Archive of ‘Bookkeeping’ category

Tutorial: How to Reconcile Your Bank Account in Xero

| Bookkeeping, Small Business

Tutorial: How to Reconcile Your Bank Account in Xero

You know that you need to reconcile your bank account in your Xero software, but you’re not sure how.

In this tutorial, I’ll give you a step-by-step process of how to reconcile your bank account.

4 Steps to Reconcile Your Bank Account in Xero

Step 1. Log in to your dashboard.

Step 2. Click the Accounts tab.

Step 3. Find the bank account / PayPal / credit card account and click on “Reconcile”. It will have state the number of transactions that need to be reconciled. For example “Reconcile 24 items”.

 

Step 4. You’ll see a list all of your bank statements on the left, and the Xero transactions on the right. If the right transaction is green, it means Xero has found a match with either an invoice or bill. You can click the “OK” between the two and match it.

 

 

TIP: Even though Xero will try to match your items, it sometimes get it wrong or doesn’t find a match at all. Read on to find out how to reconcile those special situations.

What to Do When Xero Doesn’t Find a Match

Step 1. Use the find and match feature by clicking on the last tab of the transaction box “Find and Match”.

Sometimes Xero finds multiple transactions with the same amount. For example, multiple invoices or bills with the same gross amount. When you click on Find and Match, a list of all unpaid invoices or bills will be shown by date which you can then match to the right bank transaction.

Step 2. Another situation can happen where a bill wasn’t paid to the correct amount and perhaps is missing a few cents to a few dollars. True story! Xero won’t know that and can’t match it. To find it, click on “Find and Match”, find the bill, and scroll down to “+Adjustments” and choose Minor Adjustment.

TIP: Don’t confuse this with an underpayment of an invoice – credit notes are used for when invoices are not paid to the correct amount.

TIP: You can also include bank fees in the “+Adjustments”

If you need to split the amount between different invoices, you can do that using the split transaction feature. Xero will automatically suggest a balance to split.

Step 3. If you received money for two invoices, in one payment, then you can click on “Find and Match”, find the two invoices, and click on both of them to reconcile the payment. The two amounts need to be equal to the payment for the transaction to turn green and click “ok” as usual.

Step 4. Lastly, you can have partial payments towards invoices and bills, and may have to “split” the invoice to match the payments. In the “Find and match” tab, if you have an invoice with a partial payment, click on “split” and Xero will split the amount to match the bank statement you are working on trying to reconcile.

 

 

 

 

 

What to Do When Your Transaction Isn’t in Xero

What do you do if the transaction hasn’t already been posted to your general ledger?

Step 1. Click the Create tab button.

Step 2. Type the name of transaction that shows up on the bank statement ie “Facebook ,Inc” (WHO) and name the account (what) “Advertising”. You can also add details, and receipts to the transaction. Many bank fees, or interest fees usually get “created”, because they only show up on bank statements. (you don’t get receipts for bank fees or interest paid on savings accounts).

 

Step 3. You can upload files, like receipts, to the transaction.

What do you use the Cash Coding tab for?

The cash coding tab is a more condensed view of your unreconciled transactions. You should only use this after you reconcile transactions using the Reconcile tab.

Once you do that, you can group similar transactions and reconcile them in bulk.

DIY Bookkeeping Takes Time

Learning the technical details of how to organize your books takes time, so if you’re confused or frustrated, I understand. It’s not easy. If you’re at a point where you’re too busy to learn these details and manage your own books, it might be time for you to hire a bookkeeper. Click here to read more about how I can help you.

 

 

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Quick – did you reconcile your bank account this month?

| Bookkeeping, Business, Business Basics, Small Business

Quick - did you reconcile your bank account this month?

Before I jump into the nitty-gritty of bank reconciliation, I want to tell you that it’s helpful to think of reconciling your bank account like a game.

Your goal is to make sure all of the transactions that happened in your bank account are also shown in your bookkeeping software, like Xero or WaveApps.

In short, you want everything to match, or balance, like your bookkeeper or accountant might say.

Why?

Because expenses and income that don’t show up can’t be claimed, or in other words, can’t be used for deductions.

That would throw off your taxes and potentially force you to pay for more than you owe. Not okay.

To avoid this, we reconcile our bank accounts. We make sure that no transaction falls through the cracks. And if something does? We become the Sherlock Holmes of bank transactions. (I know, cheesy. I couldn’t help myself.)

If everything is connected — your bank account, PayPal, Etsy, invoice software, and bookkeeping software — why might a transaction not show up? Good question.

Here are a few common reasons that your bank balance might not match your bookkeeping software records.

Common Reasons for Inaccurate Bookkeeping Records

1. Tech isn’t perfect, so sometimes transactions don’t show up when your banking website is down.

2. You’re getting double transactions from Etsy.

3. You’re getting double transactions from PayPal.

4. You’re getting double transactions from the deposit from your invoice and the invoice software.

Now, if you haven’t been reconciling your bank account, what are you supposed to do now?

First thing’s first: every software has a different way of reconciling a bank account.

In WaveApps, for example, it’s called Verify. In Xero, it’s called “reconciling” and you simply push a button that says “OK”.

I recommend doing this reconciliation process once a month to keep your books up to date and organized. If you wait any longer, you risk losing track of receipt or forgetting what a specific expense was. You’ll also have a better chance of getting paid sooner if you’re able to catch what invoices are still outstanding.

If you’re not sure what to do to keep your bookkeeping organized on a regular basis, I recommend downloading this FREE checklist: Weekly Bookkeeping Checklist for Bosses. It’s perfect for the DIY business owner who wants to keep her business healthy and make the most of her money. Click here to download it.

All of the above, though, might make sense in theory, but I’m sure you’re still wondering how you actually do it.

That’s why, in the next couple of posts, I’m going to show you step-by-step tutorials of how to reconcile your bank accounts using Xero and WaveApps. 🙂

Have questions for now or want me to do a tutorial using your bookkeeping software? Leave them in the comments below!

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3 Alternatives to Keeping Your Receipts in a Shoebox

| Bookkeeping, Small Business, Taxes

Alternatives to Keeping Your Receipts in a Shoebox

One receipt laying on your desk is not so bad, but 127 receipts from the past six months? Yeah, that takes up a liiiiitle more space.

This applies to digital clutter, too. If you keep all of your digital receipts and invoices in your email inbox, I’m looking at you.

So, if you’re having trouble figuring out how to organize your receipts so you’re not scrambling again at tax season and spending hours inputting data, I have some suggestions.

Here are 3 alternatives to keeping your receipts in shoeboxes, on countertops, and in your wallet.

3 Online Tools for Organizing Your Business Receipts

1) Shoeboxed

Unlike what the name suggests, this app does not help you keep your receipts in a shoebox. It does, however, provide a smart way for you to scan in your receipts and organize them online.

Once you download the app to your phone, you’ll be able to save images of receipts. Other cool things you can do with Shoeboxed?

  • Organize invoices
  • Track your mileage
  • Save business cards
  • Archive receipts from Gmail
  • Create expense reports

If you’d rather not scan in the receipts yourself, you can send them in using what they call a “magic envelope”.

Here’s what I like about it: So many things. The scanning process takes all of the data into the system for you, so there’s no data entry required from you. I like that it integrates with the accounting software that I use, like Xero and WaveApps. (They also integrate with Quickbooks, Evernote, and a variety of other tools.) I also really like that all of the data is verified by a real human being. That means there is less room for tech bugs getting in the way and messing up data about your expenses. Oh, and once the info is in the system, you can search all of it by entering keywords.

Here’s what I think could be better: A couple things. Shoeboxed doesn’t automatically integrate with Freshbooks. You have to download the csv file and upload it to Freshbooks, which adds another admin task to your plate.

Price: between $15 – $69 per month

Free Trial: Yep! 30 days.

Multicurrency: Yes.

Founded in: 2007

2) Receipt Bank

Receipt Bank is a tool that’s geared toward accountants and bookkeepers who are managing their clients’ receipts.

You can upload receipts via a mobile app, through email, or by uploading them directly from your computer. Plus, they accept all kinds of file types — jpg, png, doc, pdf, tiff, zip, etc.

From there, their software takes the data from your documents, inputs it, and categorizes it in the cloud.

What I like about it: It integrates with Dropbox, Xero, and Freshbooks, and I like the easy setup.

What I think they could do better: You have to review all of the data inputted to make sure it’s been coded correctly, which is more likely since it’s not reviewed by a member of the Receipt Bank team. It doesn’t integrate with WaveApps or Zoho Books. Finally, I ended up moving from Receipt Bank to Hubdoc because I needed the ability to take bank statements.

Price: between $25 – $55 per month

Free Trial: Yep! 14 days.

Multicurrency: Yes.

Founded in: 2010

3) Evernote

If you’re looking for a free solution to receipt organization, you can use a workaround with the app Evernote.

All you have to do is create a notebook for receipts, take a picture of the receipt using their photo capability in the app, and then add some text to the note.

Then, if you want to find the receipt in the future, you can search for it using Evernote’s full-text search feature.

What I like about it: You can clip receipts from your email using Evernote’s web clipper, and you can search for text inside the images, which is pretty cool.

What I don’t like about this solution: You still have to input data into your bookkeeping software. It’s not great for companies that are handling a lot of transactions because the data entry will pile up. I’d recommend using something more robust like the tools above or Hubdoc.

Price: FREE up to 1gb of data.

Have questions about other receipt organization apps? Let me know in the comments below.

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Weekly Bookkeeping Checklist for Bosses

| Bookkeeping, Business, Small Business

Weekly Bookkeeping Checklist for Bosses

Bookkeeping is not the most glamorous component of running a business. I know, BIG surprise. Typically, it’s way more interesting to learn about sales, marketing, or money mindset.

And then I read statistics like “1 in 4 businesses don’t make it past their first year,” and it stops me right in my tracks.

If there’s so much information available on how to run and grow a business, why are 25% of them not making it to month 13?

Research has shown that it’s because of money. And not just money on its own but how the business owner manages the money.

When I talk to entrepreneurs about doing their own bookkeeping, the first thing they’ll tell me is that they don’t know what to do. They’re already so slammed with things to do that figuring out bookkeeping — especially when it’s not urgent — falls to the bottom of their priority lists.

But, every single of them, remembers how important it is to keep track of your money riiiight around tax season.

So the problem is NOT that they don’t want to manage their money responsibly — it’s that they don’t know how to.

That’s why I created this one-page resource for you called: Weekly Bookkeeping Checklist for Bosses.

You can check off these tasks once a week and it should take you no more than 30 minutes to do so once you get into the routine.

Download it here to stop worrying about being ready for tax season or if you’re doing what you need to with your money.

You can use it both if you handle your own bookkeeping or if you work with an accountant / bookkeeper already.

Happy Bookkeeping!

If you have questions about how to use it, comment below or send me a message.

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3 Money Reports Smart Entrepreneurs Need to Read Every Month

| Bookkeeping, Business Basics, Finances, Small Business

3 Money Reports Smart Entrepreneurs Need to Read Every Month

You’re finally using a cloud-based bookkeeping software to keep track of your money. While it’s added a lot of ease to your system, it might also be confusing to figure out what you need to pay attention to within the software.

And more importantly, what can you use to help you make financial decisions that help instead of hurt your business?

There are three reports that I think every smart entrepreneur needs to read on a monthly basis.

If you’re allergic to numbers, don’t worry! I’ll make sure you understand what’s most important on each of these reports so you’re only focusing on what matters.

3 Financial Reports to Read Monthly

1) Income Report (Profit and Loss)

Basically, this report gives you an overview of how profitable your business is based on what you’ve earned and what you’ve spent. It represents a period of time, unlike a balance sheet, which shows a specific point in time.

The lines you’ll see on an income report in WaveApps, for example, are:

  • Revenue – How much money came into your business and from what sources
  • Cost of Goods Sold – If you manufacture products, this could be manufacturing costs and labor. If you’re an online business, this is usually merchant fees.
  • Gross Profit (aka Margin) – This is what’s left over after your the cost of your goods sold.
  • Operating Expenses – This is all of your other expenses, like admin, software, travel, etc.
  • Net Profit – How much your business made after expenses

2) Sales tax report

First, in Canada, this is important for businesses that make over $30,000 in a single quarter or within a year, whichever comes first.

Second, sales tax shouldn’t be confused with income tax. It’s like how the tax is included in the price when you buy gas.

The point, though, is that as a small business owner, you are now responsible to give back, or remit, the tax charged on your sales to the government.

This report helps you understand what you owe.

3) Balance Sheet (aka Statement of Financial Position)

This statement answers these two questions:

  • How much does my company OWN?
  • How much does my company OWE?

In short, it gives you a more detailed view into how your business is doing financially at one point in time. It’s typically reviewed at the end of a month, quarter, or year. Or all three. 🙂

On the report, you’ll see:

  • Assets (aka debits) – Value that your company owns, e.g. cash, inventory, etc.
  • Liabilities (aka credits) – What your company owes to others, e.g. mortgage, credit card debt, payment for assets
  • Shareholder equity – Net worth of your company, which is what’s left over after all your debts have been paid

Bonus: Trial Balance Report

This is a bonus since it’s mostly used by bookkeepers and accountants. A trial balance statement gives the current account balance in your bookkeeping, which is used for creating financial reports at the end of the year.

Before we had computers, you’d have to create this first before checking any other reports.

Now, however, it’s primarily used for double checking if your computer program has calculated everything properly.

Its purpose? It makes it easy to see all of your account balances for a specific date. It also helps when switching from one accounting program to another because when starting a new program, you need to enter all the correct balances of each account on the date you switch over.

Your financial reports are only as accurate as your books are organized, so if you’re behind on inputting data or categorizing transactions, your numbers won’t be telling you the truth. If you need help getting your books in order, especially before the busy tax season arrives, click here to get in touch with me. 🙂

Have a question? Leave it in the comments below!

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Save More Money in Your Online Business by Doing This

| Bookkeeping, Finances, Small Business

Save More Money in Your Online Business by Doing This

You’ll hear a lot of advice around making more money in your business, but how often do we talk about the ways we can save more?

Money is a hot-button topic for many people, and they’ll often ignore it until it’s no longer possible to ignore. (Cough, tax season seems to be a popular time to remember to get your money organized.) By doing so, they leave money on the table.

What’s even more unfortunate is that they don’t know how their business is truly performing throughout the year. Income does NOT always equal profit, and they can’t make smart shifts if they don’t know what’s going on financially.

But let me get off my soapbox and get back to how you can save more money in your business. 🙂

Beyond the more obvious solutions of spending less or creating a budget, what else could you do to save money?

I have just one solution for you: Keep your bookkeeping organized.

Accounting and bookkeeping can be boring, I get it. It’s far less exciting than marketing or hosting a retreat for your clients, but it’s 100% necessary.

And since it’s never going away, you might as well get your bookkeeping system in place so it helps you more than it hurts you.

Here are three of my top recommendations for organizing your bookkeeping.

3 Ways to Organize Your Bookkeeping

1) Go digital & jump in the cloud.

Long gone are the days where you had to keep a ledger with paper and pen, so do your business a favor by making sure that everything you spend and earn can be tracked digitally.

This is more than just keeping all of your expenses and income in a spreadsheet. It’s signing up and learning how to use some kind of cloud bookkeeping software, like WaveApps, Xero, or Zoho Books.

Do the same for your receipts. Don’t just leave them in a physical shoebox somewhere. Instead, go for a system that’s already set up to help you succeed, like the digital apps Shoeboxed or Hubdoc.

When you do this, you’re able to generate financial reports that show you how much you’re earning and spending. It also makes tax season so much more doable.

2) Schedule in a weekly “CEO Date”

The only way you’ll ever be able to make wiser financial decisions is by knowing what’s happening money-wise in your business as often as possible.

This is a concept that Lacey Craig mentioned in her Creative Money interview, and it was such a great reminder for everyone who wants to run a profitable business.

Some tasks that you could do during these “dates” are:

  • Checking your account balances
  • Check your pending transactions
  • Check your invoices to see which haven’t been paid
  • Pay yourself

(Not sure how much you should be paying yourself? Read this article.)

By having a CEO date, you keep a finger on the pulse of your finances and can be more proactive when it comes to saving for taxes or knowing exactly what you can afford to invest in.

3) Keep Your Business and Personal Finances Separate

The only way you’re going to be able to see an accurate picture of your business’s financial health is if you keep your business and personal finances separate. I’ve talked about this maaany times before, and it’s something I won’t ever stop saying. Get a business bank account as soon as possible.

When tax season rolls around, you won’t miss any expenses because there were too many irrelevant transactions to sort through. You’ll know exactly where your money went and be able to use those expenses to lower the amount of taxes you owe, thus saving you money.

Bonus: Hire a bookkeeper.

No matter how organized you are, there are going to be things that you won’t know about bookkeeping and what practices could save you money.

So, like so many business coaches recommend, you have to know when to delegate. That’s where bookkeepers, like me, come in.

We help you identify what’s important to pay attention to and take all of the nitty gritty stuff, like manually categorizing transactions, off your already full plate. If you’re interested in talking about what working with me as your bookkeeper might look like, get in touch with me here.

Have questions about how you can organize your bookkeeping? Leave a comment for me below or send me a message at lisa@lsbookkeeping.ca.

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Is Freshbooks Right for Your Business?

| Bookkeeping, Small Business

Is Freshbooks Right for Your Business?

“Client billing first and accounting second.”

That line from the website should give you a good idea of what the Freshbooks software is about.

Beyond being incredibly clear about what they’re best at, they also have a fantastic marketing team, so I’ll bet you heard about them from one of their many sponsors, like Being Boss, or from your favorite life coach.

Personally, I heard about it when I was looking for a recurring billing feature for my clients.

If you’re in the market for software, consider Freshbooks and then check out Xero, WaveApps, Kashoo, and Zoho Books, too.

Overview of Freshbooks

The first thing I want you to know about Freshbooks is that it’s not for everyone, and it’s not trying to be for everyone, which is its strength. Think of it as an add-on to a more powerful accounting and bookkeeping system.

In other words, it fills in the gaps that the big, robust tools don’t address, like automatic recurring billing.

And it’s a product made for service-based businesses, like coaches, copywriters, or designers, that, in the words of Freshbooks, “focuses on slaying the billing beast.”

Like all of the other tools I’ve reviewed, it’s cloud-based, which means that it’s online and all of your information is kept on the Internet as opposed to your computer. Expect to pay a monthly subscription between $15 and $50.

Is it easy to learn?

Since it’s made for people who are service-based (and many who consider themselves solopreneurs), the navigation is intuitive with many people saying that they created their first invoice as soon as they signed up.

Freshbooks is a growing company as well, so expect updates, which always means new features to learn and an updated interface to navigate.

What are the downsides?

There are a few downsides to using Freshbooks as a small business owner, and I’m going to break them down into two categories: light accounting and easy to forget to stop recurring billing,

1) Not standalone accounting software – Since the accounting features are so light with Freshbooks, it can’t be considered a standalone accounting software. That means you’ll have to pair it with something more robust like Wave (free), Xero (paid), Kashoo (paid), or Zoho Books (paid).

2) Easy to forget to stop recurring billing – While it’s very easy to delete a previous client’s profile to take them off auto-billing, it’s even easier to forget to do it if you’re not organized.

Why should I use it?

1) Automatic recurring billing – If you have clients you bill the same amount on a recurring basis, this feature will streamline payment. At whatever interval you choose, your client will be billed for the amount you both agreed on.

2) Can get by on your own without a professional – Since the software is so intuitive and made for service-providers, it’s easy enough to learn and get by on your own without an accountant or bookkeeper guiding the way.

3) Easily accessible library of information – If you’re confused, you have plenty of options for getting an answer with Freshbooks’

4) Contractor collaboration – There is also a light project management system you can use within Freshbooks for communicating with your contractors and tracking the time you spend on client projects. This helps you keep everything organized and ensures that your invoices are accurate.

Quick rundown of Freshbooks

  • Started doing business in: 2003
  • Based in: Toronto
  • Cost: Paid monthly subscription ($15 – $50)
  • Free trial: 30 days
    Credit card processing fees (via Stripe): For VISA/ MC: 2.9% of the transaction total + $0.30. For AMEX: 3.5% of the transaction total + $0.30
  • Automatic billing: Yes
  • Payroll available: No
  • Multicurrency: Yes
  • PayPal payment option: Yes
  • Etsy connection: Yes
  • Shoeboxed connection: No
  • Customized invoices: Yes
  • Mobile app: Yes
  • Option to collaborate with team members: Yes
  • Customer service: Email, chat, and phone

Still have questions about whether or not Freshbooks is right for you? Leave a comment below or send me a message.

 

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Is Kashoo Right for Your Business?

| Bookkeeping, Small Business

Is Kashoo Right for Your Business?

“Easy accounting software without the frustration.”

Kashoo knows that its biggest competitor is Quickbooks, which is why they mention it right on the homepage. You can do all of these things that you need… without using a complicated software like Quickbooks.

Now personally, I don’t use Quickbooks with my clients. I’m not saying that I’m against using the software. It’s just not my favorite.

So what makes Kashoo different, and are they telling the truth? Is it really easier to use?

Overview of Kashoo

Is Kashoo Right for Your Business?

Like the others, Kashoo is an online cloud-based accounting software, which means that it’s online and all of your information is kept on the Internet as opposed to your computer.

It’s one of those companies that make sure they infuse personality into their brand. This alone sets them apart from the competition.

Beyond that, they differ from tools like Xero, Freshbooks, WaveApps, and Zoho Books because their dashboard does not show the most recent financial information. Instead, when you login, you’ll be able to immediately input expenses / income not recorded from your connected bank accounts.

Expect to pay one monthly fee of $19.95, or you can pay annually for a discount.

Is it easy to learn?

Kashoo prides itself on being easy to setup and to learn.

They claim to have removed all accounting jargon, and they focus on the basics, like inputting expenses and income, sending invoices, and keeping track of project costs.

The reports feature is also very light, which may be a relief to some entrepreneurs but a burden to their accountants and bookkeepers. And something technical, but still important, to note. Kashoo only offers accrual accounting and not cash-based. What that means is that if you don’t know how your books are currently organized, ask an accountant to be sure.

Reports included are:

  • Income Statement
  • Unpaid Invoices
  • Unpaid Bills
  • Trial Balance
  • Balance Sheet
  • General Ledger
  • All Transactions
  • History

What are the downsides?

There are a few downsides to using Kashoo as a small business owner, and I’m going to break them down into three categories: no inventory and purchase ordering, inability to make estimates, and limited use of mobile app with multicurrency.

1) No inventory / purchase ordering – Unlike Zoho Books or Xero, you can’t keep track of how much of each item you have or request to purchase an item when its stock is low.

2) Can’t make estimates – Some agencies and freelancers need estimates to complete proposals. If that’s a big part of your business model, I would stay away from Kashoo and consider Zoho Books instead.

3) Can’t use iOs apps with multicurrency enabled – While Kashoo offers multicurrency, you can’t use your iPhone / iPad app when it’s enabled. Who knows why? It’s probably a glitch that will be fixed in the future.

Why should I use it?

1) Easy setup – You’ll be able to navigate the dashboard to set up your account and start sending invoices with Kashoo’s guided tutorial service.

2) Can get by on your own without a professional – Since the software is so intuitive and made for service-providers, it’s easy enough to learn and get by on your own without an accountant or bookkeeper guiding the way.

3) Track project costs and keeps records of clients / suppliers – If you’re a freelancer who needs to track your time along with project costs, this software could be great for keeping you organized. Plus, you can keep record of any clients or suppliers that you have.

4) Great customer service – Support is “forever-free,” and you can get a hold of the team by email, social media, chat, or phone. They also have fantastic resources for learning how to use Kashoo, like Kashoo U and these guides for how to get started.

Quick rundown of Kashoo

Started doing business in: 2008

Based in: Vancouver, BC, Canada

Cost: Paid monthly subscription ($19.95)

Free trial: 14 days
Credit card processing fees (via Stripe, BluePay, and Square): 2.9% + 30 cents

Automatic billing: No

Payroll available: No (but integrates with SurePayroll)

Multicurrency: Yes (but can’t use iOs apps)

PayPal payment option: No

Etsy connection: No

Shoeboxed connection: No

Customized invoices: Yes (but limited fonts and colors)

Mobile app: Yes

Option to collaborate with team members: Yes

Customer service: Email, chat, and phone

Still have questions about whether or not Kashoo is right for you? Leave a comment below or send me a message.

 

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Is Zoho Books Right for Your Business?

| Bookkeeping, Small Business

 Is Zoho Books Right for Your Business?

Have you heard of Zoho? If you have, it’s most likely that you’ve heard of it for it’s customer relationship management software. But what you might not know is that the company has also created a suite of other products that revolve around finance.

Thanks to a client, Zoho Books came onto my radar. Seeing as I always like to learn new tools and experiment, I gave it a try. And while it’s still fairly new to me, I’m liking what I see (from a bookkeeper’s perspective obviously).

However, I thought that it could be beneficial to help you choose between the variety of softwares out there on the market, so I’ve put together this quick review on my experience with Zoho Books.

If you’re in the market for software, consider Zoho Books and then check out Xero, WaveApps, Kashoo, and Freshbooks, too.

Overview of Zoho Books  

 Is Zoho Books Right for Your Business?Zoho Books is a flexible accounting software that, in my opinion, is best suited for agencies or business owners who have complex client projects, like a web designer. It’s different than other software because it has a higher focus on the client with features like a client portal and automation rules.

It’s cloud-based, which means that it’s online and all of your information is kept on the Internet as opposed to your computer. And you’ll pay a monthly subscription between $9 and $29.

Is it easy to learn?

It depends. If you’re coming from a purely paper-based accounting system, it’s going to take some time to get everything into the software. That being said, Zoho offers a comprehensive tutorial to get you started that’s available to you as soon as you sign up. Plus, their customer service is available 24/7 via email, chat, and phone if you run into any problems.

But, what’s interesting about this software is that it goes beyond simple bookkeeping and accounting with offering basic inventory, project management, workflow automation, and client portal options. While those extra options give you more possibilities as a business owner, it can also be overwhelming.

My suggestion if you decide to move forward with Zoho is to start with what you came for — bookkeeping and accounting — and eventually move into the other features.

If you’re working with a professional accountant or bookkeeper, they’ll also be able to access the software and help you set it up, so that will take some of the work off your plate.

 Is Zoho Books Right for Your Business?

What are the downsides?

There are a few downsides to using Zoho Books as a small business owner, and I’m going to break them down into four categories: very few advisors, no recurring billing, no balance sheet or income statement reports, limited third-party connections.

1) Very few advisors – While Zoho Books is competing with other software, like Xero and Wave, with its features, it’s limited by the number of advisors it has. That means if you decide to use it, your choices of hiring someone who knows how to expertly navigate and make the most of it are limited.

2) No recurring billing – If you’re invoicing many different clients the same amount each month, you don’t have the option to charge their cards automatically. While Zoho Books will duplicate the previous month’s invoice and send it, the client will still have to enter their credit card information to pay it.

3) No balance sheet or income statement reports – While they offer many reports (listed below), balance sheet and income statement reports aren’t offered. This might make your accountant or bookkeeper sad.

Included reports:

  • Estimates
  • Invoices
  • recurring invoices
  • Bills
  • credit notes
  • retainer invoices
  • Purchase orders (not included on the Standard subscription)
  • Sales orders (not included on the Standard subscription)

4) Limited third-party connections – If you’re a maker and you sell on a platform like Etsy, this software is not the one for you. Because Zoho has many other in-house integrations — CRM, Expense, Reports, Inventory, etc. — it hasn’t linked up with third-party connections like Etsy or Freshbooks, which makes it difficult if your business already uses those.

Why should I use it?

1) Focus on the client – Like I mentioned earlier, Zoho includes unique features that directly benefit your client. Beyond recognizing them with a quick “thank you” courtesy of your workflow automation rules, each client can login to their own “portal” where they can do things like manage invoices and view transactions. You would also be able to schedule reports to send to them or your team members on a recurring basis, which could be great for keeping track of project progress.

2) Basic inventory and project management – If you’re scaling your business and managing many projects and team members, Zoho has a basic project management feature that allows you to manually log time on projects and use a widget timer while you’re working. Plus, if you’re a business that manages inventory, Zoho will help you keep track of quantities and alert you when you need to make repurchase orders.

3) Workflow automation rules – One of the neatest things about Zoho Books is that you can set up “rules” to automate your workflow. For example, let’s say that your client pays an invoice. As soon as the invoice is paid, you can have a “thank you” email sent to your client. Internally, this works out for you, too. You can set up “bank rules,” so that each time a specific transaction is synced, it will be automatically sorted into the correct category. If you like Xero but also like this feature, you’re in luck. Xero offers it, too. 🙂

4) Easily accessible library of information – If you have a question about how to use the software, you have plenty of places to turn. Beyond 24/7 email, chat, and phone customer service, there is also a community forum, a lengthy documentation section, and video tutorials.

 Is Zoho Books Right for Your Business?

Quick rundown of Zoho Books

  • Started doing business in: 2011
  • Cost: Paid monthly subscription ($9 – $29)
  • Free trial: 14 days
    Credit card processing fees: Charged the processing fee of whichever payment provider you use – Stripe, Authorize.net, Braintree, 2 Checkout, Square, and ACH Payments
  • Automatic billing: No
  • Payroll available: No
  • Multicurrency: Yes
  • PayPal payment option: Yes
  • Etsy connection: No
  • Shoeboxed connection: No
  • Customized invoices: Yes
  • Mobile app: Yes
  • Option to collaborate with team members: Yes
  • Customer service: Email, chat, and phone

Still have questions about whether or not Zoho Books is right for you? Leave a comment below or send me a message.

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Is Xero Right for Your Business?

| Bookkeeping, Small Business

Is Xero Right for Your Business?

Xero believes in giving you — the small business owner — the power to plan ahead with your finances.

And truth to be told, I’m completely biased. (I liked the software so much I became a Xero-certified bookkeeper!)

If you’re in the market for software, consider Xero and then check out WaveApps, Zoho, Kashoo, and Freshbooks, too.

Overview of Xero

Xero is a robust accounting software that entrepreneurs can use by paying a monthly subscription between $9 and $70. It’s cloud-based, which means that it’s online and all of your information is kept on the Internet as opposed to your computer.

Is it easy to learn?

Since Xero is so robust, it’s not the easiest of software to get up and running. In fact, I recommend that you use it with a professional accountant or bookkeeper. If you’re looking for accounting software that’s free and easier to learn, check out WaveApps.

That being said, it can be easily navigated once your accountant or bookkeeper is keeping everything organized. You’ll be able to see your cashflow in real time, which allows you to make smart financial decisions, check reports to see if you’re on track with your revenue goals and send beautiful quotes to potential clients.

What are the downsides?

There are a few downsides to using Xero as a small business owner, and I’m going to break them down into three categories: limited multicurrency options, no recurring billing, and accounting jargon.

1) Limited multicurrency option – Unless you choose the most expensive subscription ($70/month), you won’t be able to receive or invoice using foreign currency, which makes doing business with people outside of your country really difficult. So if you’re a solopreneur who needs under 5 invoices but needs multicurrency, you still have to choose the most expensive option.

2) No recurring billing – If you’re invoicing many different clients the same amount each month, you don’t have the option to charge their cards automatically. While Xero will duplicate the previous month’s invoice and send it, the client will still have to enter their credit card information to pay it.

3) Accountant jargon – This software, like many of the others on the market, is made with accountants and bookkeepers in mind. That means that a lot of the feature I love about it (old-school style, journal-based bookkeeping) are things that won’t matter much to you. It also means that you’ll have a more difficult time navigating the software and being able to make the most of its features. It’s best used with a professional.

Why should I use it?

1) Better than a spreadsheet – While Xero isn’t perfect, it’s also a major step up from spreadsheet-style bookkeeping. That means tax time will be easier to manage because everything has already been captured and recorded.

2) Easily accessible and useful reports – The reports are one of my favorite features of Xero.

3) Constant updates and great customer service – Xero knows the value of listening to its customers. As a result, they’re always rolling out new features, fixing technical bugs, and generally making the software more beautiful and easier to use. Plus, if you do encounter problems, the customer service is fast and at your disposal 24/7 for free. They’ll get back to you almost immediately and explain how to solve whatever problem you’re facing with patience.

4) Openly available information – While this software is made for accountants and bookkeepers, Xero still offers a lot of information for the DIY entrepreneur. You can find tutorials in dedicated training, articles, videos, and their handy-dandy accounting glossary.

5) Able to track inventory – This is a built-in feature that’s great for business owners who sell physical products, like t-shirts.

Quick rundown of Xero

  • Started doing business in: 2006
  • Based in: New Zealand
  • Cost: Paid monthly subscription ($9 – $70)
  • Free trial: 30 days
    Credit card processing fees (via Stripe): %2.9 + 30 cents
  • Automatic billing: No
  • Payroll available: Yes (includes features like built-in timesheets, employee leave, and reimbursement of expenses)
  • Multicurrency: Yes
  • PayPal payment option: Yes
  • Etsy connection: No (only through 3rd party applications)
  • Shoeboxed connection: Yes
  • Freshbooks connection: No
  • Customized invoices: Yes
  • Mobile app: Yes (There are separate apps for Invoices / Receipts / Payroll)
  • Option to collaborate with team members: Yes

Still have questions about whether or not Xero is right for you? Leave a comment below or send me a message.

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