Xero isn't just for GST

Farmers - Xero isn't just for GST: Are you getting enough from your farm's accounting software?

If you're only using Xero for GST, you're probably leaving some value on the table.

For many farmers, accounting software can feel like something that sits quietly in the background until it's time to send information to the accountant. But used well, Xero can be much more than a place to keep your accounts.

It can help you keep on top of the day-to-day finances of your farm, give you a clearer view of what's happening financially and make it easier for you and your accountant to work together.

Your accounts don't have to be a rear-view mirror and one of the biggest advantages of cloud accounting is having access to financial information as you go.

Rather than waiting until the end of a GST period to find out what has happened, your transactions can be flowing through Xero throughout the year. Bank feeds can bring transactions into your accounts, while bank reconciliation helps make sure those transactions are correctly matched and recorded.

That means less time spent trying to piece together what happened months ago and a better picture of what's happening now. For a busy farm, that can be invaluable.

Take the work out of keeping track of bills

Farm businesses have plenty of bills to keep on top of - feed, fertiliser, animal health, repairs, contractors, fuel and everything else that keeps the farm moving.

Xero can help you record and manage bills electronically, making it easier to see what's owing and what has already been paid. It can also help reduce some of the manual administration that comes with keeping track of paperwork and entering transactions.

The goal isn't simply to have tidier accounts, it's to have better information available when you need it.

What are your numbers telling you?

This is where accounting software becomes more useful than simply preparing GST returns.

Your financial information can help you keep an eye on things such as:

• farm expenses and where money is being spent
• outstanding bills and cash commitments
• income coming into the business
• how actual spending compares with expectations
• cashflow throughout the season
• changes in costs over time

When your accounts are kept up to date, you and your accountant can have a much more informed conversation about what's happening in the business.

Instead of asking, “What happened last quarter?”, you can start asking, “What are the numbers telling us now, and what should we do about it?”

Your software should work together

Xero doesn't have to operate on its own and modern farm businesses often use several different systems to manage different parts of their operation. The real benefit comes when those systems can work together rather than creating more administration.

For example, farming-specific software such as Figured can work alongside Xero to help with farm budgeting, forecasting and financial planning.

That means your accounting information can become part of a bigger picture, connecting your actual, live{fact check please} financial results with your farm budget and forward planning.

And, your accountant can work with you in real time! Cloud accounting also changes the way you can work with your accountant.

Rather than waiting until the end of the year to sit down and go through everything, MBS Advisors can work with you throughout the season using the information already in your accounting system.

That can mean identifying questions earlier, having more meaningful conversations about your numbers and making decisions with current information rather than relying on last year's results.

Your accountant shouldn't only be telling you what happened. They should be helping you understand what's happening, and what you can do about it.

Importantly, the value isn't in the software itself, it's in what you do with the information it gives you.

At MBS Advisors, we're more than just the people who prepare your GST return. As a Xero Platinum Partner, we can help you make sure your accounting software is set up to work for your farm and help you use the information it provides to make better decisions throughout the season.

If you're not getting as much from Xero as you could be, talk to the MBS Advisors team.

We are more than just year-end accounts. Contact MBS Advisors here.

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