Many companies have started using cloud-based accounting software for their business with at least the following capabilities:
- Recurring invoices
- Multi-currency capability
- Tax capabilities
- Automatic payment reminders
- Financial reports
- Live bank feeds
- Inventory management
- Sales tax capabilities
- Estimates and quotes
- Capabilities to import and export data/reports
- Automatic transaction importing
- Financial projects (and/or task) management
Besides getting accounting services from a reputable agency, you also will need an accounting software which can match the accounting principles/methods that you are similar and are using. For instance, cash-based accounting actually records income only when your products/services are paid for. But in accrual accounting, it records income when products/services are incurred. For example, when you send an invoice on 10th January 10 and get paid on 10th February, when you count the payment as income for February, then you are using cash-based accounting.
The Xero software is an accounting software which is ideal for small-to-mid sized businesses, or a business who is looking for scalable accounting software that can grow together with the company. It is a very robust solution that is up to par with leaders such as Quickbooks in terms of capability. Xero has become very popular in recent years and it can integrate with more than 500 third-party apps. This has greatly enhanced its capabilities to deal with sometimes more than just accounting problems.
Xero uses double entry accounting and does support both cash-based and accrual accounting. It offers features including accounts payable, a chart of accounts, bank reconciliation, and many accounting reports.
Here are a few things to know about Xero.
The software is cloud-based and can be accessed through web browsers on your computer. It is compatible to browsers including Google Chrome, Internet Explorer 11, Microsoft Edge, Mozilla Firefox, and Safari 8 or higher. On mobile phones (i.e. Android and iPhone), you can use the Android app and iPhone app of Xero.
Xero can send automatic payment reminders on past due invoices, and the reminder setting applies to all customers. The software will send a reminder to customers at 7 days past due.
Xero does not only send invoices, but helps tracking receivables.
Payment processing with Xero requires signing up for an external provider, such as Stripe or PayPal.
Paying a new bill is simple in Xero. The expense payment form includes standard fields such as payee and due date. Expenses in Xero can be automated. Purchase orders may be converted to bills when they are fulfilled.
Xero provides the core financial statements (as reports) i.e. Profit and loss, balance sheet and cash flow. The reports are highly customizable. It is very easy to add columns, change account groupings, display time periods, and more.