Xero is a cloud-based accounting software suite and one of the most popular tools for small and medium-sized businesses. It offers benefits such as automated, remote-access functionality, affordable subscription costs, and easy compliance with evolving Making Tax Digital regulations.
Many companies, especially owner-managed firms with very limited time for administrative and clerical tasks, opt to outsource their bookkeeping and additional obligations, such as producing management accounting or expenditure reports, to a third-party bookkeeper, accountancy firm or service – but standards, accuracy and reliability naturally vary.
The business accountancy specialists at James Todd & Co provide advice about hiring a bookkeeping service, when this may be an exercise in cost-efficiency, and what to look for.
Why Hire a Xero Official Bookkeeper?
Bookkeepers may hold formal qualifications, such as AAT, or have experience managing bookkeeping services on behalf of clients. They provide data entry and record-keeping services to ensure your business’s financial transactions are logged. They may be tasked with raising invoices and purchase orders, entering receipts and payments, reconciling bank accounts and logging expense claims and other information.
We’ll look at the advantages of hiring a professional, experienced bookkeeper shortly, but the first consideration is whether you’d like to take on a bookkeeper or accountancy services provider who offers assistance with a variety of software programs or who has a proven level of expertise specifically within Xero.
Professionals with a verified certification are always advisable, not least because they have access to features and tools within the Xero platform that other users may not be aware of or know how to leverage to maximise efficiency.
What Is a Xero Certified Bookkeeping Service?
To achieve certification, bookkeepers must enrol in professional learning programmes to achieve recognition, including live webinars and digital courses that look at in-depth ways to add value to clients.
Here at James Todd & Co, we hold Xero Platinum Partner status and have an array of certifications and quality assurance standards granted by the software provider. This includes Xero Trade and Construction Specialist, Xero Professional Services Specialist, Xero Migration Certification, Xero Retail and Ecommerce Specialist, Xero Making Tax Digital Ready and Xero Certified Adviser.
That long list of certifications simply means we know the advanced software platform inside out, can process reports, account reconciliations and returns swiftly, and can offer on-demand guidance to address any issues or niggles you may experience.
The Costs of an Accountancy Practice vs Independent Bookkeeper
Our next consideration is whether you’d like to hire a local, independent bookkeeper or work with an accountancy firm. Most small business owners require an accomplished bookkeeper to keep their companies running smoothly, managing daily, weekly or monthly administration tasks, completing returns and declarations, and producing reports that offer oversight into revenues, profit margins and productivity.
The right answer may vary depending on your priorities, but our advice is to work with a capable and multiskilled accountancy team. While the ongoing costs of bookkeeping are potentially slightly higher than a freelance bookkeeper, the benefits far outweigh that investment in assurance and compliance.
Should you require additional expertise, advice on more complex accounting issues or tax matters, or wish to source guidance on opportunities for your business, an accountancy practice can offer further services in addition to bookkeeping.
Accountancy firms that offer bookkeeping services can offer extra capacity as needed, such as spotting mistakes or inconsistencies they believe need investigating, to suggesting the best way to account for a transaction.
Advantages of Outsourcing Bookkeeping to a Local Accountancy Provider
Outsourcing bookkeeping to an accountancy practice offers compelling benefits that offset the costs of hiring an experienced service provider:
- Guaranteed coverage – if your normal bookkeeper or accountant is absent or unwell, another member of the team will pick up the workload with zero impact on your business, reporting requirements or payment processing.
- Accurate tax guidance – an accountant preparing a VAT return, submitting PAYE records or working on year-end accounts will identify errors, unusual figures or inconsistencies. Raising queries and managing potential mistakes straight away vastly reduces the potential for future tax investigations or anomalies within your reporting. It ensures you can have the peace of mind that your submissions are complete and correct.
- Recommending tax efficiencies – business owners may be eligible for various exemptions, allowances, grants and tax treatments, but a bookkeeper is not trained in these areas. A tax adviser can suggest options available to you that will reduce your tax obligations compliantly and legally.
Many of our clients operate as self-employed sole traders, limited businesses or partnerships, and a comprehensive understanding of the variations in tax liabilities and reporting obligations relevant to any trading structure is important.
A bookkeeper with a high level of professional accountancy knowledge can extract information from your data and collate that into useful pointers, using the ongoing bookkeeping process to provide valuable recommendations to ensure you make confident, informed business decisions.
Arranging an Obligation-Free Xero Demo
A partner business accountancy firm with Xero approval can offer a complimentary demonstration, ensuring you can see how the platform works and decide whether it is the right fit for your requirements.
You might be planning to scale up your business from a sole trader to an incorporated company and need to know whether your software has the user-friendly tools you require to record your incoming and outgoing transactions and raise client invoices.
This demonstration is a great opportunity to get a feel for Xero and discuss how to optimise your bookkeeping, tax reporting and record-keeping functions while using the experience of a Certified Adviser to ensure all your questions are answered in full.
Whether you’re currently using a paper-based or desktop bookkeeping program or are preparing for Making Tax Digital, Xero remains an excellent option, with import and migration tools to carry over existing records into your new system.
For more information about Xero bookkeeping services, transitioning legacy record-keeping processes into the cloud, or organising a demo, please get in touch with the James Todd & Co team at your convenience.
