From XU Magazine, 
Issue 16

Add-ons help you increase profitability and improve cash flow

Gone are the days of working nine-to-five where employees are paid a simple wage and clients are billed based on estimated time. The constant increase in running costs and inflation have made it clear that businesses need to shape up and get with the times if they’re going to survive the age of technology...
This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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It is true, most accounting software like Xero have some form of basic timesheet tracking and invoice tracking built-in, and for some this might be enough. However, for other small business owners they see the need for more robust solutions to integrate with their Xero account and here are three reasons why:

1) Time Tracking Apps Help Increase Profitability

It’s the little things that decrease profit, like employee time theft, an industry term used to describe when an employee is paid for time they did not work either intentionally or by mistake, and can include: time tracking errors, frequent breaks, exaggerated hours, and more. A survey by Software Advice reports that forty-three percent of employees exaggerate hours and the American Payroll Association estimates that the average employee steals four hours and five minutes each week!

Most companies experience some form of time theft and, in most cases, it comes down to poor time tracking and insufficient processes. Time theft is typically small but over a period of time, costs add up. Fortunately, using software to track timesheets improves accuracy, puts the accountability on the employee and reduces clerical errors.

Inaccurate time tracking is more common than business owners expect and is one of the main reasons for lost revenue. Employees or contractors may not be tracking their time down to the minute, or maybe they’re not estimating their hours properly.

By tracking time accurately and analysing past jobs, you’re able to ensure your estimates are spot on. You’ll also be able to review tracked hours throughout the project to ensure you’re on budget. If not, you’ll have the ability to renegotiate the project before it’s too late. No one likes an invoice they were not expecting!

Apps, like Time Tracker by eBillity, integrate with Xero to extend the functionality. The two-way data sync allows your accounts to work like one, sharing information to help your business track time and expenses more simply.

2) Invoice Tracking Apps Improves Business Cash Flow

After providing your customer with a service, you send them their invoice and carry on with your work. A week, two weeks, thirty days pass -- still no payment. With invoice tracking software, you can improve your cash flow by getting paid faster. It’s a known fact that the sooner you get an invoice out the door, the sooner you will get paid.

According to the Payment Practices Barometer Americas 2017, and annual regional report from Atradius, the average payment duration in 2017 was sixty-one days with over ninety-two percent of businesses reporting that they received late payments from their customers. For SMBs, this number can be even higher. A study of Xero users found that about sixty percent of invoices are paid late, and more than a third are at least two weeks late.

If you’ve been without the income of an invoice for over ninety days, you might consider employing a collections agency. While this may result in a partial or full payment, you’ll now have to pay a fee for their services. And even then, there’s no guarantee of payment.

Dealing with unpaid or overdue invoices may not be completely unavoidable, but you can improve your position with automation. Apps, like eBillity’s Invoice Tracker, sync with Xero accounting and invoices are automatically imported, so in just a few steps you’re able to create a sequence of email reminders using their customisable email templates. Set the dates you want your emails to be sent and activate the collection – it’s that simple!

By adding structure to your AR and automating the process you’re able to save time, maintain client relationships, and increase the likelihood of being paid faster.

3) Add-ons Provide Invaluable Insights

When you connect add-ons to your accounting software, you gain valuable and detailed insights to key functions within your business. This allows you to make informed decisions that help to increase profitability and improve running costs.

With time tracking apps, you’re able to discover where your time goes. The reports show you information like your most productive employee, and how much time your business has spent on each client. Further analysis will allow you to identify which clients are making – and costing – you the most money.

Whereas invoice tracking software tells you the state of your cash flow in real time. With their reporting you’re able to see what’s been paid, what’s outstanding, and what’s actively being collected. You can also easily check your reminders to see which clients have read your emails.

Why leave it there?

To learn more about eBillity

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