Tools of the trade: Xero Accounting System

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xero_dashboardby Dr John Mamutil, Orthodontist, Castle Hill, NSW

I wanted to improve the way I managed my quarterly BAS [business activity statement]. I was spending about four-to-five hours at the end of every quarter downloading bank statements then categorising each entry. I tested virtually every major cloud-based accounting package including QuickBook and after doing a QuickBook Xero comparison, I finally settled on Xero. It’s a fantastic program.

What’s good about it

Xero is a cloud-based program so you have access to it from any location. You could be on holidays and still pay your staff and check your financials.

When I’m putting together my BAS, every transaction line in my bank account needs to be categorised, whether it’s wages, advertising, equipment, rent or whatever. Xero can pick up certain keywords and automatically categorise all those transactions.

At the end of the year, I can do a comparison for, say, outgoings on wages to actual takings for the practice. Xero easily creates a snapshot of the actual spending in any particular category. In other words, it shows you what your profitability is like.

Xero has a bank feed that downloads all the data automatically. I give it a quick visual check to make sure everything is fine and then transfer it to the ledger. Certain categories can be marked to have GST applied.

You can also allow other users into your account with restricted access. At tax time, I just give my accountant a log-in and he puts together my tax return with that information. It’s very convenient.

What’s not so good

Nothing. Xero is one of those rare products where I can’t see a negative. On the rare occasions when I have found something that Xero could not do, there are third-party programs that are completely compatible. In fact they have a friendly API [application programming interface] that allows me to hook in my own plug-ins. The Xero site also has a large community where just about any question can be answered.

Where did you get it

Online at www.xero.com.

 

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