Accounting is the most time-consuming yet crucial task in every business setup. Relying on manual setups in this digital age only highlights the outdated practices of the setup. Due to this, utilizing accounting software like Xero has become a necessity. However, Xero is quite advanced and well-developed and offers numerous categories and sections.
Understanding the functioning of the software is quite a daunting task for beginners. It often leads them to mistakes in the implementation which further pave the way for confusion and losses. Referring to experts for implementation or watching out for mistakes are the two options you can explore to limit your losses.
To ensure you maximize your profits, it's crucial to be aware of the Xero accounting software implementation mistakes highlighted in this article. Keep reading for more details.
Top 6 Xero Implementation Mistakes You Should Not Make
Relying on accounting software has become the norm, even for small and new business setups. Implementation of accounting software is often a demanding task and requires expertise. There are numerous functions and categories that you can utilize to grow your profits. However, some typical mistakes can hinder profitability. Learning and avoiding them can offer benefits in the long run.
Here are some of the most common mistakes in Xero accounting software implementation you should never make to avoid any loss.
Not Synching Business and Credit Card Accounts
The first and foremost mistake most authorities make with Xero accounting software is to synch business and credit card accounts. It is only natural for business setups to keep separate accounts. However, all of these should be synched to maintain the financial reports. It can help manage tax details, handle various currencies and make well-informed business decisions. The process is a little tricky for beginners. Many business owners consult Xero implementation partners to help sync all accounts and handle other details too.
Forgetting User Access and Permission Levels
Forgetting to set or review user access and permission levels is the next Xero accounting software you must never make. The accounting software has various categories and sections which can be handled by various teams in the business setup. The sales team will have nothing to do with payroll management. Granting them user access to the section can lead to issues in the work setup. Therefore, it is crucial to review the user access and manage the permissions on a regular basis. Even if someone needs access to something, do not forget to change it later.
Poor Chart of Account Configuration
Poor Chart of Account configuration is the next Xero accounting software you must watch out for. The accounting software comes with some default chart settings. The beginners can utilize it as it is; however, it will require customization as soon as your business starts growing. You will have to configure the charts according to various account categories. You can archive, delete, rename, or add new accounts depending on your needs. It will further assist default tax code implementation and save you time in tracking business activities.
Ignoring Xero Subscriptions
Ignoring Xero subscriptions is the next common mistake business owners must watch out for. Most authorities hire experts or partners to manage the accounting software as it requires a little expertise and time. Apart from offering control to the software managers, the authorities do not take ownership rights. Ignoring the subscription hinders their ability to add more users to the software, and they might also not get the data. So, it is crucial to get the subscription and ownership rights. You will be able to invite other users and share data however you want.
Poor Receipt Management
Poor receipt management is another crucial mistake in Xero accounting software you should not make. Managing and organizing business receipts is crucial for smooth functioning and taxation matter. It is imperative for the business authorities to decide on the management early on. Not having a clear process will only lead to confusion and chaos at the end of the year. There is also a high risk of losing the receipts if you ignore management and suffer due to it. Make sure to find and implement a proper process and handle your year-end reconciliations smoothly.
Transaction Mishandling
Transaction mishandling is the last mistake in Xero accounting software you must watch out for. At times, the authorities make a business transactions from their personal account. The transactions should be entered into the accounting software. However, it cannot be directly placed in the business accounts, as it has been done through a personal account. Mishandling or mentioning in the wrong category can lead to taxation issues. You can contact and consult with your accounting partners to efficiently utilize the software and grow your profits.
Do you need help with accounting software implementation?
If you are facing challenges in implementation, the best strategy is to consult the experts. Get in touch with a professional accounting firm to ensure smooth Xero implementation and watch your profits grow.
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