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New features and old favourites: my tips for advisors this EOFY

This is a guest blog written by Kylie Parker, Xero partner and Director at Lotus Accountants

I’ve been an accountant through the global financial crisis and the implementation of GST. Put those two things together and multiply them by ten, and that’s what it’s been like these past three months. The level of change and uncertainty has been extraordinary. But I also believe that the end of this financial year brings with it an opportunity to take a fresh look at our practice and the tools we use. Here are some of my tips for making the most of your time and getting the most out of Xero this EOFY.

Run reports to understand your practice

One of the first things I did when COVID-19 hit was to go into Xero and run a report of our year-to-date invoices for the year. It is often said that 20% of your clients give you 80% of your income and mine was spot on. I also ran a report of our timesheets to see how much time we were spending on each client. It was a quick and easy way to understand which clients were instrumental to the survival of our business. Monthly fixed fees can easily lead to ‘scope creep’ during unforeseen events, so it was also important to make sure this additional work was factored into our business.

Once I did that, I realised there were some clients that we needed to let go. It wasn’t an easy decision, but it’s been such a stressful time that I knew if I didn’t refocus my efforts on our core areas of expertise and cut back on our workload, I was going to risk losing everything. Accountants and bookkeepers are always the last to help themselves. But right now, we all have to be really mindful of our own mental health and take care of ourselves, especially if we’re a sole practice owner with young children.

If we think of clients like people who are drowning and government assistance like the life vests thrown out to them, accountants and bookkeepers are the rescuers out on the boats. But we can’t save everyone. If we try, we may end up out in the water too, struggling to survive. So even though you may want to help everyone, it’s important to look at what your financial reports are telling you and make decisions that will support your business and your team’s mental health, as hard as those decisions may be.

Use Xero Practice Manager quotes for engagement letters

With the stress of JobKeeper and the change in financial situation for many people, it’s likely that a lot of individuals and small businesses will be looking for a new advisor in the new financial year. My advice would be to make sure you protect yourself and your business by doing due diligence on these new clients. One of the best ways to do this is with a high-quality engagement letter, after reviewing their Xero file. You wouldn’t buy a car without looking under the bonnet, so don’t provide a fee estimate before understanding the work involved.

I use quotes in Xero Practice Manager (XPM) for engagement letters. I’ve been doing it for years, but with the release of document packs in Australia, I can now upload the PDF into the client’s document pack and add a signature spot to get it e-signed. It’s a great way to keep everything documented and in the one place, without the need for any physical paperwork. Once the quote is signed, you can turn it into an invoice in Xero and enable automatic payments from providers like GoCardless and Stripe. You can also set up a monthly recurring invoice template.

Build query templates in Xero HQ Ask

Xero HQ Ask is my preferred way to get information from clients, because it’s through a secure portal. I use it to receive information like tax file numbers and financial data that shouldn’t be going through email. The JobKeeper template was a fantastic time saver, but I have a whole range of templates that I’ve built over the years. I use them for new clients, but also to collect information on trusts, individuals, companies and more.

I even used it recently to send questions to people I was interviewing for a bookkeeper role in my practice. They’ve also been a good way to get a pulse check on how my clients are managing and whether there’s anything I can do to help. When COVID-19 first hit, I sent out a template to see which clients were struggling (the team then created the monthly revenue export, which offers some great insights). Xero HQ Ask is one of those tools that I don’t think advisors use enough.

Create your own customised reports

Report builder in XPM is another old favourite of mine. I have a combination of standard reports and ones that I’ve created myself. Once you’ve created the customised report, it’s easy to tailor them to each individual or business, before publishing and exporting to a PDF. They’re great for things like year-end tax planning, dividend statements and even tracking the new carry forward provision for concessional contributions to super.

Once the reports are published, the client can see it in their file. If they’re standard reports like a Business Activity Statement, then I’ll leave them in the published area. But if they’re a report that I’ve created under my own intellectual property, then once I’ve sent the PDF to the client, I’ll revert the published report back to a draft and delete it from the client’s area. It’s a handy tip to make sure all your hard work remains the property of your business.

Email bills directly to Xero

The Email to bills feature is a personal favourite. It’s particularly useful if your clients only have a handful of receipts each month. All you need to do is go to ‘pay’ under bill and ‘create bill from email’ (save this address as a contact). When you email the bill to that address, a draft bill is created in Xero with the information automatically populated. You can then add any missing details and approve, or set up a recurring bill if it’s a cost you expect to have on a regular basis.

It’s not only a huge time saver, but means you can keep copies of the bill with the transaction. You can also use the email address to send any PDF document to that Xero file. That way when you click on a transaction in a client’s file, you can see the invoice and any supporting documentation. For example, you could add the rental agreement in the recurring invoice for rent, or store the contract for a regular supplier with their bills. For clients that need a more comprehensive solution, Hubdoc is the way to go.

Lean on your community

What has helped me above everything else during this time is my community of accountants and bookkeepers. The level of support across the board has been amazing. I can’t even begin to think how I’d have done it without them. I’m in a few different groups, including the Xero partners group and a private chat with just seven people. We share advice, collaborate and ask lots of questions. Sometimes we’ll just sit down at 4pm with a coffee (or wine) and chat about our families.

It’s a difficult time for advisors, but by making the most of the time-saving features in Xero and leaning on our community, we’ll all get to the end of this financial year and start the next one with a renewed focus to support our clients through COVID-19 and beyond.

Kylie Parker has over 25 years’ experience as a chartered accountant and is the founder of Lotus Accountants. She is the author of ‘Planning Plan B’ and is a co-founder of AccounTEK Global, which drives digital adoption across the accounting industry and supports women presenters.

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