When electrician Rob Martin started out as a contractor it was fairly easy to keep track of his expenses and invoices with a spreadsheet in Microsoft Excel. However, as work picked up and the volume of transactions increased, Martin found himself bouncing through four or five spreadsheets.
“When I started getting more work it just became too complicated to keep track of everything,” Martin says. “It was quite easy to forget things like when bills were due.”
Martin came to rely on monthly bill statements from creditors as reminders for paying bills. After a year he realised the spreadsheet system wasn’t working well enough, he says.
While they met all his requirements the real deterrent was cost, he says. The two vendors charged $300 to $500 for the programs plus $100 to $200 a year for software and tax administration updates.
“When I tried (Xero) I thought, this is perfect,” he says.
The biggest attraction was ease of use. Martin says it took him more than 10 attempts to work out the basics of MYOB and adapt it to his business, despite it being a version optimised for trades businesses.
With Xero I’m probably doing five to 10 minutes on accounts a day, Martin says. Martin’s accountant gave him a quick rundown of Xero, including how to access the help centre and how-to videos. “I jumped on it that night and an hour or two later I pretty much knew the ins and outs of it. The thing I love about it the most is that it’s so easy. After using MYOB and Quicken and all those, you jump onto Xero and it’s such a pleasure to use.”
Martin has been using Xero for almost 10 months and says he has cut down a lot of time spent on doing the accounts, from five to 10 hours a week to one hour.
“When I was doing it with the spreadsheets I’d spend a couple of hours doing the daily paperwork, sorting out the money. With Xero I’m probably doing five to 10 minutes every day. If I let it go the whole week I’m maybe looking at the most an hour on a Friday night to do the week’s paperwork and that’s it.”
The only downside is that Martin’s bank accounts, which are updated daily, are a day behind after weekends. Martin assumes that this is because Xero is based in New Zealand.
And then there’s the cost. Martin is paying $49 per month for Xero or just under $600 a year. The fee is part of a $200-a-month package from Rush and Associates which includes all accounting and tax compliance.
However, Martin says he is happy to pay this price. “The way I look at it is that I know it’s probably a bit more expensive but having all the up-to-date fees with tax and the ease of use, to me it’s worth it.”
Martin says the half a day or more that he would have spent doing his accounting he spends instead with his young family. “If you have to spend a bit extra to get that time, why not?” he says.