CASE STUDY
Timothy Munro, an accountant with an avid interest in technology, was immediately attracted to online accounting software Xero when he first came across it in 2008.
“The main attraction was the time saving. I loved the automated bank feeds and I could work on it from the office at home. I could see how this would revolutionise the way we would interact with our clients,” Munro says.
Munro began using Xero for his 18-staff firm for several reasons, not least because he knew it would help him become an expert in the program and better explain how it worked to clients.
Moving to an online accounting program had other benefits. Munro’s firm Change Accountants used a desktop accounting program on a PC which could only be accessed by one person at a time.
Munro or a staff member entered all receipts and invoices manually which took a long time.
Once the firm began using Xero for its internal accounting, Munro could give several people access to the program from any device with an internet connection. One staff member could do the payroll while another could simultaneously send invoices to clients.
Change Accountants was also one of the first firms to move to the cloud-based practice management suite, CCH iFirm. The suite created invoices which flowed straight through to Xero, as both online programs had been designed to swap information through their application programming interfaces, or APIs.
“We didn’t have to re-do invoices and we had debtors ledger that was always correct,” Munro says. Most accounting firms do their accounts in their desktop accounting program and every month have to reconcile the debtors ledger in the practice management suite with their accounting program. “That’s inaccurate and it takes a lot of time. Having an always perfectly up-to-date debtors’ system in Xero was just brilliant,” Munro says.
Counting the (Time) Savings
Change Accountants later moved from CCH iFirm to Xero Practice Manager which had better integration with the firm’s own Xero file. The online accounting software has lead to many improvements in productivity across the firm which save many hours of time for partners and admin staff.
Munro estimates that the automatically updated debtors ledger and invoice list saves a couple of hours a month in admin compared to a desktop program.
While most clients are on fixed price agreements, the firm uses a Xero-compatible app called Debtor Daddy to reduce the time spent chasing debtors by two hours a week.
Other major time savings come from automatic coding of transactions flowing through the bank feeds into Xero. Change Accountants no longer needs an admin to spend two to three hours a week entering bank and credit card transactions.
The firm uses several other Xero “add-on” programs such as Spotlight Reporting, which generates monthly board reports and quarterly summaries.
“I can push one button and it sucks in every month and prepares a board report for our firm,” Munro says. “It saves me about two hours a month with my reporting requirements to head office.” (Change Accountants is part of the CountPlus, an ASX listed company.)
Xero uses an employee portal that lets staff apply for leave and look up payslips, activities which otherwise would have required admin time to manage. Xero’s payroll automatically calculates superannuation payments and tax payable. “Payroll takes five minutes to do once a week,” Munro says. These two features save two hours a week.
Change Accountants’ staff typically rack up many expenses which they record using the Xero Touch mobile app. Each employee takes a photo of the receipt, allocates it to a job and is repaid through payroll. This saves about an hour a month, Munro says.
Are Staff or Clients Happier?
The firm’s staff love the Xero employee portal. “If they misplace a payslip or summary they don’t have to bug anyone in admin, they can just download them,” Munro says. Many people make leave requests on their phone or from home, he adds.
“They might be out on the weekend and they realise they need to take leave and we can process the request during the week. They love having the flexibility.”
The ability to view accounting information on the road is a big plus for Munro. As the MD he likes to keep an eye on what’s happening. He travels with a Microsoft Surface Pro 3 and can open up Xero in the internet browser wherever he has a mobile connection.
“It gives me comfort being able to get an instant update on cash flow and what’s going on with the business. I can do that anywhere, anytime,” Munro says.
Although the firm’s accounting program is for internal use, it still has a small impact on clients. Change Accountants has connected payment gateway eWay to its Xero file so that customers can pay their invoices online immediately. “People love making the payments process easier, they can do it faster,” Munro says.
What are the Best/Worst Things about Xero?
“The clean, simple, easy-to-use interface makes it easy for our team to process information in Xero,” Munro says. “It doesn’t make the accounting side of things something that’s dreaded so they get onto it quicker. And because it’s up-to-date I can make better decisions.”
Xero could be improved by adding more user types, Munro says. He has had to give some team members higher levels of access than he would otherwise like just so they can process invoices and statements. Xero needs finer controls that can better define what a user could do, he adds.
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