accounting For The Future

By Harry Hoang

Reprinted from B2B Magazine

Xero certified partner

As this is the last article of 2014, I will try to sum up what I have written for B2B during the past 6 months. I have introduced XERO – the world’s leading cloud accounting application along with its ecosystem which allows businesses to operate with their browsers instead of their desktops. I still remember this day 5 years ago when the IT technical support officer came to my office to install updates for my company’s server and computers. We ended up with 3 non-operating days due to a range of issues – bugs, non-alignment between the “old” and “new” updates, and conflicting dependencies. Technology will continue to evolve with added features, hence there are more reasons why companies should embrace cloud accounting.

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Xero Touch in one touch

The mobile team here at Xero is very pleased to announce that we have just released Touch ID for iOS! Thereby putting your business at your literal fingertips. This has been quite a long time in the making, with Layton having first knocked together a prototype at WWDC back in July. That caused quite a bit of excitement internally:

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Using mobile applications to run your business

In my last two columns, I introduced you to two of my favourite mobile applications – Xero and Receipt Bank. I use them on a daily basis and consider them to be part and parcel of my business. The growth in use of mobile devices has led to an explosion in the development of mobile applications. Small-to-medium businesses are using these applications to improve their processes and help their customers, while others have jumped on the bandwagon to develop their own applications for their staff to use or to sell as a product.

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Xero Gold Partner

We are thrilled to announce that Tailored Accounts became a certified GOLD Partner of Xero in May 2014. We are one of only three Xero Gold Partners in ACT. Our partnership with Xero lets our clients get the most of our expertise and experience. 

Tailored Accounts as Xero Gold Partner in Canberra

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Files On The Run: Xero Touch For iOS

Xero Touch for iOS has now been updated to give you access to your files from your mobile device.

Xero touch for iOS

Files for Xero was released back in October and was a game changer, allowing you to attach source documents to transactions, giving you a full picture of your financial data and supporting materials all in one place.

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Purchase Orders: How this Xero function would help businesses.

Xero just moved a step closer to completing the remaining core accounting functions.

Businesses now can create, send and manage Purchase Orders in Xero. This function will help put any businesses in control of purchasing from your suppliers, so you both know exactly what’s been ordered, the agreed cost, and when and where it should be delivered.

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