The three great essentials to achieve anything worthwhile are, first, hard work; second, stick-to-itiveness; third, common sense. (Thomas Edison)
Many may have heard of Xero, and wondered what all the fuss is about. It's not perfect - but it does have a lot going for it, and it's continually getting better. We think it's been oversold to small businesses as solving all their woes. It still requires a basic understanding of accounting.
Xero is different from traditional accounting packages - with some benefits and some disadvantages. But when it's good, it's very good. This includes for example, FX accounting. With access to the Internet required, they've been able to do a lot of work to simplify this area. So what's it all about?
Well, the first thing is it's web-based. So for example if you use Windows or Macs or Linux or any other system, you should be able to use this. Of course I can't guarantee it will work perfectly in every situation - but I can guarantee that you don't need to use Internet Explorer - we use Firefox and other use Chrome.
Also helpful is the fact that one of the key people behind it is a qualified accountant from public practice. Of course I'm biased aren't I - but this system has clearly been written with a few local things in mind - like the Companies Act, IRD etc. I'm not sure if it's as good in other countries - but we have the advantage of the developers being in NZ.
Being web-based allows them to offer many advantages - such as daily access to bank accounts, and immediate access to exchange rates. The way this system handles exchange rates has allowed one of my clients to do away with much complex and error prone accounting - it just does it all invisibly but accurately.
Of course that's not the only advantage of a web-based accounting system. It can be accessed anywhere by anyone (with appropriate authorisation). Backups and maintenance are no longer issues - unless of course the Xero company has not faced these problems - but from what they tell us, the systems are global with heavy duty backup and duplication.
So what are the disadvantages? Well, many firms require stock / inventory. This system does not handle significant stock, although it does interface with systems like Unleashed - a web-based stock system.
There are other questions in people's minds - some don't like being dependent on the Internet. While at times (e.g. school holidays) performance can be affected by heavy loads on the Internet, and there are limits of the ageing IP4 addressing system, the Internet is part of our world today. Of course the new fibre system should see significant improvement. I suspect that if it is knocked out by a nuclear war, we might have a few other things to worry about . But that's the beauty of the freedom we have. The choice is ours. If we opt for a more traditional system, that will work for us too.
For further information on Xero, check out Xero's web site, or talk with us.