Xero is a popular small business cloud accounting solution. This idea is further reinforced by the 200 employee limit as well as other lesser known “soft” limits on invoices, expenses and transactions. You may wonder whether or not is is a viable option for when your small business grows. With some creativity, you can avoid moving to a more expensive, enterprise resource planning system.
Accounting systems like Xero are not affected as much by the amounts recorded in transactions compared to the sheer number of them. Small businesses tend to make a plethora of small, low value transactions which can quickly add up to hundreds or even thousands of entries on Xero. The issue for Xero is that the more entries you use, the more it costs them in terms of processing power.
As a result, many small business accounting systems place limits on the number of transactions that can be used in a given period (e.g a month).
However, Xero does not actually have any hard limits on the amount of sales or purchase invoices that you process nor does it have any limits on the number of bank transactions that you record. Note that there are limitations to Xero though, and if you push through too many records, it will slow down and will eventually resemble the drawer on the left, where completing even the smallest changes will take significant periods of time. In the worst cases, the software simply stops working and freezes.
Now, do you need to plan your migration out of Xero then? Do you need to avoid it completely? Well, despite what was just said, the answer is probably no. With some clever thinking, some rearranging might be all you need to stick with the popular cloud accounting option.
The following 4 tips represent some solutions for common issues that businesses experience as they grow with Xero. They might not apply to you, though, so you may need to consider hiring a consultancy to assist you.
Usually, if you’re taking advantage of a POS system or inventory management software, your vendor will likely support transaction batching. Ask your vendor, you never know if they might have it.
For example, if you run a small business that processes large invoices that contain many invoice items, you may encounter the limits of Xero. It will likely slow down to the point of timing out!
Issues can become so severe that you may even struggle to generate financial statements from Xero.
Fortunately, transaction batching can be used to limit this. Instead of processing the individual invoice items, we can take the final invoice amount and use that. This can cut the number of “invoices” listed on Xero from tens of thousands to mere hundreds.
Many businesses run a variety of different systems to manage inventory, their online stores, etc.
As sales begin to pick up, naturally Xero begins to get bogged down by the number of transactions you make. Just like the previous tip — you guessed it — you’ll eventually reach the point where Xero will fail to generate business activity statements and other important documents.
Certainly, to keep efficiency, you wouldn’t consolidate transactions by hand as that wouldn’t be beneficial to your business. In this case, it may be worth speaking with a developer to create a bespoke integration so that your business can keep using Xero efficiently.
Once you begin consolidating transactions, not only can you keep everything automated, the system will likely speed up significantly if the reason for the slowdown was due to a excessive number of records.
When businesses first use Xero, many times they choose to use it as a billing solution as well. However, this can cause problems as more and more transactions are processed.
Instead of bogging down Xero with billing, you might consider using a billing engine such as Chargify or Chargebee. Taking the heavy lifting of billing from Xero can significantly increase the speed that it works at.
In fact, you’ll get benefits such as prorated billing, automatic cancellation handling and service provisioning with Chargify that Xero doesn’t normally provide. This means that Xero can do what it does best — bank reconciliations, the plethora of accounting statements, etc.
Not only does it provide plenty of additional benefits, many billing engines tend to have integrations with Xero. Many of these billing engines submit hordes of transactions though, so you may need to consider the first and second tips while using a billing engine with Xero.
The default integration between your trading and accounting system may suffice for now, but may need to be replaced later on.
Most popular systems come with well documented APIs (interfaces usable to connect software that perform tasks automatically). As a result, it is generally possible to create a system that pulls data from your trading system automatically, puts it all into a single batch and posts it to your accounting system.
This would require you to turn off the default integration to some degree (in some cases, completely.)
There’s a huge benefit to having a customized integration. It can be modified to suit your business’s continued growth and leaves you much more control over your systems, which allows for better software solutions that work for your business.
If you can’t build your own integration for Xero, or you’ve followed all the tips and Xero is still slow, it may be time to hire a developer that can create a bespoke solution for you. It’ll save you time and resources to have professionals examine your system and assist you with its issues.
First and foremost, Christmas is not here yet. We have two more months before we have to sit down with our most annoying relatives. Phew.
But, if you’re in retail, you’ll know how important the next two months are. The next two months pay for the rest of the year. If they go well, you’ll be in great stead for 2018. If they go badly, you might get your P45 in your Christmas card.
If you have physical stores, you might be advertising temporary vacancies to help cope with the rush. Good thinking, Batman.
Your online store might not have the capacity it needs.
There are four factors that influence the capacity of your online store:
If you use Google Analytics, (1) and (2) are really easy to find so you should definitely do this now.
Log in and select your store and go to Audience > Overview.
Drop down under Overview. You’ll probably see Sessions selected. Choose Pageviews.
On the right hand side, choose Hourly.
Then, hover over the graph and you’ll see the number of pageviews per hour.
Select your busiest period. This might be your Black Friday or Christmas sale from last year. Find the busiest hour or the busiest day.
To make the maths easy, let’s say there were 36,000 pageviews in that hour. There are 3600 second in an hour, so divide that number by 3600 to get your pageviews per second. In our example, we arrived at 100.
We then need to adjust this number for your projections this year. If you’re spending more on advertising this year, you might want to add 20%. If you’re spending less, you might want to subtract 20%. It’s better to overshoot than to undershoot, though, and it’s worth adding a buffer in case your estimate is a bit out.
The number you arrived at is the number of pageviews per second that your store and hosting need to be able to accommodate so your Christmas card contains an awful joke and not a P45 (I’m not selling this well, am I?)
Armed with your pageviews per second, your developer and hosting company (or Coherent… just sayin’) will be able to run tests to determine if you’re already in good stead or if you need to make changes so your online store doesn’t fall flat when you most need it up and running.
The photocopier is broken again. Ugh. At least their phone number’s on my recent calls list from yesterday…
.. Ring ring .. For sales, press 1 ..
.. This is really adding insult to injury ..
.. For accounts, press 2 ..
.. I need to remember the menu options for next time ..
.. For support, press 3 ..
.. At last! ..
.. We record all our calls ..
.. That’s great. So do we. …
.. All of our agents are busy .. doo doo .. doo be doo .. Your time is valuable to us ..
Sound familiar? Of course it does. But that doesn’t mean there isn’t a better way.
Self-service portals and apps are huge win-win opportunities for you and your clients. Your customers can get the information they need when they need it (even if they’re photocopying their face at 4am after a classic work night out). You don’t have to employ people, to help to one person at a time, who probably knows what they need and doesn’t want to have to phone in.
That person might even click a button that the customer could have clicked themselves. Efficient, huh?
This sort of workflow belongs in the ’90s. You just have to let go!
That photocopier problem could have been solved with an online troubleshooter. It could also have been solved with an in-app chat that would allow one staff member to help several customers at once (some companies take this to the extreme which is why they seem to have just woken up). In-app chat would also let the customer take photos of the problem. How much quicker would that be?
Whatever systems you have in place now might be great for what they do but if customers can’t help themselves then there is a tremendous opportunity to improve your customer experience and lower costs at the same time. It’s what we do as software developers. We create software that could become part of your website, or could be a mobile app, to plug into whatever systems you have now and deliver extra functionality.
Even if your current systems are decades old black boxes, even if you’ve never worked with software developers before, we know our stuff and we can make it easy for you to deliver the service your customers expect. Call us!
As your online presence grows, you may start to consider the pros and cons of buying/renting hardware and using cloud services for your hosting. All of these options have pros and cons and this article will provide our view on the realities of this decision. We offer cloud servers and dedicated servers – find out more about hosting with us.
If you buy hardware, you can get exactly what you want. Choose the chassis, choose the motherboard and then start adding more components. If you need a storage server, buy a large chassis and add lots of disks. If you need a compute-intensive server, buy a small chassis and put a 4 socket motherboard in it. The choices are endless.
This is an excellent choice for those whose infrastructure spans a large number of servers. Why? Because buying 100 servers has economies of scale over buying 1 (and buying 1000 has economies of scale over buying 100). Intel openly publish the “tray price” of their CPUs (i.e. the cost to buy them in bulk) and you probably won’t find those prices at any retailers. It’s the same for other components too.
It’s not just the immediate economies of scale though. There are also economies of scale co=locating your servers. A rack is cheaper than 46 co=location packages and also gives you physical access (so you don’t have to pay for remote hands). You can co=locate tools and spares, for which many co=location providers charge extra. You can connect your servers over a private network and reduce your bandwidth cost, especially if you co=locate a backup server and do backups over the private network.
Renting hardware can offer almost the same level of control as buying hardware. Sure, you don’t get physical access, but many large dedicated server providers now have very advanced control panels where you can add extras, take remote control of your server, reprovision your server and so on so there isn’t always a need for physical access.
Not owing the hardware might seem like a bad financial decision (if you draw a parallel to renting a home) but in reality it often isn’t. Consider the following hypothetical yet realistic example where the server provider can take advantage of their economies of scale. Of course these economies of scale don’t apply if you need an usual server configuration.
Owning: £5000 upfront (needs upgrading after 3 years), £50/month to co-locate, 5 remote hands requests at £75 each and 3 disk failures at £100 each. Total: £7475.
Renting: £200 per month all inclusive. Total: £7200.
It’s also a lot more reassuring than worrying about who will be around to do a drive replacement in a faraway city in the middle of the night.
There are several myths about cloud, its performance, its reliability and its scalability. Put simply, cloud is great for small deployments but as you start to approach the need for a dedicated server, you won’t be able to do the same with the cloud at a similar cost. There is a very simple reason for this:
To provide a large cloud server with a certain specification, a quality provider will usually allocate resources on a physical server with slightly more than your virtual server specifications (so you’re paying for more than you can use). This is because the software that creates the virtual server uses resources too. That software is often the cause of a lot of problems, too. Virtualisation software can be highly complex, needing experienced systems administrators 24×7 to deal with mishaps, further adding to the cost. There are software solutions out there to take away some of the complexity but most of these are also very complex themselves and require a lot of investment and room for price variation due to vendor tie-in. It is for this reason that I would advise anyone in the market for an important cloud service not to rely on a company whose whole virtual infrastructure is dependent on their business relationship with a particular vendor. We have known a particular vendor to increase the price of their software tenfold where affected clients were told via a mailing list.
Again, cloud is great for small setups but with the added complexity, you won’t get the performance/cost ratio of a dedicated server.
Claims are often made about the cloud’s scalability and reliability. Scalability may be useful where you need to grow significantly very quickly, then back again, often. This is a rare occurrence and most often, if you compare the cost of a dedicated server to match your largest demand with a cloud server that offers the scalability you need, you’ll find the former is more cost effective. Discussions with one hosting company revealed that one client’s obsession with scalability pays for their whole cloud infrastructure.
Reliability is a hot topic too. Many cloud technologies claim to have automatic failover resulting in essentially zero downtime. CloudHarmony has impartial, accurate uptime statistics for all of the major clouds and all of the major clouds have more downtime than a many dedicated servers. This again, is due to the complexity. More software, means more complexity, means points of failure. Interestingly, many of the cloud providers that people associate with reliability (because of their marketing and higher prices), have uptime similar to, or worse than, the cheaper providers.
Compare this with a dedicated server. We tend to recommend Kimsufi for a cheap place to store backups. Our 10 euro-per-month Kimsufi has been up for over a whole year without any downtime at all. If you need more reassurance than that, look at the same company’s enterprise servers, which are still reasonably priced and come with financially-backed SLAs, RAID and redundant power/network supplies.
Your accounting system is at the heart of your business. Whether you use Sage, Xero, Quickbooks or something else, there is a wealth of data about your suppliers, customers, financials and KPIs in it. One of the key advantages of Xero specifically, is that it’s cloud based. Being cloud based makes it easier to link it with other systems and to get data out of it in your preferred format.
However, as your accounting package, Xero or otherwise, can’t encapsulate everything you do, it’s common to have other systems with overlapping data. Maybe you use Office365 or Google Apps (Gsuite) for the address book but when a customer moves to new premises, you have to update both systems.
Advantage 1: Keeping Xero in sync
Bespoke software development opens the door to synchronising data in Xero with any other system. This includes Xero’s official integrations – but also proprietary systems, legacy systems and systems that don’t officially connect with Xero. Bespoke software can help you to keep using your other systems – or to use a system that doesn’t officially integrate with Xero – and keep them in sync.
Advantage 2: Reporting
The wealth of data in Xero, Sage and other accounting systems can be hard to extract in the format you want. Let’s say that your KPIs include:
Your accounting package holds the keys to this data – but you might have to download a spreadsheet from it, copy and paste in other data from other sources and do some manual analysis. Whilst there is something to be said for manual analysis, there is also a lot to be said for keeping up to date. Bespoke software can provide you with a single pane of glass for your important metrics, presented how you want them to be presented.
Advantage 3: If-this-then-that
Aspects of what you do will undoubtedly be complex. However, it’s likely that some of your processes could be encapsulated by a simple order of events. For example, “when the Xero invoice has been paid, send the equipment to the customer”. Keeping abreast of when each invoice has been paid and ensuring that the correct information is conveyed to shipping could be time consuming. However, this sort of repetitive work can often be simplified or automated entirely by software.