Inside Xero Accounts
Xero accounting is one of the major challengers in the online accounting market. While this missive is about Xero, it can be applied to any of the other accounts packages used by SMBs.
Peeking under the covers you find that Xero is built around a set of tables, like an individual spreadsheet.
- Chart of accounts
- Fixed assets
- Inventory items
- Invoices and bills
There is other stuff in there but this will do to get us started.
The one we get most benefit from exporting and analysing is Invoices and bills. If you have been in business for a while you will have enough data to start segmenting your customers and seeing what makes them tick. You can use the paid and outstanding invoice data to produce a forecast. This can be compared against the forecast you make from your sales system and by combining the two you have a good shot at a more accurate forecast.
Contacts is useful as well, but only if you actually capture enough data.
There are spare columns in either table that can be used to capture additional information. We use Tracking Name 1 & 2 to capture industry and other segmentation data. What you capture will depend on whether you are selling B2B or B2C.
The biggest hurdle we find when starting a new project for a client who has been in business for more than a few years is multiple entries with slightly different wording or spelling for the same client. Sometimes this is accidental, at others it is done so a sales person can get commission on a sale that would otherwise go to the account manager for the correctly spelled client.
Here is what we do with that data once it has been tidied up a bit. There are even ways of automating this so that it is showing current data every time it is opened.