There is a quiet revolution going on in the world of small business finance as people grasp the advantages of cloud based accounting. Many business owners are taking it one step further and buying ‘add-ons’ to their packages. These add-ons are programmes which integrate with cloud based accounting systems like Xero and Kashflow to give the business owner greater functionality and help them speed up internal processes.
In the case of Xero they have now got 400+ add ons, which cover a range of requirements. The systems include CRM systems, stock management, debtor chasing, automated payments and reporting – the list goes on. The only downside with so much choice is selecting the right add-on for your business. Fortunately many add-ons give free trial periods (often 14 or 30 days) so you can link the package up with your accounting software and give it a test run. In some cases the add-ons are feature rich which can be daunting when you first use them, but do persevere. The better add-ons also have friendly support teams who can guide you through the start up and any problems.
Xero also has an Amazon style review system for users to rate the add-ons. A quick look at the reviews will give you a sense of the pros and cons of the add-ons of each package.
Here is an overview of some of the more main stream add-ons currently available on a subscription basis.
Receipt Bank is a useful tool to reduce the time it takes to manually load receipts and invoices into your accounting system. The user has a few options to capture their receipts: take a photo of them, send them off in the post, use email or Drop Box. The technology can identify the name, the amount and the VAT on the bill/receipt and then pass this into your accounting software. The advantages of Receipt Bank are less time spent on data entry and reduced storage costs as files are stored electronically.
This add-on captures business mileage information using its GPS system. Tripcatcher also calculates the VAT you can claim on fuel. Once your trip is complete you can immediately publish your expense claims to Receipt Bank or Xero, thus avoiding manually calculating and submitting expenses.
This is an invoice chasing and automated credit control programme. It sends automated emails to chase outstanding invoices and links with Xero so it only chases relevant invoices. Satago also has a clever link up with Experian to provide credit reporting and provides a fully-fledged credit control CRM system.
The ability to link your payments straight to your accounting software so they can be matched against invoices is particularly useful in businesses where invoice and payment volumes are high. GoCardless provide a straightforward way for small businesses to take direct debit payments from their customers and these receipts can feed straight into Xero.
Obviously a mainstream transaction provider which has been linked very effectively with cloud accounting systems. The systems can handle receipts and payments and can work through foreign currency conversions if you are being paid in an overseas currency.
ServiceM8 won the much coveted Xero add-on of the year award. The software is designed for field service businesses and is proving popular with service companies that have technicians on the road so ideal for plumbers, heating engineers, electricians etc. ServiceM8 keeps track of jobs from the initial quote, through to job completion and invoicing. Jobs can be allocated centrally to the mobile workforce and movements and locations can be tracked using the systems GPS functionality. The invoicing is then linked to Xero to provide a fully automated system rather than manual job cards.
What do you do if you cannot find an Add-on?
As well as the mainstream Add-ons, there are several bespoke solutions using API links. API links are purpose built software to link a third party system to Xero. This can work well and, while developers will charge, fees are often not excessive.
The only downside to this approach is that the solutions are not tested by the accounting software providers so you cannot always be sure that solutions will work. If you select an add-on from Xero’s own web site they have tested the functionality to ensure that the integration works.
About the Author:
Mark Randall is a Chartered Management Accountant and a director at ‘Your Finance Team’. The company specialises in providing small and medium size companies with finance and accounting services. Mark has 20 years’ experience working in senior financial management positions from small venture capital backed businesses to large FTSE 30 organisations.