Cloud Based Accountancy Software
A brief look at the different types of software that we use as a modern accounting firm, optimised for the hospitality industry
Xero is a cloud based accountancy software. It helps you to keep on top of your daily bookkeeping tasks as well as submitting VAT Returns and minimises the need for keeping several different running excel spreadsheets. Xero also connects to a bunch of apps to help speed up and automate the accountancy process. Have you ever sat there after a busy shift trying to check through Z reads and count them all up before typing everything out onto a spreadsheet? Well, there is an integration for that!
Xero also makes use of “Open Banking”. This is where your live “bank statement” is pulled directly into Xero- it helps with reconciling bills, receipts and invoices and also helps to identify anything that’s missing.
Accountants are able to submit your Limited Company accounts directly to HMRC and Companies House through the use of Xero Tax. This helps to mitigate errors that may occur when trying to copy information from one type of software (or spreadsheet) to another. As of yet, Xero isn’t able to submit sole trader and partnership accounts (but it is on the way).
Xero runs pretty smoothly and it is capable of handling small-medium sized businesses (and even large ones that don’t have too many transactions). It also offers a payroll add on, an expenses app for employees so that they can upload receipts and business expenditure on the go.
Xero isn’t without its faults though. The payroll add on can be slow and a little clunky if you have quite a few people on payroll. Xero also appears quite ‘easy to use’ (if you judge it by the adverts on the TV!), but that isn’t always the case- every transaction needs to be placed into a unique account and if you don’t know what to put where, it can be a bit of a nightmare to unpick!
Hubdoc, ReceiptBank (now called Dext) and AutoEntry are all ‘data capture’ apps. You upload your suppliers’ bills and invoices (or even your own if you use an external invoicing software) and the software essentially pulls all of the data from it- invoice number, supplier name, VAT rate and amount, due date and total invoice value.
After a while Hubdoc (and the other two) start to ‘learn’ about each of your suppliers and they will try to populate a lot of the tax information along with the account code that you normally assign that particular supplier to. Once you’ve checked over all of that information, Hubdoc will send the invoice directly into Xero (or Quickbooks) for you to reconcile against the bank feed.
Hubdoc, ReceiptBank (now called Dext) and AutoEntry are also able to “fetch” invoices directly from some suppliers (like British Gas and EE or O2 for instance) so you’ve no need to download from one site to upload to another.
Hubdoc is free if you’re a Xero user and it integrates flawlessly. However, it can be a little slow and it sometimes has difficult reading invoices that are a little worn or contain a heavy amount of information.
AutoEntry is more accurate than Hubdoc and it is quite reasonably priced if your invoices, bills and bank activity are all minimal- you’re able to buy credits so that you’re only paying for what you’re actually scanning and sending over to Xero.
ReceiptBank (now known as Dext) is far more intuitive than both of the above and it is only available at set monthly (or annual) prices. However, it is also much more expensive and smaller businesses may struggle to justify the cost of additional software, particularly if they’re using Xero as Hubdoc comes free as standard.
Syft, for us, is the ultimate reporting software. It integrates with and pulls information from Xero to help us plan and budget accurately. It aids with forecasting, benchmarking against other businesses in the same industry as yours and allows us to consolidate different entities into a single group. The reports that it helps us to generate are customisable and easy to read.
We only use Syft for something called Management Accounts. Management Accounts (mainly) consist of monthly reporting and future planning and rely heavily on foresight and educated guesswork. It allows us to compare actual results with the budgets that we’ve planned together at the beginning of the year so that you can track progress and identify areas within the business that need support.
Xavier Analytics (now called Dext Precision)
Dext Precision helps to identify errors within Xero (like if you’ve put a different tax rate on a transaction or assigned a bill to a different account than you usually would).
Dext Precision helps us to keep our eye on the ball and helps to provide an assurance that if we make a mistake (we’re only human), we’ll be able to find it.
Dext Precision also provides a complete overview and snapshot of the business i.e. your turnover each month, how many transactions there were in the bank account, how many bills you’ve entered into Xero and how many invoices you’ve sent out from Xero too. It sounds like overkill, but Dext Precision also links up with GoProposal, so it helps us to price fairly and transparently by using the information already contained within your Xero account.
We’ve already covered this off on the About Us page. GoProposal ties in with our stance on transparency- we build a proposal in front of new clients (either face-to-face or via Zoom) showing them exactly what we charge on a monthly basis for each task that we carry out. It helps our clients stay in control of their own fees- they’re able to build the package that suits them best and that’s what we’ll charge for- exactly what they want.
The above is a brief run down of the types of software that we use, there are dozens of other types of software out there, but these are what we know how to (and prefer to) use.