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Are you a small business owner who uses software powerhouse Xero for their accounting and bookkeeping? Perhaps you are also interested in implementing Profit First money management into your business, but unsure whether the two systems can live harmoniously?
In short, the answer is yes! Xero and Profit First work perfectly together. In fact, when utilising these two systems, Accounting isn’t accrual profession after all (sorry couldn’t help myself!)!
Since being founded in 2006 Xero has been used in over 180 countries with over 3.95 million subscribers. It is no wonder that it is Australia and New Zealand’s favourite cloud accounting software for small businesses. With Xero’s ability to provide business owners with real-time visibility of their numbers and financial position, this simple, secure and smart software has changed the way many Australian small businesses handle their bookkeeping and accounting.
Profit First Accounting is a Xero only business. We believe that Xero offers our clients the best software solution to easily manage their finances. We recommend you get your Xero set up by a professional. This will ensure your Chart of Accounts aligns with your business and the Profit First Methodology. When you get it right from the start, this will ensure accuracy and eliminate costly mistakes. If this is something that you are interested in setting up with us, get in touch by following this link.
It is important to review your expenses regularly. We suggest a 6 monthly review to ensure that all transactions are warranted for your business’s success
The secret to success with Profit First, is to follow the steps.
Adding the additional bank accounts into Xero is easy. Once this is done, you will need to activate the bank feed. Depending on your bank account, the process may be slightly different, you may be able to do the process online or you might need to complete a form to submit to your bank. Once activated the transactions will start coming into your Xero account. It is also crucial to remember that the bank feeds need to go back to the start of the xero file or the day the account was opened, this may also require a manual import of data to ensure your finances are correct.
Once you have added your accounts into your Xero profile, and they are linked with your bank, be sure to name them correctly according to the Profit First suggested account names. This will ensure there is no confusion and allow you to manage your accounts smoothly.
Transferring between accounts in Xero is also really easy, once you do these in your bank you can easily reconcile them in just a few clicks (don’t worry, we can show you how to do this).
You may think that multiple bank accounts will make the process longer … well it doesn’t. Xero is very intuitive. After you have reconciled a few transactions to your various accounts, it will auto suggest the bank account the transaction should be allocated to. This means more time (and brain space) available to you to do what you want!
In summary, Profit First, Xero and your business have the ability to have a long-lasting, practical, intuitive and easy-going relationship (serious friendship goals right there!).
As a certified Profit First Master, and Xero Partner, I can help you set up your business utilising the cash flow strategies of Profit First, as well as integrating this within Xero. Simply book a call with us today, so we can start you on your journey to financial freedom.
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