Accounting is moving to the online world whether we like it or not. At Trinity Accountants we think it’s the right way to go and it comes with so many positives.
Making Tax Digital (MTD) becomes mandatory for VAT registered business on the 1st April 2019 and we covered the areas you’ll need to consider in our recent MTD blog.
With this change comes many questions for businesses but these ‘forced’ changes will likely benefit them. One of the key changes will be arguably one of cloud accounting’s biggest plus points – online invoicing!
If you’re creating invoices in Excel, Word or anywhere else then you might want to read on because the benefits to online invoicing are really exciting and will transform your invoicing, cash flow, and credit control. And it’s so much easier than you think.
Speed up your invoicing
Online invoicing helps you ask for money more quickly. Now you don’t need to wait for a bookkeeper to create the invoice and with recurring invoices you don’t need to send them at all – it just does it for you.
Xero enables you to create invoices on-the-move too from their brilliant app so you can invoice a client right there and then and in many instances get paid right away too!
Recurring invoices? No problem. Xero has a repeating invoice function so you can set up a repeating sales invoice. Invoices are completely customisable including the editable template and the payment due date and payment terms, which you can edit once on the repeating invoice and send forever more!
You can also schedule invoices. How many times have you started some work for a customer but didn’t want to invoice right away but you know you need to invoice them in say a week from the start of the project?
Xero will allow you to create an invoice as soon as you’re ready to and then set a date for the invoice to go out. The invoice will land in the inbox of your client after you’ve forgotten you even created it.
None of this takes much time and the repeating invoices saves you hours every month and ensures you never forget to send one (yes, plenty of our clients tell us they’ve accidentally missed invoices here and there).
Better invoice tracking
Once you’ve sent invoices from Xero they go into your reporting system so that at any point you can see what’s due, what’s overdue, and how much you’ve invoiced (amongst many other great report options).
The very nature of online invoicing means that you can view this data wherever you are and from any device and some of those top-level reports are even available on the app.
This gives you greater control over your cash and a better view of your business. It’s a win for your business, we think you’ll agree.
Saves your paper
You don’t need to post out your invoices and you don’t need to print them off and keep them either. Making Tax Digital is all about helping businesses submit their tax online to HMRC but it also shows us that the days of paper in accounts are at an end. With invoicing online, your data is all online – so you don’t need to print it!
You need to keep records, for sure, but Xero has it all online for you should you ever need to resend an invoice or supply records to the HMRC.
Cash flow (or lack of it) is the number one reason 80% of SMEs fail in the first few years. Who’s got that cash? Usually your clients. Getting your money in faster and in a more timely fashion helps your business to survive those tricky times.
Good cash flow can be achieved in many ways but giving your customers the ability to pay you quickly is one really good way.
Xero even lets you take payments online with integration to other payment suppliers like Stripe, leaving your client no excuse but to get their wallet out.
Help remind your clients
Of course, not everyone will pay right away so you need to stay on top of your debtors. Reminding clients to pay can be a pain and some people find it awkward, particularly if you’re the person doing the actual work for them too. Automating this is great, and it’s all possible in Xero.
You decide how much credit your customers get, set it in their account on their invoices, and then Xero will send chasing emails to them (which you can personalise) depending on your due date.
Don’t want to chase a certain client for whatever reason? No problem, you can turn it off for individual clients.
Personalise your invoice system
A great feature of Xero is the ability to personalise and brand your emails.
A few of the great options include:
- Add your logo to the invoices in your settings (so it affects all invoices)
- Change the font for the invoice so it’s in line with your branding
- Edit the automated email that sends it
- Set a specific due date or chose from X number of days from the invoice or the month it’s sent
- Set the payment terms for all invoices
- Select which fields will be shown (registered address, Tax number, contact account number)
- Show VAT as included or excluded
Repeating invoices also have smart ‘placeholders’ which add in a week/month/year/week year/month year text to your repeating invoices in the product line and the reference too, making it easy for you and your client to know which period the invoice relates to.
Online invoices makes good business sense…
Getting paid faster, managing cash flow, and automating your regular clients makes a lot of sense to your business. Compared to using Excel spreadsheets it will certainly improve cash flow and save you time and money.
Xero is just one of the options you have to go digital with your accounts which, if you’re VAT registered will be the only way from April 2019, but as we’re a platinum partner we’re keen to show you the benefits of this brilliant bit of software.
Need more help to get your accounting and invoicing into the cloud and benefit from all that online invoicing has to offer? Contact one of our team today