Xero and QuickBooks are both cloudbased accounting packages that are regularly updated and have important features such as automatic bank downloads and rules. But which one is right for your business? It depends very much on your specific requirements – here are a few differences to help you decide:

• QuickBooks’ Advantages
  • Multi-currency can be included from the 2nd level ‘Essentials’ subscription, which is cheaper than Xero’s first multi-currency option at level 3 ‘Premium’.
  • Revolut personal bank accounts can be linked to the automatic downloads. Only business Revolut accounts are currently supported by Xero.
  • USA focussed, which means all the complicated different state tax rules are catered for. If you are US tax registered, of course.
• Xero’s Advantages
  • All contacts, both suppliers and customersv can be viewed and searched as one list. This is very helpful because it speeds up contact searching and because some suppliers are also customers.
  • Xero’s plugins (eg: Parolla) mean that you can be sure that you are Irish Tax (ROS) compliant. QuickBooks is currently not Irish tax specific. https://www.revenue.ie/en/online-services/support/documents/help-guides/ros/ros-compatible-3rd-party-software.pdf

Is it a good idea to set up automatic bank allocation rules in my accounting software? Here are a few of the potential pros and cons.

• Positivies of setting up bank rules:
  • Saves a lot of time. Especially with regular, unchanging and obvious transaction allocations such as monthly bank charges or subscription fees. Making Time for more important things like understanding your financial reports.
  • Reduces human error because you only have to choose the correct account allocation details once.
  • You can add new rules as you go along and find more repeating transactions.
  • The rules can be set up for a range of amounts, so you don’t have to know the exact charge up front. (For example: with itemised phone bills , you only have to look at amounts that are higher than a certain threshold)
  • Bank rules can be set up to automatically allocated transactions, or to suggest an allocation and require your acceptance. This extra step can be helpful as you test out your rules and check you made no mistakes in their set up.
  • You can set a rule up by copying a transaction you are currently allocating, so it is quick to do and easy to check.
• Potential negatives of automatic bank rules:
  • If you make a mistake when creating the rule (eg: select the incorrect account to allocate the cost to), it will repeat this error every time this transaction appears on the bank statement. This is, however, generally easy to fix once detected.
  • You can only set up bank rules if you are automatically downloading the bank transactions from your bank. Automatic bank downloads is something that we heartily recommend; both as a time saver and an manual error reducer – Making Time for more important things.
  • Some transactions are too complicated to be automated, so there will always be a few that need to be manually allocated.

Happy allocating.

We are often asked whether it is necessary to set yourself up as a limited company when first starting out, or if working as a sole trader is best. Here are a few things to consider for each option:

• Sole Trader
  • + No upfront legal registering of company or annual financial reporting necessary.
  • + You still have to tell revenue that you have started operating as a Sole Trader (Revenue.ie, or ask us to help.)
  • + You can still register a business name if you don’t want to trade under your own name. (Business Name, or ask us to help.)
  • – You will be personally liable for all business debts
  • – You still have to submit an annual tax return and keep accounts with receipts/invoices etc.
  • – You will pay tax at individual rate (much higher than company rate).
• Limited Company
  • + You will not be personally liable for the company’s debts (unless specifically agreed with the creditor)
  • + You pay tax on all your expenses at the company rate (much lower than individual rate).
  • + Once you hit a threadhold of income, you will register for VAT. This means reporting and paying VAT every 2 months, but also that you get the VAT back on all your expenses. (VAT registration, or ask us to help.)
  • – You must register your company with Companies Registration Office (CRO, or ask us to help.), including having at least 1 Director, a secretary and a Constituion.
  • – You will need to file annual financial and tax returns and in some instances, have your reports audited. (This is our speciality – ask us to help.)

Why do we recommend our clients choose Xero as their accounting platform? There are many little reasons why Xero is a good choice, but here are a few of the main deciders.

1. Xero is all online. This means that you can login and do some accounting work any time, any where. Also, you will always have the most up to date accounting information no matter where you log in from.
2. With lots of security features, like 2 factor authentication, your data is always secure.
3. Xero is constantly being updated and their helpdesk are active and helpful. Xero is continously adding new features (for example: projects and new menus to help navigate easier)
4. Xero can automate several tasks, including: bank feeds, follow up on late customer payments, regular customised reporting.
5. Because it is so widely used, there are many useful plug ins that you can use. Including Stripe, Payrolla, Shopify and many more.
6. Multi currency. Xero allows you to do your accounting in however many currencies you need. For example: you can invoice clients in a foreign currency, and easily reconcile it to the bank transction in your local currency. Xero handles the account of the exchange flucations automatically for you. Making you more time.

What are the bits of work that I should prioritise when cleaning up my customer data

When cleaning up your customer data, to get it ready to migrate to your new Xero system, here are a few reports you should run:

1. List of customers – so you can check for duplicate customers.
2. Archived/Inactive customers – Do any customers who are marked as archived/inactive still have open balances that need investigation?
3. Income/Invoices by contact – compare income over the past year/18 months to the full list of customers, so you can see what customers have been active recently and which one you might want or archive and not transfer across to your new system.
4. While preparing to migrate, make sure your customer’s contact details are up date. Especially phone numbers and email addresses.

One of the most common questions we’re asked is: ‘How much historical data should I migrate to Xero?’ The answer depends on your business needs, but here are some general guidelines to consider:

1. Migrate the current financial year plus one year of historical data. This provides a good balance between having useful comparative information and keeping your new system clean.
2. Which historical data do you regularly reference? Sales history for key customers, supplier payment records, and project profitability are often worth migrating.
3. You can always keep your old accounts system accessible for a transition period and then export historical reports you find you periodically need.

Learn how to effectively handle historical financial data when migrating from Sage to Xero, including what to bring over and what to archive.

When preparing for a Sage to Xero migration, one of the most important steps is reviewing your chart of accounts.

1. Start by having a quick look at your chart of accounts to see if you can identify unused or redundant accounts.
2. Next, consider how your account structure will translate to Xero’s environment. Xero has a different approach to account structures in some areas such as grouping, bank accounts, inventory and fixed assets.
3. Consider consolidating similar accounts and creating a more streamlined structure that will be easier to manage going forward.

Timing is everything when it comes to a successful migration. Schedule your migration during a naturally quieter time for your business. Here are some business restraints to take into account when deciding on a migration date.

1. The ideal time to migrate is during a naturally quiet period for your business when there’s less financial activity to manage.
2. Avoid month-end, quarter-end, and especially year-end periods when accounting workloads are typically at their highest.
3. If your business has seasonal fluctuations, target the slowest season for your migration.
4. Also consider your team’s availability – ensure key financial staff aren’t on holiday during the transition period.
5. Think also about choosing a less busy bedding in period as staff will need time to get used to the new system.

One of the most critical steps before migrating to Xero is ensuring all your bank accounts are fully reconciled up to the migration date. This process involves matching your accounting records with your bank statements to confirm that every transaction is accurately recorded. But why is this step necessary?

1. It establishes clear opening balances for your accounts in Xero. You never have to do manual adjustments to agree to accounting reports.
2. After migration, you’ll need to verify that your financial data has been transferred correctly, and having reconciled accounts makes this verification process much more straightforward. No exceptions to keep in mind.
3. You will know that any errors you encounter in the future, were not caused by the original importing of data.