Taking care of business - online bookkeeping with Xero

This financial year I decided to take a more proactive role in the management of Chilli Chocolate Marketing's accounts. My bookkeeper suggested that I purchase and install MYOB myself to accomplish this, but for a number of reasons I was reluctant to purchase and rely on a standalone software package installed on one particular computer. So I asked around and conducted quite a bit of research into online accounting systems and the name that kept coming up was Xero.

One of Xero's biggest initial selling points for me was that it plugs in to Freshbooks, which is the system we use to do all our invoicing. However my biggest concern was whether or not I could import the existing data tied up in the bookkeeper's MYOB files and sync it correctly with Xero.

So I went to the firm that had been handling my bookkeeping up to that point and asked if they would verify after migration to Xero that the data was all correct once in the new system. However we didn't get to talking about the actual details of a migration because the firm’s position was that online accounting systems were inherently unsafe and insecure.

It was then that I realised that I would have to look elsewhere for someone who could help me covert to this new technology. And, the world being what it is, I turned to my Social Networks.

I logged on to LinkedIn and became a member of the Xero LinkedIn group. Through that LinkedIn group I found Gillian Rossouw, operator of Jill of All Trades, an integrated accounting software consulting firm. Gillian is extremely proficient with both online systems and MYOB, and she has set up a number of processes to enable data-sharing between them. She also has an collection of glowing testimonials from happy clients and partners - including the Xero and MYOB developers themselves! - so I knew I wasn't talking to a cowboy. She was definitely my first choice.

What happened in our first conversation was a bit surreal. I found out not only was she a firm believer in online services and using new technologies to run a business but she also knew that The Station Cafe at Waikato University in New Zealand made the best kumara, pumpkin, and ginger soup and that lunch at the Hillcrest Tavern in the good old days meant jugs of beer and the best sauces on wedges that you could buy anywhere in the Waikato. It was really funny to come so far and then (virtually) bump into someone who had had frequented my old Uni haunts. I was really comfortable talking to Gillian and any apprehension I had evaporated in that first conversation. First choice? After one conversation she was my only choice.

One thing that I found really reassuring is Gillian's familiarity with both Xero and MYOB, such that she knows the internal codes and metadata used by each system. In simple terms, code "01" in MYOB might represent administration costs while in Xero "01" might represent motor vehicle expenses. Gillian is able to migrate the information from MYOB into Xero while translating the codes so that they show up correctly. Far easier! Having your accountant sit there with a code list for MYOB and Xero doing a manual comparison and entering the codes would be far too hard, time-consuming, and expensive.

Given that Gillian was so proficient at moving data backwards and forwards between the different accounting packages it seemed silly to attempt it myself and then get Gillian to perform cleanup afterwards, so I asked Gillian to handle the migration herself, and she was happy to help.

So then what happened?

Even though I thought everything was in place for the handover, it took longer than expected to have the files ready to deliver to her. All this time Gillian was on standby to complete the migration, having allocated that time to me and this project. I know what it's like to be in that situation, and it really annoys me when this happens to us at Chilli Chocolate Marketing, so I was very conscious of what I was doing to her. However, I eventually obtained a copy of my MYOB data and handed it over to Gillian so she could commence extracting the information I needed, and we began working through it all together via Skype calls and emails.

...and that's when the fun really started :)

All of a sudden, with actual visibility of the company info, I started seeing things that raised questions I couldn't answer. Why was petty cash categorised as a Directors Loan rather than as an expense? Why had CCM paid that supplier's bill when it was on an invoice intended for our client? Why had this invoice not been paid? And why on earth had this invoice I’d never seen been paid? Things had obviously been falling through the cracks.

I'll skip the messy details of how these issues were resolved. Suffice it to say that it has been a hard slog getting the data to a state where it represents an accurate and easily-understandable picture of the business. But it has been 100% worth it. The beauty of Xero - now that the information is in there! - is that every aspect of the accounts is only a click away. Xero has all the systems I have always wanted in one place and it is totally transparent.

When I open Xero in the morning I can see how much cash I have on hand, because Xero has pulled that information straight from the bank - I don't have to log in to the bank's system at all, it's right there in Xero. Xero talks to Freshbooks and I can see when an invoice has been paid, and reconcile it against the bank account at the click of a button; Xero talks to Webpayroll, the payroll system, and all company pay information is all right there; and Xero talks to CapsuleCRM, our customer database management system, and stays synced with all our customer contact and interaction records. So when I am talking to a client I can check their communication history and at the same time see where their accounts stand.

It's like putting a puzzle together. This bit talks to that bit which links to this bit which plugs in to that bit. Having everything talk to everything else is less time-consuming leaving me more time to work on the business.

This whole experience has crystallised for me that no-one cares more about the state of my books than me and no-one has more invested in my company than me. Having visibility of all this information has given me -- for the first time -- real control. Thanks to Gillian and Xero I’m doing my own books, and you know what? In some crazy demented way I enjoy it!

If any of you out there wish to know more, feel free to drop me a line at kelly@chillichocolatemarketing.com.

- Kelly Wright Twitter: @ccmkelly

Links:

Xero, www.xero.com.au Jill of All Trades, www.jillofalltrades.com.au LinkedIn, au.linkedin.com Freshbooks, www.freshbooks.com Webpayroll, www.webpayroll.com.au CapsuleCRM, www.capsulecrm.com MYOB, www.myob.com.au