The online-only option
Many may have heard of Xero, and wondered what all the fuss is about. It's not perfect - but it does have a lot going for it, and it's continually getting better. We think it's been oversold to small businesses as solving all their woes. It still requires a basic understanding of accounting.
Xero is different from traditional accounting packages - with some benefits and some disadvantages. But when it's good, it's very good. This includes, for example, FX accounting, although others are catching up. With access to the Internet required, they've been able to do a lot of work to simplify this area. And a feature available only to support people allows us to make bulk changes relatively quickly - very useful when a user has posted transactions to a wrong account. So what's it all about?
Well, the first thing is it's web-based. Even if you use Windows, Macs, Linux or any other system, you should be able to use this. Of course, I can't guarantee it will work perfectly in every situation - but I can guarantee that you don't need to use Edge - we use Firefox and Chrome, while clients use Safari.
Also helpful is the fact that one of the key people behind it is a qualified accountant from public practice. I'm biased aren't I - but this system has clearly been written with a few local things in mind - like the Companies Act, IRD etc. I'm not sure if it's as good in other countries - but we have the advantage of the developers being in NZ.
Being web-based allows them to offer many advantages - such as daily access to bank accounts, and immediate access to exchange rates. The way this system handles exchange rates has allowed one of my clients to do away with much complex and error-prone accounting - it just does it all invisibly but accurately.
That's not the only advantage of a web-based accounting system. It can be accessed anywhere by anyone (with appropriate authorisation). Backups and maintenance are no longer issues - unless of course, the Xero company has not faced these problems - but from what they tell us, the systems are global with heavy-duty backup and duplication.
So what are the disadvantages? Well, many firms require stock / inventory. This system does not handle significant stock, although it does interface with systems like Unleashed - a web-based stock system.
Using a browser interface does mean you can't arrange windows as easily an effectively as with a dedicated program. Plus if you want to access multiple files concurrently, you need to use a different browser
There are other questions in people's minds - some don't like being dependent on the Internet. While at times (e.g. school holidays) performance can be affected by heavy loads on the Internet, and there are limits of the ageing IP4 addressing system, the Internet is part of our world today. Unfortunately, fibre doesn't really see a marked improvement - everything is run on the remote system so that is where the hold-ups are. For those who are used to local systems and aren't naturally patient, especially accountants and those who use their system for most of each day, this can be annoying.
To partially overcome the speed issue, Xero offers a feature to their advisors that others sadly do not do. They have a find and recode feature which lets accountants find transactions and bulk edit features including account codes.
For further information on Xero, check out Xero's website, or talk with us.