In an era where accounting software is becoming increasingly sophisticated, many companies are wondering whether it is still necessary to work with an accountant, or if it’s possible to do all the accounts in-house using Xero. After all, if you are already spending £40- £70+ on Xero subscriptions each month, do you really need to outlay more paying for accountancy services? As it approaches its 30th birthday, Xero is one of the most reliable and dependable accountancy software solutions on the market. But can it completely displace the role of an accountant? Read on for our opinion.
If It’s A Tool, Use It
Perhaps the most important thing to understand about accounting software is that it is a tool that is designed to be used by people. The purpose of programs such as Xero is to reduce the intensive, repetitive labour that many SME owners and finance teams perform. By doing this, it frees up crucial time for critical tasks. However, the Xero platform, on its own, doesn’t provide any strategic insights, and doesn’t replace the role of an experienced accountant in helping you plan your cash flow, investments, and tax liabilities. Many SMEs use Xero alongside an experienced chartered accountant for the best of both worlds – a streamlined bookkeeping system and expert advice when needed.
Using Xero
Xero has a strong reputation for supporting SMEs. However, many companies report several challenges. These mostly stem from the fact that Xero is so in-depth that it can be highly complex to use and learn. As such, many users don’t do more than scratch the surface with Xero, and unless you are familiar with the platform and with financial management more generally, it is possible to make errors. Consequently, even with Xero’s impressive suite of automation tools and integrations, some organisations still waste valuable time in their accounting. This is one of the reasons why working with a professional chartered accountant can be so useful. As Xero experts, we understand the full range of tools that Xero offers, and have the time to maximise the opportunities of the software on your behalf.
Calculations Of Taxation
Xero is an excellent platform for collating and submitting a range of tax returns to HMRC, including Payroll reports, Corporation Tax, and VAT, recording expenses and making complex tax calculations. However, setting up the software to do this accurately can be complicated. For SMEs, valuable time can be lost penetrating the multiple layers of the platform. Additionally, if it is not set-up correctly, Xero will potentially provide inaccurate results. As such, it can be highly beneficial to ask a Xero expert to manage this part of the process.
Maximising The Benefits
One of the most attractive features of Xero is that it is packed with native tools and optional third-party plugins. Core functions include bank reconciliation, invoicing, and expense tracking, all of which can greatly enhance organisational agility, flexibility, and resilience. Additional functions such as tracking the time, expenditure, and progress of projects can increase project accuracy, while contact management is a powerful tool for building and maintaining business relationships. However, unlocking these additional features requires time and effort, and optimising them can require expert insight.
Find Out More
When Xero is optimised, it is fantastic accounting platform which can be a valuable asset for your business. The key is to get the balance right. At Vanilla Accounting, we can use our experience to help you get the most out of your investment. To learn more, please contact one of our experienced team today.
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