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How are your clients managing with Xero

Going over a client's bookkeeping on Xero

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I've been going through the transactions that a client has posted into his Xero accounts, and I find a few errors, nothing major, but enough to render the VAT report incorrect. One example is managing to include payments to suppliers and the original invoices in the expense account, and so also in the VAT input account.  It's not hard to put things right, often by journals. But I am very conscious of the advertising for Xero (and QB for that matter) which makes it appear oh so simple, and I wonder how non represented traders are coping. I assume in blissful ignorance, thinking that the software makes it right. I wonder what your experience has been. Hard to believe the VAT reporting in general will be any more accurate than the old system

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23rd Oct 2019 13:27

Xero is an atrocious system, and I don't know why so many use it. It has no proper purchase or sales ledger, it usually fails to show a double entry, its drilldown is poor, it has no means of backing up and restoring data......

Only one client uses it, and they require a lot of work at the year end. The VAT is usually all wrong, and so is everything except the bank rec, come to think of it. That is mostly due to their ignorance about bookkeeping rather than the fault of Xero, but that software's weaknesses make corrections a lot more difficult than they should be. If they used VT Transaction+, the mistakes could be sorted out in a third of the time.

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Replying to JDBENJAMIN:
By darkmatter
14th Nov 2019 20:58

Ps update ..just checked ..$27m loss 2019 , compared to $24m 2018, despite huge increase in turnover

yea .. I admit I don't understand the Xero model ;)

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By Moonbeam
23rd Oct 2019 13:28

It's not the fault of the software writers that individuals without good training don't understand why they've made errors in their bookkeeping. I don't understand why you think any software could put right errors of principle.
We currently have an epidemic of advertising from bookkeeping software firms that imply you don't need any understanding of the rules and regulations to do bookkeeping or accounts. That is poor, but twas every thus.
My more intelligent clients - even on their first day with me - were well aware that no software could compensate for a lack of knowledge.

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By Chris.Mann
23rd Oct 2019 14:51

I came across Xero, for the first time, when I visited a new client, last week.
I'd gone along with some apprehension, particularly with the background of some Aweb member comments, over the last few years.
Xero had come to my client by way of being attached to a recruitment programme and Xero was an integral element of the package.
From what I could see, my client's wife, with no prior book-keeping experience, had made a fair fist of administering the initial transactions and from my point of view, in this particular case, the jury is at least still out. On another case, the transition from Sage, across to Xero, didn't work out and, they've returned to their original provider.
If I'm honest, I'm probably more cynical, as regards the Sage arrangement.

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By daniel_
23rd Oct 2019 15:20

Important to teach the client the difference between Spend Money transactions and (Supplier) Payment transactions. I drill into them that for a supplier it can either have Bill transactions and go via Payables or go straight from the bank, but never both.

Always found VAT is fairly easy to correct, you can use Find and Recode to search for and change the VAT code for a group of transactions. Any changed transactions are automatically included in the next VAT return. Always recommend using Find and Recode to correct the original posting instead of Journals to make corrections as it makes the drilldown easier to follow and easier to copy the previous treatment when a similar transaction comes up.

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By lionofludesch
23rd Oct 2019 15:41

I've one client on Xero. His records are atrocious.

It's a lot harder than he was led to believe.

It's not hard to put his errors right but I've more interesting stuff I could be doing.

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By accountantccole
23rd Oct 2019 16:13

Cracking bit of software if used right so I'd say that training is really important. Even if you are on fixed fees, getting tidy data is worth the upfront investment for longer term savings

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By ireallyshouldknowthisbut
24th Oct 2019 09:13

The negative comments on Xero are generally from people who don't use it, or are using it poorly. Several of the comments above suggest 'user error'.

As "pick up and go" software its pretty good, but like any software you do need to train your clients (and yourself) how to use it properly.

If you don't, it will be garbage in/garbage out like anything else.

The level of drill downs/error corrections/fast data entry options are IMO pretty top notch, as are features on collating invoices to transactions, not to mention semi-auto population of purchase invoices. It all in there, but you need to learn how to us it, in order to then build decent routines for your clients and guide them to it. No-one in their right mind would give a client a SAGE disk and expect them to do their bookkeeping.

I find when going back to a SAGE client its like a trip back to the bad old days and a sharp reminder how far things have come on.

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By Cat N
24th Oct 2019 10:28

Personally, I think Xero is one of the best softwares and we use it for most of our clients. Obviously, if the person using it don't know what he/she is doing and don't understand bookkeeping, there will be lots of mistakes - but you can't blame the software for that.

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By Jo Nokes
24th Oct 2019 10:34

I wasn't actually complaining about the quality of Xero as software, but trying to find out whether clients were using it and making mistakes because of lacking the requisite knowledge, and extending that thought to unrepresented traders, and the likelihood of their bookkeeping going wrong. On reflection, it was a daft thing to ask, because you won't know the answer. Of course, I agree about the need to train one's own clients, but that is quite time consuming

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By adam.arca
24th Oct 2019 12:33

I've only got a couple of clients on Xero.

One doesn't do a great deal on it other than raise invoices, leaving us to sort pretty much everything else out. He likes it though as it means we don't need to email backups between ourselves (so, really, he just likes cloud software rather than Xero per se).

The other has just moved over. He previously had a bookkeeper using Sage but, tragically, she's just died after a terminal illness; he's now doing the bookkeeping himself on Xero and, to be fair, making a good job of it too (I would never have trusted him anywhere near Sage or the like).

Personally, I think Xero is absolute dog[***]e as a piece of bookkeeping software and I would much rather use Sage (and I'm far from a Sage lover), but I do think we have to accept as accountants that the clients who get along with Xero are also the clients who don't want to do it our way because they find the way that Xero handles stuff makes sense to them (even though it makes very little sense to me and I just wish it would let me use ledger accounting the way I am used to it).

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By johnt27
24th Oct 2019 13:32

Bookkeeping errors are as old as Pacioli and irrespective of the silver bullet promoted by some (AI) as the saviour of bad accounts recording this isn't going to solve these kind of problems for a good few years yet.

The key to this is first being able to identify the errors, second being able to correct them easily and third training the client, bookkeeper or whoever to try and minimise these errors occurring again. Xero IMHO is the best system out there for 1, 2 and 3 (to some extent).

If you have concerns over the quality of bookkeeping on Xero, in particular, I'd highly recommend you check out Xavier Analytics and Quikk. These two tools alongside Find and Recode in Xero are invaluable.

As for the adverts - who ever believed anything in one of these?

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By Thomas654654
24th Oct 2019 18:02

I use Xero (and know how to use it) and I hate it. It's online Sage. It's not one thing in particular, I just dread using it or getting books from clients in it

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By AJF499
29th Oct 2019 00:16

I have used Xero for nearly a decade, have worked for a few 'Xero only' practices and have to say I think its the best out there. It isn't perfect and it can't do everything, but I'm yet to not be able to find a work around when needed. I've moved many clients from Sage or spreadsheets onto Xero and not one of them has wanted to go back to the old way.

I find the problem with Xero is clients thinking they can do it themselves easily, or accountants and bookkeepers not wanting to change their ways and learn new systems because 'we have always done it that way'.

With proper training, both clients and professionals could use it properly and very effectively, sadly that seems to be lacking on both fronts - but that isn't the fault of the software.

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By darkmatter
14th Nov 2019 20:52

I think the real question is .. Are Xero making any money now ?

I remember a couple of years ago one of their reps telephoned, I said they seem to be just making huge losses each year , eating into capital ,and at that rate they would be gone in "x" years without further funding.. to which he said that "I didn't understand their model".. over the next few years they continued to erode their capital base, ..some model.. but then again we can all be wrong

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By darkmatter
14th Nov 2019 21:03

I think xero is like a book …. "Noddy does accounting"

Some clients think its great…

that tells you everything you need to know

I hear they are going into tax software soon ...

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