Business tax accountant tips: Avoid common Xero mistakes

Many business tax accountants believe owners of both start-up and big companies should already start investing in Xero. It could be a wise move as it makes the business operate smarter and faster, provide a better overview of the business' finances, and improve collaboration within the team.

Many businesses now use Xero to manage their books but no matter how long they have already integrated the use of this system for their business, owners should still be careful to avoid some common mistakes.

One of the mistakes that should be addressed soon is not allowing immediate online payment. All invoices sent by Xero by default won't be paid online immediately. You still have to add the payment service to Xero and once the customers receive the invoice via email, they can simply click the payment button to pay immediately.

Another common mistake that business tax accountants think owners can easily avoid is not setting up the charts of accounts properly. The chart of accounts has the list of all accounts in Xero where transactions can be allocated to. Business owners often set up different lines of expenses for light and power, office expenses, stationery, subscriptions and printing. However, they can have only one account for these office expenses and separate them into key expenses lines. This way, they do not risk the items being coded incorrectly.

Another big waste of time is following up with customers who haven't paid yet. For business tax accountants, this mistake of not following up unpaid invoices automatically can be avoided. It will cost you money if you forget about payments and you can simply use Xero's invoice reminder feature and utilise it for unpaid invoices.

This automated invoice reminder sends out a custom email template to customers who failed to pay after a specific number of days. You won't have to manually follow-up anymore and waste money for unsettle accounts.

What can you do?

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Whether you are a beginner, seasoned investor or business owner, our business tax accountants can give you guidance to maximise the financial areas of your life. We can also give you an integrated and tailored solution of your superannuation, taxation, property investment, asset protection, estate planning and more.

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