February 2019 Newsletter
- Government to extend instant asset write-off
- The definitive answer on the rent v buy debate
- Popular loan structure for couples prompts warning
- Reviewing the SMSF document chain
Is Xero the one accounting software to rule them all!
Xero accounting software is a cloud based bookkeeping program that is easy to use and integrates with more than 500 third party apps which means whatever direction you want to take your business Xero should evolve to suit your needs. Xero is also easy to use and has most of the features you need built in.
So does that mean Xero is right for you?
If you are looking to change your small business accounting software you could be excused for thinking there is only one option and there are several reasons for that. But we would like to point out that there are several other options that are worthy of your consideration.
So firstly, why is Xero so popular? Well there are a number of reasons but a few key ones include:
- Xero has focused on strong advertising campaigns since their inception and their philosophy on increasing subscribers over profits means 13 years on Xero is yet to turn a profit as they spend heavily on marketing.
- Xero was the first accounting software company to really encourage accountants and bookkeepers to become advocates for the brand which they have done via a number of incentives. To be fair, most of the other brands now offer similar programs.
- Xero has developed a free Practice Management suite for accounting firms (this is the software a firm uses to run its business). What this means is that accounting firms have been further incentivised to move their entire client base to one client accounting software. Why? Because Xero Practice Management links directly into the clients Xero file reducing the time to complete the job and it means the accounting firm doesn’t need to purchase a paid Practice Management suite, which costs tens of thousands depending on the size of the firm.
- Xero has endeavoured to work with third party developers to ensure that anything even remotely related to your bookwork can be done via another application that shares data with your Xero file. In doing so the third party software providers also become strong Xero advocates.
- Xero has a strong social media presence which has helped fuel the hype around the brand.
So is Xero the only accounting software worth considering?
The short answer is no! There isn’t just one brand of car on the market, one type of milk in the supermarket or one University degree to choose from. And the reason for that is no one product could possibly suit all users and their different needs.
Is price important to you? Do you have just basic accounting needs? Do you need the ability to generate quotes and invoices? Do you have inventory to track? Do you employ staff and how many? Do you need to track time or departments/categories? How many people need access to your file and via what hardware? What third party apps would you like to integrate with? Do you have access to a reliable internet connection?
Depending on your needs and that of your business you might find any of the following selection more appropriate:
- QuickBooks Online
- MYOB AccountRight
- MYOB Essentials
- Cashflow Manager
- An industry specific accounting software application e.g. in the agricultural industry you might consider Phoenix, Cash Manager Rural, AgriMaster, Cash Book to name a few
If someone suggests you move to any accounting software and they make it sound like it’s the only option, perhaps take a moment to consider if they truly understand the nature of your business and is their recommendation for your benefit or theirs!
So before you rush into purchasing what might be the wrong accounting software for you, we encourage you to do your due diligence and consider what product best fulfils your needs. In many cases Xero will be the right solution but as you can see from the list above there are several other accounting software solutions that have relative strengths and weaknesses based on your requirements.
Watts Price Accountants offers free accounting software advice to help you determine the best option for suit you. We also use and support clients using all of the above mentioned products including Xero. To arrange a free consultation or brief chat simply contact our office on 03 5382 3001 or email us at firstname.lastname@example.org.
This month we wish a Happy Birthday to Brittany & Jenny.
Commonly Asked Question
How much do I need to comfortably retire?
This week we saw TV Personality and finance guru Suze Orman says you need $5 million to retire. Which begs the questions, what is a realistic retirement savings goal?
To answer that you probably need to see a Financial Planner but as a guide we have pulled the following information from an article by Trish Power from SuperGuide published on 11/10/2018.
If you’re a couple…
A couple can expect to enjoy a ‘comfortable’ life in retirement if they can generate an annual income of $60,604 by retiring with a superannuation lump sum of at least $575,000 (assuming investment returns in retirement of 5% a year) in conjunction with a PART Age Pension. Or a superannuation lump sum of at least $415,000 if retirement investments generate a return of 7% a year, AND the couple also receive a PART Age Pension.
If you’re a single person…
A single person can expect to enjoy a ‘comfortable’ life in retirement if they can generate an annual income of $42,953 by retiring with a superannuation lump sum of at least $505,000 (assuming investment returns in retirement of 5% a year) in conjunction with a PART Age Pension. Or a superannuation lump sum of at least $355,000 if retirement investments generate a return of 7% a year, AND the individual also receives a PART Age Pension.
All the best from the Watts Price Team!