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How an elderly couple learned to manage their accounts in Xero
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Migration tales: The hesitant property owners


Riaz Kala dips back into his portfolio of cloud accounting adventures to recount the saga of a retired couple and their residential and commercial property empire.

8th Dec 2021
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Deciding the right strategy for each client when segmenting our client base was tough. Not only because the clients we were migrating were slower to adopt cloud technology, but because we wanted to get ahead of the MTD wave and ensure our clients enjoyed the full benefits that switching to the cloud brings.

Just saying, “You have to do this” wasn’t going to be the conversation we had with clients. We weren’t going to take the easy way out. There were many factors we considered when deciding when to migrate a client:

  • Their accounting year end
  • Their VAT period
  • The size of their business
  • Whether they were a digital native and their competence with technology
  • How good they were at getting us their records.

Time to retire the cashbook

Having previously resisted MTD for VAT, this particular VAT registered business (with turnover less than the VAT registration threshold) could no longer afford to delay the move to digital records and submissions. Having relied on a cashbook originally maintained by their old accountant friend, it was extremely difficult for them to change. Not only had this been the way for decades, but they didn’t overly enjoy using computers.

We got in touch a few months before their year end and talked to them about their need to register for MTD. They were still skeptical about moving to digital record-keeping and wanted to know if they could deregister for VAT as the option to tax on their commercial property had arisen a number of years ago. We determined they couldn’t deregister for VAT as one of the properties would not be eligible and so arranged a demo of Xero and Dext.

We also sent them a link to our migration page with our Xero demo videos. That way they could come armed with any questions prior to the demo. A few days before the demo we received an email from their son who had taken over their bookkeeping cashbook. He was unsure how Xero would help him categorise expenditure into different types, but also by each kind of property. Differentiating the types of property income was crucial to perform the partial exemption calculation for the mix of vatable and exempt income.

I explained that the videos were only the first steps and that I would run through tracking categories and how to allocate categories in Dext Prepare correctly.

Demo day

The day of the demo came and we went through some of the Xero and Dext features they would need to use. This included repeating invoices sent via email for monthly rental income, sending invoices to Dext Prepare via an email address and reconciling the bank with bank rules for those transactions that didn’t require any invoice.

They were a little uneasy at first, asking questions about whether their documents could be downloaded from Dext or Xero and if they could see a list of transactions per each property type (tracking category). But as we progressed through the demo they were amazed by how much time they would be saving by no longer having to write up bank transactions and invoices. This was on top of being able to find out who had not paid their rent as well as being able to send rent demands out via email without the need to post them.

They also really appreciated the other reports they could create such as a profit and loss to check their bottom line. They were initially apprehensive about the cost of the monthly subscriptions buy by the end of the demo they were happy that time saved would be well worth the money.

Helping this retired couple come to terms with the regulatory requirement imposed on them by HMRC is not the only reason we advocate the switch to digital accounting. Not only will they save time automating tasks, they’ll also have better visibility over their business and no longer need to store their paper cashbook and invoices.

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