Say Goodbye to Excel with Xero/QBO & FUTRLI
Posted on 3rd October 2017 in Cash Flow
Written by Freya Hughes
Running a company offline can feel like you’re floating through space. You can’t get a grip on where you stand and what you need to do to improve. While gravity-free can be a fun experience, you don’t want to feel like you’re not on stable ground in business. Excel is a brilliant bit of kit – it doesn’t matter if you’re in startup phase or an international brand, you need to be using the best stuff out there to keep pace with your competitors. So, wave goodbye to Excel and welcome cloud accounting software with open arms. Here’s why this is a ‘must’, not a ‘should’.
While Excel is an incredibly versatile tool, it can massively let you down at times. It can do the job if you’re simply storing data in it (but hold that thought…), but when you want to grow your business, you really need to be on board with a real-time cloud accounting platform. Be it Xero or QuickBooks Online, via the cloud is the only way to be operating. Both Xero and QBO data is automatically synced with FUTRLI. Our platform constantly pulls in data, refreshing regularly, so you know that the data you’re viewing is accurate and completely up to date.
If we cast our minds back to the Christmas of 2015, thanks to a spreadsheet error, the first British astronaut Tim Peake ended up being mistaken for a drunk reveller. Calling a number he expected to be his family, Peake said Microsoft Excel had rounded up a number in his list, leading him to accidentally dial a different UK address. The unsuspecting grandmother on the other end of the phone hung up after hearing a strange man’s voice say: “Hello, is this planet Earth?” on Christmas Eve.
I'd like to apologise to the lady I just called by mistake saying 'Hello, is this planet Earth?' – not a prank call…just a wrong number!
— Tim Peake (@astro_timpeake) December 24, 2015
While this isn’t the worst thing an Excel mistake has resulted in, it goes to show that even using Excel to store phone numbers isn’t safe. So in the business world, you’ve got to ask yourself is using Excel worth the risk?
Intuit know the downsides of spreadsheets, in particular noting the notorious problem when using spreadsheets for your business:
“Excel might work when you first start your business. But as your company grows, things change—you might change your prices, raise financing, roll out a few new products or hire a few people. Before you know it, your spreadsheet can’t keep up.”
Get your feet on stable ground
Looking to the Xero blog to see what they have to say about their accounting predecessor, they’ve come up with seven reasons why you must come off spreadsheets. They have been at the forefront of cloud accounting for over ten years now, and know exactly what they’re talking about when it comes to accurate reporting. Combining Xero/QBO with FUTRLI allows you to input your figures into a forecast. This means not only are you looking at relevant data, you’re able to project what your figures are likely to look like in the next period. If you’ve ever tried to forecast using Excel, you’ll know it’s an arduous task, and you rarely get reliable results.
Here’s Xero’s round up about the benefits of using the cloud over spreadsheets:
1. Hit the ground running with confidence
“An easy-to-use dashboard is one that you don’t have to set up yourself and will give you confidence from the get-go. When you have a clear financial view from the start, you don’t need to worry about making uninformed business decisions.”
2. Your data is accurate
“Your company’s real-time financial data is kept in one central place – online, in the cloud. Bank statement lines are fed into your software – it’s automatic, and reduces the amount of data entry and potential mistakes.”
3. Out-of-box reports
“Get most of the reports you will ever need, with a few clicks – no need to wait for month end. Real-time reports and budgets are easy to view and share. Tasks like sales tax returns can be completed in minutes instead of hours.”
4. Up-to-date information
“Create the information any of your investors might need at a moment’s notice. Your small business will be equipped to manage its finances better and more accurately. This is especially important around tax time when data will be shared with an accountant or financial advisor. Financial tax information is always up-to-date and ready to share.”
5. You’ll have a clean audit trail
“All of the historical information that your investors might need is available at their fingertips. A proper audit trail ensures your data cannot be compromised. It also records every business transaction. This includes sales contracts, payments to employees, and more. Having a complete audit trail reassures investors about the validity of the company and meets the tax department’s needs.”
6. It syncs with other business applications
“When you use cloud-based software, you’ll be able to take advantage of apps that sync with your financial data. Inventory management, invoicing and a whole lot more can take the time and hassle out of small business accounting.”
7. Access to data anywhere, anytime
“Give any member of your team access to your data online anytime, anywhere (as long as you grant them permission to do so). Cloud software enables you to share your financial information with your employees, accountant, bookkeeper or financial advisor.”
Reaching new heights
Now you know why you must get away from spreadsheets, let’s have a look at how easy it is to get on the cloud. As we learnt when looking into making a scaleable cloud practice, the following reasons are why you need to be online, asap.
- Clients need immediate access to their figures. They want and need to see their figures at a moment’s notice, and in an age where so much is automated people are expecting you to keep up.
- Clients are always looking ahead. If you’re just keeping your clients compliant, then you’re not the right accountant for them. No offence intended here, but if they can look to the future, it’s your job to do so as well. Forecasting is the only way to keep pace with your clients’ way of operating.
- Clients need guidance. Not every single one of your clients is going to ask you for your opinions, but a significant amount of them would benefit greatly from your knowledge of industry. You’ve seen what works and what doesn’t, so make some money from it! You need to be asking them questions and looking at trends next to forecasted figures.
- Clients need goals. Some of your clients will have very rigid targets, and this is a double-edged sword. Sometimes the rigidity will prevent them from being agile and moving with the times, while conversely, targets are a crucial part of staying on the right path.
It’s all about putting your clients first – they need to be your number one priority, after all, they are your revenue. If you’re not selling what they want to buy, you’re taking yourself out of the running.
When you have your figures, or your clients’ figures, in the cloud, you have immediate access to them. This is so important, for both business owners and accountants. If you’re the latter, then shifting to the cloud means you can adjust pricing, sell services with much higher value, and ensure you’re hitting the mark for your clients.
We looked into a fascinating report on what millennial business owners really want from their accountants, which had some really insightful results. 31% of business owners prefer to have set rates. This is hugely beneficial to both parties:
- Business owners will know exactly how much to budget for your services, which will simplify their forecast. Having this monthly amount accounted for and planned for will placate some of their worries of their outgoings. For you, this is brilliant! You can wave goodbye to hourly billing, which can be quite detrimental to your firm as you may spend many hours preparing their admin on clients behalf.
- Accountants can earn more – you could be missing the mark with how much you should be earning per client. Adopting a monthly payment scheme will benefit your firm as you’ll be able to rely on MMR (monthly recurring revenue). So long as these monthly clients are being looked after to the best of your firm’s ability, you’ll notice you’ll have extra time to work on your referral count and hunting down new leads.
Shifting to this way of working is going to fatten up your firm’s bank account, and you’ll know you can depend on MMR.
Blast off to success: get your forecast set up
Xero acts as your foundations. Essential, reliable and strong software, it’s designed to build upon. And Xero has an entire marketplace that you can browse to find the best add ons for your stack – see our top picks here. Your foundations are a fundamental part of your plans and you want to elevate your client’s company.
FUTRLI grows upon Xero’s base layer. Where Xero finishes, FUTRLI takes it to the next level – because while it’s essential to have a reliable cloud accounting software, you need more to sustainably grow your company. It’s surprisingly simple to set up your forecast, as you’ll see from these three easy steps:
- Navigate to the ‘Scenarios’ section of FUTRLI. This is where you build everything from budgets, to scenarios to effortless cash flow forecasts. Before you can create your projection, you first need to enter your tax settings and map your default bank account, accounts receivable and accounts payable lines. These only have to be entered once, so let the system work out the core automatic calculations for you.
- Use your historical data to instantly create a picture of how you expect the business to perform in the future. Adjacent to your organisation, click ‘New’, which will give you four main options, one of which being ‘Create from Last Year’s Actuals’.
- Once you press ‘Quick Create’, FUTRLI will look at your profits, costs and overheads month-by-month for the 12 months prior to your scenario’s chosen start date. These will then be applied going forward, thus ensuring that any seasonal variety is taken into account. For example, if sales are higher in March and lower in April, you’ll see that factored into your projection.
And you’re done! But why stop there? Having a forecast is a must, but there’s a lot more you can do to get a grip on your figures…
Tracking your reporting
Xero’s Tracking Summary Report does what it says on the proverbial tin. With this way of reporting, you can generate a list of your tracking options, showing the activity in a particular group of accounts for a particular time period. Set the time frame you’d like to see, add your account group (eg ‘sales’), and add your tracking category. This might be branch location, for example. Xero’s tracking categories (and class or location categories) enable you to monitor different areas of your business. This way, your reports help you make proactive business decisions.
At FUTRLI we’ve taken this functionality to the next level. We’ve made sure you can forecast against individual tracking options, and filter any report by tracking options. There are no restrictions on the time period you want to analyse. This is because you can’t get a grip on your business if you’re chasing around for information: to protect your business from any nasty surprises, you must look at the full picture. Drill down into incomes and costs, and create custom KPIs and formulas for all your Tracking Categories.
Sales and purchase information can be tagged effectively with the departmental names that you assign. We have users who are tagging their data by region, by project name, by sales person, by department. We will let you run reports that allow you to benchmark each one against each other.
We can’t stress the importance of using industry-specific tools. Using spreadsheets is widely acceptable for the use of startups, but honestly, it’s best to use platforms such as Xero, QBO and FUTRLI from the off. You’ll be starting on good footing, and ingraining good habits.