Hiring a Xero bookkeeping service from another country can seem daunting. However, it can be one of the best decisions you’ll make as a business owner. It was for Connor and Nate!
Check out Xero’s features and the added benefits you get from outsourcing the work involved.
Core Features of Xero
Bookkeeping
Xero integrates with over 21,000 banks globally so you can import bank transactions directly into the software. This eliminates manual data entry and associated errors. It also makes reconciling bank statements simpler.
You can invite your accountant or bookkeeper to access your Xero account so they can work on your financials remotely.
The mobile app can capture bills and receipts, and Xero can extract key information for easy recording. You can track and pay bills within Xero, and even schedule payments.
Xero has customizable dashboards so you can see key metrics at a glance. It also displays an overview of your business’s financial health. From there, you can customize and generate a wide range of financial reports.
Customers and Vendors
Xero can handle multiple currencies, which is great for businesses that operate internationally.
Xero allows you to create professional-looking custom invoices and set up automated reminders for late payments. Because Xero integrates with various payment gateways, your clients can pay online with debit or credit cards and PayPal.
To keep all communication and financial data organized in one place, you can manage customer and vendor contacts within Xero.
Inventory Management
If your business has inventory, you can track levels, manage stock purchases, and generate reports within Xero.
Xero Integration Capabilities
Xero integrates with a vast library of third-party applications. This allows you to connect your accounting software with a CRM, payroll software, and other business tools. This can make Xero a central hub for your financial data.
Xero offers an App Store with over 1,000 pre-built integrations for various business needs, including inventory management, ecommerce tools, and marketing automation. The level of integration possible varies depending on the app.
Basic integrations might involve syncing contacts and financial data. Advanced integrations are available that can automate complex workflows like automatically creating invoices when sales deals close in your CRM.
Customization Options
Many integrations allow you to map data fields between Xero and the connected app so that data flows seamlessly. This means it’s also categorized correctly for easier and error-free reporting.
Xero offers a robust API for advanced customization needs, but this requires developer experience.
Advantages of Using Xero for Your Business
Unlike traditional accounting software, Xero reflects your financial situation as it happens. This means you can access reports anytime, giving you a clear picture of your business’s current health.
This real-time data allows you to make data-driven decisions. You can identify areas for improvement, track progress as you implement solutions, and adjust strategies as needed.
Xero is cloud-based accounting software, so you and your team can access your financial data from almost anywhere with internet. Your accountant or bookkeeper can even collaborate remotely from almost any device type.
Xero is scalable, so you don’t need to migrate to another tool as your business grows. The interface is user-friendly and easy to navigate, so it’s easy for teams with limited accounting experience.
Why Outsource Your Xero Bookkeeping?
Cost Benefits Compared to In-House Bookkeeping
Outsourcing to a Xero bookkeeping service can have significant cost benefits compared to hiring an in-house bookkeeper.
Hiring Costs
When you outsource, you don’t pay a full-time salary, benefits package, paid time off, or payroll taxes. Outsourcing companies handle the cost of recruiting, interviewing, and training hires. When you work with an agency, you get people who are ready to roll.
Even when hiring independent contractors, you can choose someone fully trained for a higher rate. Or, you can hire a less experienced freelancer for less, and pay for training. Outsourcing gives you all the flexibility.
Office Costs
Similarly, you don’t pay for office space, or buy furniture or equipment. Remote bookkeepers have their own spaces and stuff. The most you may have to purchase when hiring a freelancer is your software subscriptions.
Expertise
An established Xero bookkeeping service will likely have a team of experienced bookkeepers who can handle a wider range of tasks. With an agency, you also have access to more than one bookkeeper in case you need specialized service.
Outsourced bookkeeping services can easily scale their services up or down, depending on your changing needs. This can turn out to be especially cost-effective if your business is a startup, or experiences fluctuating financial activity for another reason.
Enhancing Efficiency and Accuracy
Focused
If you don’t have an in-house bookkeeper, like most smaller businesses, someone else on the team probably handles the books. This means someone is operating outside of their core competencies. That can be very counterproductive.
By outsourcing bookkeeping, your internal team can focus on what they do best. This will make them happier and more productive, so your business can grow.
Current
Outsourcing firms have teams of experienced bookkeepers who specialize in various accounting principles and software. Because of their environment, they tend to stay up-to-date on the latest regulations and best practices in the field. This means your books are handled accurately and efficiently.
Streamlined
Outsourcing providers have established workflows and processes for handling bookkeeping tasks to ensure consistency. This reduces the risk of errors. They also typically leverage technology to automate repetitive tasks to allow the bookkeepers to focus on higher-level work.
Because they manage large teams, reputable outsourcing providers have strong controls in place for data security, accuracy, and fraud prevention. One of these is peer or supervisor review to minimize the chance of human error.
Access to Expertise and Scalability
Experienced bookkeepers, although they are not certified accountants (CPA), can give you some strategic financial advice. As they learn your business and goals, they can help you make informed decisions.
Bookkeepers with tax-specific experience can help you make sure that your records are compliant with all the relevant tax regulations. You pay only for what you need, so this can be an add-on service that this specialist performs, say, quarterly.
If you have specific needs related to your industry, you can also find bookkeepers or outsourcing firms that specialize in that industry. They will have a deeper understanding of the unique accounting challenges and regulations relevant to your business.
Choosing the Right Xero Bookkeeping Service
Factors to Consider When Selecting a Service Provider
Always check that the bookkeeping service you’re considering has the necessary licenses, certifications, or professional memberships relevant to your needs.
Ensure the provider offers the specific services you require. Look at their track record, too, to verify experience and expertise. Choose a provider with a pricing model that suits your needs and that can adapt and grow with your business.
If all of that looks good, check if their work style and communication align with your company culture and values. You’ll need that to make working together go more smoothly.
Reviews and Testimonials
Always look for client feedback and industry reputation as you evaluate service providers. Check platforms like Google Reviews, Yelp, Glassdoor, and industry-specific review sites. Be aware that reviews on a provider’s website might be curated.
Identify recurring themes in both positive and negative feedback so you can get an idea of the provider’s strengths and weaknesses. Consider the reviewer’s credibility and pay more attention to reviews that provide details about performance rather than generic statements.
Case studies can also offer valuable insights into the provider’s capabilities and approach. But these may also not paint a fair picture if it’s on their website.
One thing you can check on their website is industry awards and recognition from reputable organizations. Industry association membership is also a good sign.
How to Transition to an Outsourced Xero Bookkeeping Service
Preparing Your Business for Transition
- Get your documents together and organize it all electronically, following a consistent format. You need this to do a smooth import and facilitate processing by the outsourcing provider’s accounting software. Alternatively:
- You can hire an add-on service to get everything sorted out for you.
- If your records are messy or full of gaps, hire a clean up service before looking at a maintenance package. Alternatively:
- Reconcile all your bank statements and accounts payable and receivable records before transitioning.
- Clean your data by fixing any inconsistencies, duplicates, or missing information.
- Create clear and concise documentation outlining your accounting processes, chart of accounts, and any specific requirements you have.
- Schedule a video call with screen sharing to do a knowledge transfer session with the bookkeeper. This helps you hand things over smoothly and gives them a chance to ask questions..
Working Effectively with Your Outsourced Team
- Establish communication and reporting protocols and assign a dedicated point of contact.
- Set clear expectations and timelines for work. We recommend preparing service level agreements (SLAs) and even contracts.
- Schedule regular meetings to discuss progress, address challenges, and answer questions. Make sure you spend some time building rapport before you jump into business stuff.
- Provide ongoing constructive feedback to help your outsourcing provider adapt to your specific needs and preferences.
- Treat outsourcing companies and hires as partners, like an extension of your own team. Value their expertise and involve them in discussions relevant to their tasks.
- Show appreciation for their efforts and contributions to your business success. Acknowledge and celebrate milestones and achievements together.
FAQs
How do I ensure my data remains secure with an outsourced Xero bookkeeper?
Choose a Xero bookkeeping service with robust security practices. Verify that they comply with relevant data security regulations relevant to your location and industry.
Look for providers with certifications like SOC 2 (Service Organization Controls). Verify what data encryption and access control they implement and how they manage data backups.
What should I do if I’m not satisfied with the service provided?
Address any issue you notice promptly and professionally. Document specific examples to show the provider. Come in with the attitude that you want to make things better rather than drop accusations.
Express your willingness to work together to find solutions. If the situation cannot be resolved, review the termination clause within your service agreement so you’re prepared.
If you decide to terminate the service, start researching alternative Xero bookkeeping providers before you let them go. Document the whole process.
Are there specific industries that benefit more from Xero bookkeeping services?
Xero’s cloud-based accounting software offers functionalities that can benefit a wide range of businesses. However, these industries and businesses can particularly benefit:
- Small and medium sized businesses
- Freelancers and solopreneurs
- Ecommerce businesses
- Trades and construction companies
- Rental property businesses
- Agencies and marketing firms
How often should I expect financial reports from my outsourced bookkeeper?
You can choose how often to get financial reports. Consider the industry standards that apply to your business and how often you need that data to make informed business decisions.
Monthly reports are good for most businesses. More complex businesses can benefit from weekly or bi-weekly reports.
Can I switch between different service plans as my business grows?
Xero is super scalable, so you can switch plans as needed. Talk to your bookkeeping provider as well to see how flexible they are when it comes to the software they use.
What Is EcomBalance?
EcomBalance is a monthly bookkeeping service specialized for eCommerce companies selling on Amazon, Shopify, Ebay, Etsy, WooCommerce, & other eCommerce channels.
We take monthly bookkeeping off your plate and deliver you your financial statements by the 15th or 20th of each month.
You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.
Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.
And here’s some free resources:
- Monthly Finance Meeting Agenda
- 9 Steps to Master Your Ecommerce Bookkeeping Checklist
- The Ultimate Guide on Finding an Ecommerce Virtual Bookkeeping Service
- What Is a Profit and Loss Statement?
- How to Read & Interpret a Cash Flow Statement
- How to Read a Balance Sheet & Truly Understand It
Conclusion
Outsourcing your financial tracking to a Xero bookkeeping service can save you so much time and money. If you take precautions, you can avoid most of the risks and reap all the benefits.
