Our Favorite Accounting Tool: Xero

Why Accounting for Jewelers prefers Xero over any version of QuickBooks…

For the first 17 years I did bookkeeping, I never loved the actual programs.

I enjoyed the purpose of organization and reporting outcomes, but the process was a chore.

Xero Accounting Software changed my world. It was the missing key that made everything understandable for me. This was the turning point in 2013 that allowed me to feel comfortable helping jewelers understand their numbers and help them be successful with less stress.

As an update, in 2017, we again attempted to work with QuickBooks Online, because it is the household name and what people are used to. We tried hard to love it, but we just don’t. For the 2nd time in Accounting for Jewelers’ 5 year history, we have decided not to work with QuickBooks Online. We love Xero!

We at Accounting for Jewelers exist because we understand how to organize a jewelry business for the purpose of efficient procedures and complying with tax law. Even more, we know how to explain the data we organize into meaningful information for you.

This is the problem with many bookkeepers and accountants, they never sit down with you to actually explain the story the numbers tell.

Here’s a Pinteresting idea… Click on this photo for more accounting tips + resources

Just like with jewelry making, the theory of accounting does not compare to the practice.

No one was willing to sit down and explain the roles the numbers I was entering played in the big picture. Reporting was always for the purpose of filing taxes or to see Profit & Loss, but never examining their true cause and effects in order to make informed business decisions.

My friend, Paul Barrett at Southern Cloud Accounting recommended Xero while I was self-educating myself in small business accounting after an accounting degree and 3 years in corporate accounting still had me wanting to understand more.

Xero was my game changer. It is an intuitive design partnered with a true double-entry accounting program.

Xero has approached accounting with the following thought process:

With all the available technology, what is the easiest way to get from Point A to Point B and maintain proper accounting methods?

I want to get the job done in the most efficient manner and with Xero, it’s actually fun! Yes, you heard me correctly.

Xero is FUNctional!

Xero is cloud-based and is the global leader in online accounting (2 years ahead of Quickbooks in the Online sector).

There are many other programs available, but they were built for a specific purpose.

Freshbooks has begun to offer bookkeeping, but they were made for invoicing; they will never reach Xero’s capabilities.
GoDaddy (previously Outright) was built for Etsy. It works great for Etsy sales, but nothing else and is not a true accounting program. It’s like Mint for businesses. There’s no double entry on the back end, so you can’t get a Balance Sheet.
Wave is great, especially because it’s free, but you get what you pay for. It is very cumbersome with extra steps for simple tasks and has many limitations. It’s like Mint on steroids and what I recommend for tracking personal income and expenses, but not anything more than a small or starter business that is not looking to grow (it’s easier to start with the program you want to stick with, than make the change later).
AccountEdge is too complicated. Those that like accounting programs where you can enter the girdle size of a diamond and if it’s faceted or bruted are better off with a program like AccountEdge. In our opinion, you need to confirm that the stone you have matches the cert upon receipt, and then you can enter the cert# with the bill, but we aren’t into wasting our time entering data into an accounting program that is better served on the sales floor in the Inventory POS program, like Lightspeed for quick searching the availability of a stone.
QuickBooks is chasing what Xero has done. They were the innovator for small business accounting, and still are with huge resources will continue to improve, but QB Desktop and QB Online is still cumbersome and leads to errors. Everything takes a few more steps and isn’t transparent the way it is in Xero. It’s difficult to follow QB procedures.
Xero is the disruptor and remains the innovator.

With Xero, we are able to do more than enter your numbers, we are actually able to have conversations surrounding your numbers in real time.

Xero’s Winning Features:

Unlike other programs, Xero is centered on automatic bank feeds for your business. (QuickBooks online continues to redesign in this direction). This way, we automatically catch the majority of inflows and outflows right at the source.
We are able to do bookkeeping in real time, so you are able to see where you are daily, weekly, and monthly, instead of scrambling each quarter, or worse, with a box of receipts at year end and trying to recreate your year in one weekend. This better overview of your finances,
1. Improves collaboration with your team
2. Higher Efficiency + Productivity means that instead of spending time on data entry, we can focus on strategy, growth, and refining cash flow instead of chasing down and paying late, not knowing clearly who owes you and who you owe.
3. Don’t have to move data place to place: Accountants now access and see exactly what you see. Everyone has their own login for audit purposes. It isn’t one person that has the access and key people don’t readily use or view it. You can set permissions to control the extent of access for each user.
4. There’s no saving a file, sending it only to find out it’s corrupt and can’t be opened.
5. You don’t have to remember to back it up to the cloud (and risk storing it where there aren’t the same security features as Xero)
Customer Support: your first point of contact is your Certified Advisor – and then Xero’s support. Some complain that they don’t have a direct phone number, but they will call you if needed. I admire the way they have setup their support more than QB. I’ve sat on the phone for hours in the past to resolve an issue with someone that knew less than me. Whereas Xero routes tickets to the expert in the topic, so the person that helps you you actually reach a solution faster.
Ease to work together – if someone phones or emails me, we can hop on a screenshare and resolve it instantly.
You can truly be paperless! Check out our post on how to use Xero’s Inbox and Attachments for your new Paperless Filing System.

There are hurdles to Xero. Here are concerns we hear and our reasons to overcome them:

Monthly Fee? Yes, but it’s less than a meal out once-a-month and far more rewarding. The pain and trouble relieved far exceeds the monthly fee. Also, we pass on the best coupon codes available to you!
Security? Do you use online banking? It meets or exceeds the same standards for your bank with encryption and security. We also like the geo location features, which ensures your data is never lost.
Does it go offline and I can’t get on? Very rarely. We use Xero every day, and when/if there are planned outages, they are scheduled during the lowest used time. Extremely rarely, there are unplanned outages, which occur from weather (when your electricity goes out), or the Amazon Server, which last happened in Feb 2017. One could argue that it happens hundreds of times less than when you aren’t able to get to the desktop computer that houses a non-cloud based program.
Does it track Inventory? It does track Finished Goods, if you are buying and selling the same thing and not making any changes. It does not track manufacturing or bill of materials from Raw Materials through Works in Process to Finished Goods. However, if you have a starting physical Inventory, then we can easily make monthly, quarterly or annual adjustments based on the new purchases and sales. We love to educate on Periodic and Perpetual inventories! If you prefer something other than our spreadsheet, you will have to use something like TradeGecko, Dear Inventory, Bejeweled Software (JDM) or our Inventory App, Benchworks. Click here to read about what is included in Inventory and click here to read our tips to track inventory.
Do I need other integrations? No, Xero is all inclusive. You really don’t need anything else except a way to accept money like Stripe, PayPal, Square, or Mercury Payments. (Plus, Stripe now accepts ACH, so your customers can pay your Xero invoice with their bank account and you will only be charged 1.5{f4f1c227a9297829d6c2f0b223ad0188fddc4ac1a871d87b426e6cec743bfd5b} instead of the 2.9{f4f1c227a9297829d6c2f0b223ad0188fddc4ac1a871d87b426e6cec743bfd5b} for Credit Cards!)
Can I attach receipts? Yes, you get your own private inbox to upload directly to or email in attachments on the fly, so you don’t have to go back and remember what you missed. Do it as it happens! Then, the receipts are waiting to remind you to enter them. They can be attached to individual transactions as well as Contacts for your own virtual filing system.