As a small business owner, Xero is your financial hub. The cloud-based accounting software offers control and clarity over your numbers, helping you manage your cash flow, identify opportunities and forecast what’s on the horizon.

Xero is a brilliantly intuitive tool but, like with all technology, errors occasionally slip through the net. Manually verifying the accuracy of your financial data in Xero is essential to the success of your business.

 

All transactions from your bank statement may not appear in Xero.

 

Xero connects to most bank accounts, automatically feeding in your transactions on a daily basis. It’s natural to assume they will all be reflected in Xero, but it’s not always the case.

The vast majority of the time, transactions do feed in without any problem, but every now and then they can be duplicated or missed out. This usually occurs when you renew your bank connection with Xero.

Regardless of how these mistakes occur, we recommend always keeping in mind that technology can’t be trusted 100%!

 

At least once a month, check that your bank balance matches what’s in Xero.

 

No matter how advanced technology becomes, nothing will compare to the human eye. Accounting software will always need some degree of intervention to verify the data is correct and doing what it’s supposed to.

Set aside time each month to compare your bank statement against what’s showing in Xero, looking out for missing transactions or duplicates.

Remember: so much in Xero is geared around your bank account, so any inaccuracies will have broader effects. If your bank balance and Xero balance don’t match, it means your accounts are wrong and your VAT could be incorrect.

 

Decisions based on inaccurate accounts could be ill-informed.

 

Depending on their significance, any missed-out or duplicated transactions could have a huge impact on your cash flow and the decisions based upon it.

If Xero doesn’t include two transactions amounting to £4, there’s unlikely to be much of a knock-on effect on cash flow. On the other hand, if a transaction of £25,000 doesn’t appear in Xero, your accounts may show you have more cash than is realistically available to you.

One missed transaction could be the difference between bringing on an extra team member or not, so it’s imperative to ensure your Xero always shows an accurate, up-to-date picture of your financial data.

 

Start using your data to its full potential.

 

When used correctly, Xero provides a wealth of valuable information you can use to your advantage. It’s our job at Tyrrell Accountants to help you harness that power. Get in touch with us to get started.