Bookkeeping for the purpose of reporting information to the tax office and Companies House has limited value. What does have value is using the data to figure out what is the best Business Model to pursue.
One way to do this is to look in more detail at the finances by reporting profitability at the job and project level. This is why I am really pleased that Xero has announced the release of Xero Projects.
Xero Projects is a simple way to record time and expenses on projects or jobs. From this data, you can create an invoice. You can also create a time budget and see if you are over or under.
It’s quick and easy to create a project; just the contact, project name, deadline, and estimate. Then you can create a deposit invoice and start top create tasks. You need to create tasks because that’s what you record time against.
You can add expenses directly to the project, from a purchase invoice or from a payment from the bank. And, when you are ready to raise a sales invoice you select and the time and expenses you want to charge the client. Just note that at the moment descriptions from the time recording don’t flow through to the invoice. If you want that you’ll need a bespoke solution like Harvest.
There are Project reports which give you an overview of an individual project and a summary of all projects.
I will be keeping an eye on this area of the software because it seems there will be further developments including templates, links to payroll, quotes, and quotes plus including features into the Xero App.
Image from Flickr by Matisses.