One of my least favourite parts of being self-employed is dealing with accounts. I’m reasonably good at issuing invoices, and love seeing the income hit my bank balance. Everything else just drives me crazy, especially all the bits of paper.
Organising papers would be my second least favourite thing in the universe.
One very smart thing I did a few years back was to hire in help. I create invoices for the work I do and a wonderful person called Linda does everything else.
I set her up with a special Gmail address and send her emails when I do something connected with money. For example, if I buy a bit of software I email a copy of the receipt to the special Gmail address.
Linda regularly logs in from home to see what needs to be attended to. Then periodically she comes to my office1, handles the pieces of paper and sorts out tax returns and so on.
Xero accounts service
The other particularly smart thing I did was to switch from using an accounts package on my own computer to the Xero online accounting service.
Linda logs in from home at times that suit her to work with my accounts.
Xero pulls in feeds from several of my bank accounts, including Paypal, though unfortunately not all as some banks don’t yet ‘connect’. That makes it easy to match up actual income and outgoings with invoices and bills.
Xero does handle downloaded files from the other accounts though: Linda just uploads the files into Xero and it all magically works.
One thing I love is how Xero keeps updating things behind the scenes. A while ago they added the ability to work with multiple currencies. Since I often work for people who pay me in US Dollars that makes life very simple. When I create an invoice I just select the relevant currency from a drop-down menu.
Today, 1 October 2010, the GST rate changed from 12.5% to 15%. Kiwis know exactly what that means, but for my overseas readers GST is a Goods and Services Tax that applies to everything except financial transactions.
That means that if an item I want to buy costs $100, for example, an additional $12.50 tax was added yesterday at the point of sale. Today the additional amount is $15.
For me that means when I charge clients for my work I now have to charge the new rate. By the way, goods or services sold to overseas don’t attract the tax, so when I invoice my US clients I need to note it as Zero Rated.
The great news is that while this change has been a headache for many businesses I don’t even have to think about it because Xero are handling it all behind the scenes. As you can see from the second screenshot, all I have to do is choose a correct GST rate for each line in my invoice.
Try Xero yourself
I’ve been prompted to write this post by the GST change, but also by an email from Xero. They have a special deal going:
tell your friends about Xero and we’ll give you both a special deal…
If your friend decides to sign up to Xero Business, they won’t pay a cent until 1 November 2010. All they need to do is insert this promotion code W5XWSG when they sign up at www.xero.com/friend.
And if your friend is still a paying customer by 31 December 2010, you will receive Xero Business free for one month. So the more friends you sign up — the longer you’ll get Xero for free!
Xero is available in New Zealand, Australia, the UK and ‘Global’:
Xero is available globally. It can be customised to fit all your local tax and business needs. For businesses based in the United Kingdom, Australia and New Zealand there are additional localized taxation features available. We are continuing to add more localized taxation features for additional countries.
I’m a very happy user of Xero. There’s no way I’d go back to my previous computer-based accounts package, even though I was happy with it for several years. I now pay a fixed fee each month, rather than a huge upgrade fee every year or so.
My accounts person and any other authorised users can log in and deal with my accounts at any time and place of their choosing. Xero is feature-rich, and smoothly handles all kinds of tedious tasks automatically on my behalf.
If you do anything with accounts take a look at Xero.
1 Office is a fancy word for my home.