Xero case studies

Consultant operating through Ltd company

Paul set up as a consultant 10 years ago and formed a Limited company as a tax-efficient way to work with his clients.  When setting up the Limited company, his bank set him on a path of using Quickbooks Desktop.  This cost £20 per month and was an overly complex piece of software for what Paul needed. 

Paul would muddle through with his VAT return each quarter and send us his outputs from Quickbooks at year end. It would take 3 to 4 weeks to get the year-end accounts finalised.

Paul’s priorities were to be able to invoice his clients quickly and easily, monitor who owed him money and to deal with his VAT return each quarter accurately.  This type of financial control is just one of the many benefits of Xero and as Paul raised less than 5 invoices per month and had relatively few transactions in his bank account, he was able to convert to the Xero Starter package for £9 + VAT per month at the end of his financial year.  We dealt with all of the conversion for him and a short amount of training meant that Paul was up and running very quickly.

Paul now speaks to us once a quarter so we can quickly check his VAT return (that he has prepared on Xero) before he files directly online via Xero to HMRC.

Recruitment consultant with £1m+ turnover, no previous bookkeeping system

This client, based in Southampton, had an accountant based in Birmingham.  They never met face to face and rarely spoke on the phone.  A different team member dealt with them each time they spoke.  The previous accountant prepared the quarterly VAT return (from a pile of sales and purchase invoices the client sent his firm) and prepared year-end accounts several months after the year end. 

The client approached us for a quote.  They were keen to form a better relationship with a more local accountant and wanted to understand what they should be doing to keep on top of things.  The business had grown but the administration had been left behind.  They had 18 months’ worth of books to be written up and reconciled to the two bank accounts.

Our recommendation was that we get the client onto Xero.  We wrote up the 18 months’ worth of books on Xero for them (over 6000 bank statement lines), dealt with their VAT return that was due in less than eight days of them signing us up, and had the year-end accounts ready for approval within two weeks of them becoming our client. 

Over the subsequent six months, we gradually handed over the bookkeeping to a member of staff, providing them with tailored training.  The client has a fully operational sales and purchase ledger, keeping them in better control of who owes them money and who they need to pay.

Our role has now transitioned to reviewing the VAT return once a quarter and preparing quarterly management accounts within a few weeks of the quarter end.  They are able to receive meaningful analysis of what the business has achieved and focus on how to build on their past success sustainably. They also have several months’ warning of upcoming tax bills – so no nasty surprises.

Hair & beauty salon

This profitable owner/managed business identified an opportunity to acquire a second salon and this coincided with plans for the daughter to enter the business and form some succession plans.  Up until that point, the husband – who was holding down a highly paid sales job – was dealing with the bookkeeping once a quarter, when the VAT return was due, on a bookkeeping package.  This caused a great deal of stress four times a year.

With plans to grow the business further, it became apparent that moving to a cloud-based accounting solution was the right next step and this meant the daughter could take over the bookkeeping with a clean break on a new system, converting at a year end.

We dealt with the set-up, tailoring the system to deal with the tracking of the two salons, handling the company credit card transactions and merchant sales transactions.  We provided a tailored training session to mother and daughter, which included writing up the first six weeks’ books.

Certain aspects of Xero, such as sales invoicing, are not required for a retail outlet business like this.  However, this was not an issue as the ‘Dashboard’ was tailored to remove any ‘redundant’ aspects to ensure that only the most relevant information is at the fingertips of the business owner.

The client is embracing the new technology, seeking out phone apps that can assist with the scanning of documents (ScannerPro).  There are also various specialist Hair & Beauty Add-ons that can integrate with Xero and assist with appointment scheduling and loyalty schemes. 

Cycle retailer

As with a number of our entrepreneurial clients, this business had grown out of its bookkeeping system that had served it well for a number of years. 

The client operates four outlets and wished to track better certain overheads of each outlet, together with their sales.  In addition, the client receives over 150 purchase invoices each month, all with different payment terms, and they needed a system that kept better track of who they owed money to.  They were also keen to move to a more paperless office.

We handled the conversion for the client at their year-end and delivered two half-day tailored training sessions at their office, writing up the first couple of months’ books as a training aid.

The client adapted well to the new system and being an owner/managed business, it is now easier for them to access information both in the office and at home, as they need to. 

The client is planning to install a new point of sale and stock control system.  There are add-on partners that specialise in cycling retailers and these integrate with Xero. 

Previously we only produced annual accounts as it took a number of weeks for the client to pull together a full list of outstanding purchase invoices, as well as other information relevant to the year-end accounts.  We now produce quarterly management accounts as all the information is already in Xero and, therefore, have a regular dialogue with the client on both past financials and upcoming projects in the business.

Bakery

Michael has been a client of ours for a number of years, starting as a self-employed baker and incorporating his business as it started to grow from one outlet to now three outlets, including a coffee shop.

Michael and his wife were looking after the books on a simple bookkeeping package.  This worked well for a number of years but, as the business grew and as Michael’s wife had less time to spend helping with the books (she had a full-time job, 3 children and one on the way), it became apparent that the bookkeeping software they were using was not fit for purpose.

Michael was able to convert to Xero halfway through the year, at the end of a VAT period.  He identified one of his current staff members as someone who would be able to be trained in Xero to deal with the day-to-day bookkeeping, leaving him to get on with the invoicing and running the business.

We dealt with the conversion and provided two half-day training sessions to his employee, writing up the first couple of months’ books on Xero.  She had not had any previous bookkeeping experience but got to grips with what was required easily, finding Xero intuitive. Where she had any queries, she would just simply pick up the phone to our office.

Michael was keen to start tracking more closely what each of his shops was achieving in sales and costing in overheads.  The Tracking facility in Xero is just one example of what Xero can do and it works like a dream for him.  The ability to raise and email invoices to his wholesale customers has also helped him get much better control over who owes him money and has meant he invoices faster and collects cash more quickly.

We produce quarterly management accounts for Michael which help him understand his margins, his performance against budget and enable us to provide him with tax forecasts every 3 months.

He recently telephoned to let us know that “he doesn’t know how he coped without Xero”.

His wife was happily made redundant from the family business and she and Michael had to find something different to argue about!

Charity

This client had been using Sage for a number of years and although it wasn’t quite fit for purpose, the bookkeeper kept on top of things.  Generating the required reports for the Trustees was a challenge, however, and it took several weeks to prepare the year-end charity accounts. 

A couple of changes in bookkeeper caused some unrest and difficulties. Finally a suitable bookkeeper was found – Karol – who was based several hundred miles away but was a good fit for the charity, experienced and pro-active. This meant that Xero came into its own and a conversion from Sage was very worthwhile. 

The bookkeeper made some changes to the payments system, utilising GoCardless Xero Add-on partner as a more cost-effective solution.  The flexibility of Xero, with tracking and repeating invoice templates, together with some CRM capabilities, means that an initial upfront investment in set-up time now pays dividends with the time saved in dealing with the bookkeeping each week. 

Karol is able to pick up the phone to us whenever she has a query on Xero or with any aspect of their accounting, as our service level includes unlimited ad hoc queries.

Charities also receive a 25% discount on the subscription price.  Get in touch now if you’re a charity and would like to discuss further how we can work together.

£2m+ turnover business previously using Sage

A long-standing client, trading for over 25 years and with a very competent bookkeeper using Sage, approached us following an IT review of their systems which queried the cost of Sage versus alternative systems such as Xero.  A face-to-face meeting with the client, where we worked through the capabilities of Xero versus their current use of Sage, established that Xero would be a very good fit for the client and would speed up a number of their in-house processes, together with the added benefit of being cheaper to run than Sage.

Key facts on this business:

  • More than 2000 contacts in their database;
  • On average £350k of outstanding sales invoices at any one time;
  • Raises approx. 250 sales invoices per month;
  • Approximately 20 employees;
  • Bookkeeper works three days a week in the office, plus from home as required;
  • Additional accounts clerk, office based, two days a week;
  • Two directors, one of which is overseas for part of the year.

As the year-end was fast approaching, which is a good time to convert, we moved quickly to work on the Xero set-up, tailored to suit this client.  Moving to a new system is a good opportunity to cleanse data and the client took the opportunity to reduce their contacts list down from 5000 (built up over 25 years) to 2000 current contacts.  Sage did not provide a facility to delete defunct contacts.  Xero is much more flexible in this regard so the client will be able to keep their contacts database much cleaner going forward.

We delivered a tailored half-day training session to the bookkeeper and accounts clerk at their office and assisted with the transition from Sage, being on hand over the phone to deal with queries as and when they arose.

As Xero is cloud based, the bookkeeper was able to work remotely from home at hours convenient to her to get to grips with the new system.  Being a Sage user for so long we had anticipated that the transition may meet resistance; however, she was over the moon with how much more user-friendly Xero was and how much better Xero deals with certain aspects of their business, e.g. a number of clients make payments in advance and Xero has an excellent way of dealing with such pre-payments.

In time, the business will seek to utilise inventory tracking as well as get the sales team on board to utilise quotes.  This will make the end-to-end processes at this client much slicker, more paperless and lower cost.

Marine project management business

This client approached us as they were unhappy with the service level they were receiving from their current accountant.  They spoke with him only once a year and it was difficult to have a face-to-face meeting.  The bookkeeping had become out of control on another cloud-based system because the client did not receive a good level of support from their previous accountant.

Following advice from Parry Hancock, the client decided to incorporate its Partnership and also become VAT registered.  The client was keen to move to Xero instead of setting up the entity on the cloud-based solution they were used to, as they could see the software was more intuitive.  The client looks after a number of clients, handling their boats and dealing with all aspects of boat care and chartering.  For this they need a good project management tool and they selected an add-on called Jobber.  This integrates with Xero for invoicing purposes and therefore reduces the level of data entry required to process a sales invoice.

As the client spends a number of weeks overseas, dealing with client projects, a cloud-based solution is essential for them.  They can access their books from a marina in Spain, as long as they have their iPad with them and a Wi-Fi connection.

The client also took the opportunity, at this exciting phase of their growing business, to participate in our Business Development Programme.

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