REAL-WORLD REVIEWS
Does practically being forced to submit your taxes via accountancy software make life easier or more difficult for small business owners? We asked two of our own for their experience with the software packages they use. See Jon Honeyball’s Quick-Books verdict overleaf.
XERO
I’m among the 99% of small business owners who hate doing their books. So when my accountant told me I needed to migrate my accounts from Excel to his preferred choice of software, Xero, I almost cried in his office.
The initial transition was painful, partly because I did it halfway through my financial year. Consequently, my accountant begged me to reissue all my invoices in Xero so that the books would balance at the end of the year. That took a fair few hours. You may have no choice, but my advice would be to make the transition at the start of your company’s tax year.
The rest was plainer sailing. An hour’s training with my accountant was enough to get me going and to learn many of Xero’s foibles. Issuing invoices is now much faster than my old Word/Outlook/Excel method, and it’s much easier to track when invoices haven’t been paid and to send reminders. The VAT returns basically calculate themselves, and my accountant can dip into the software and check I’ve not screwed anything up before it gets sent to HMRC. And I have a much clearer visibility of the month-to-month and year-on-year performance of my business than I ever did with my iffy spreadsheets.
There are still times when I want to punch Xero in the mouth. The whole process of reconciling payments is unnecessarily arduous. There’s an over-complex process to set rules so that, for example, a payment to one of my staff is automatically marked at the correct VAT rate, but Xero could surely apply a little machine learning here and automatically create those rules after you’ve paid the same staff member two or three times. Likewise, attaching invoices or receipts to payments is not the drag-and-drop process it should be.
Still, am I better or worse off for Xero? I’m certainly better informed about my business and the finances run more smoothly. It’s not worked out any cheaper, though, even though the software is doing much of the heavy lifting. Maybe I need another word with my accountant.