Accounting software firm Xero has released two new features on its platform designed to help small business owners improve cash flow.
“Small businesses using Xero got paid 30 days faster in 2014 than they were in 2011, resulting in a significant improvement in cash flow and productivity,” the company says.
“Small businesses in New Zealand have had an annual closure rate of 13% in the past three years, therefore having a solid plan in place to manage cash flow is essential to ensuring that fledgling businesses survive and even thrive.”
The company says traditional accounting solutions have failed to give small businesses the capability to automate key tasks. “Xero is changing the way small businesses operate delivering customers a constant stream of new features to drive efficiency across their business,” it says.
“Billable Expenses and Invoice Reminders will give customers new ways of ensuring their cash flow is maintained, while getting time back from the drag of administration to get on with running their own business.”
Victoria Crone, managing director, Xero New Zealand, says understanding and managing cash flow is critical for any small business to flourish.
“Streamlining the invoicing process to include billable expenses and reminders means that businesses on Xero can now reduce the time and effort it takes to get paid,” she says.
“Accurate financial data also supports business owners to plan and make better business decisions to thrive.”
Invoice Reminders will help small businesses from being a bank
“Outstanding invoices are a burden for any business – big or small,” says Crone.
“ In addition to not being able to put this money to work for the business, conversations surrounding outstanding invoices can be uncomfortable.”
Xero’s Invoice Reminders will launch in the next few months.
Time sensitive Billable Expenses Commonly referred to as billable expenses, on-charges or reimbursables, these are costs incurred on behalf of a customer when supplying services or products, Crone explains.
“Recovering these expenses from a customer, as quickly as possible, is key,” she says.
“Incorrectly tracking and billing back to clients equates to taking a loss to revenue and profits.”
Rather than stashing receipts in shoeboxes, or using spreadsheets to track costs, Xero’s Billable Expenses allows users to mark a bill line item as a ‘billable expense’ and assign the item to a contact so that it can be applied to future sales invoices.
This feature provides the ability to easily track costs associated with a particular contact and recoup costs. “This is critical for protecting profit margins and maintaining healthy cash flow,” says Crone.
Crone says Xero’s Billable Expenses and Invoice Reminders will be introduced to customers in three distinct phases.
“From now, small businesses can use Billable Expenses to recoup costs and protect profit margins by recording expenses in bills and other transactions that need to be on-charged to a customer,” she says.
“Over the next few weeks, Billable Expenses will continue to evolve, allowing bank account transactions to be tagged as Billable Expenses, while Xero’s library of reports will be updated to allow for reporting of Billable Expenses.”
Crone says Xero will make Invoice Reminders widely available over the next few months.