A heads up, in this blog we say: “this will save you a lot of time, stress and money” a lot (but that’s sort of the point). Here are 7 practical, transformative tips for tradie business owners who use Xero.
#1 Avoid a tonne of data entry by syncing your bank feeds
Picture this: all your bank transactions automatically flowing into Xero, ready for reporting at the click of a button. No more manual data entry. Syncing your bank feeds means you'll save precious time and gain a clearer, more accurate view of what’s really in your bank.
Benefits You won’t need to print bank and credit card statements, go through transactions line-by-line or input all that data into a spreadsheet. When we say you’ll save a lot of time…we mean, a lot of time.
#2 Save a bunch of time on repetitive transactions by using “bank rules”
In Xero, bank rules are automated instructions telling the system how to categorise and treat certain transactions in your bank feeds. They're essentially filters helping Xero understand how to process your repetitive financial data more efficiently.
Instead of manually categorising each transaction, you can set up bank rules to automatically assign the correct account code, tax rate and other details based on your specific criteria.
Example
You can create a bank rule telling Xero to categorise any transaction containing the words "rent" or "lease" as a rental expense. Or, you could categorise all payments to the same supplier as office supply expenses.
This feature is particularly useful for transactions that occur regularly or have consistent patterns like loan and mortgage repayments, bank fees or recurring expenses.
Benefits When line items are categorised properly, you’re much more likely to save on tax and maximise what’s available to you. Bank rules save you tonnes of time on data entry and, as it’s automated, it reduces the chance of “human error” (meaning greater accuracy in your reporting). It's a powerful, clever feature that makes managing your finances just that much easier.
#3 Improve your cash flow by automating repeating invoices and bills
Invoicing is arguably one of the more frustrating, time-consuming tasks to come with the territory of owning a business. It’s also one of the most important tasks to complete accurately, on time and to monitor.
With Xero, you can automate any repeating invoices that will send themselves out like clockwork. This ensures your customers are notified on time, meaning you’re much more likely to be paid on time. You can also automate outgoing payments to suppliers, which removes any looming worry about forgetting payments and/or aggravating trusted contractors.
Benefits This feature saves you time but, more importantly, it saves a lot of unnecessary stress. It means:
- Less chasing
- Less late invoicing
- Less late payments
- Less cash flow issues
- Less outstanding payments
- Less penalties
There’s just a lot of “less” with this one.
#4 Send quotes and invoices through Xero
If you don’t use a tradie app, you can create and send professional quotes and invoices through Xero (whether you're on the job or in the office). This means quotes and invoices are all in one place, instead of your email’s sent folder or spread out over a hard drive.
Benefits
Impress your customers with professional processes. A bonus is you can see if a customer has opened a quote or invoice which will inform you on how to follow up.
#5 Take advantage of the payment options and automated reminders
The more payment options you have, the more flexibility your customers have. That means faster payments overall. From bank transfers to direct debit to credit cards, you can track their payment status in real-time. If those payments still don’t get paid, with Xero’s automation tool, you can send reminders for all outstanding payments in one fell swoop.
If you think about it, the time and energy saved by doing this is huge. Less brain space is taken up by tracking, manually sending out emails or weighing up what language to use. Additionally, automation takes out the emotional labour and any opportunity to ask for payment “wiggle room”.
Important: with this feature you do need to stay on top of your reconciliations. If the customer pays after 2 days but you haven’t reconciled that on your side of the books, they’ll still receive a chaser!
Benefits This one will have a huge positive impact on your cash flow. You’ll get paid way faster and more reliably if you offer multiple payment options and set up automated reminders.
#6 Streamline receipt and record-keeping with Hubdoc and Xero's app
The Hubdoc and Xero apps are excellent supporting software that come free with your Xero account. You can snap photos of receipts and PDF invoices with Hubdoc and upload them straight to the platform. This will keep your records organised and your tax return safeguarded because you have all your evidence stored in the cloud.
The really cool feature here is over time Hubdoc intuitively learns where to allocate receipts or invoices. It’s just another one of those simplifying, time-saving hacks that will make your working life just a little bit less task-based.
Benefits This software is a game-changer for busy tradies who need to stay on top of their finances while on the move. Bonus, no glovebox full of receipts.
#7 Reduce the chance of error with Xero's batch payment feature
Let’s say you’ve got 10 invoices to pay. Instead of inputting every account number, personal detail and amount manually, you can pay them all at the same time with the batch payment feature.
Once you’ve set up the accounts you want to use in this feature, you can select the items you want to pay and make all of the payments together. Paying suppliers and employees on time and accurately has never been easier.
Benefits Settling payments manually is an infamously rife area for human error (think about any time you’ve been paid too much or too little). Batch payments completely sidestep that issue.
It’s safe to say we love Xero but we love tradie businesses more.
Supporting hardworking, driven tradie business owners is our thing. They’re key players in local communities, often led by highly skilled, committed owners who really care about their quality of work. It’s the type of work that demands a lot of attention at the front end, which is why we know our skills are needed at the back.
If you’ve got goals of running a solid enterprise that provides dependable income for you, your team and your family. We want you to have that, and we know you can have more too.
Get in touch here.