Xero managing director for New Zealand & Pacific Islands, Craig Hudson, says New Zealanders need to continue to support small businesses. She believed a lot of businesses were tightening their belts. Her husband owned quite a big business and this year there had been no Christmas party. Xero is tracking the progress of hundreds of small businesses with less than 20 employees as they fight to recover from Covid-19 lockdowns and no international tourists. Xero’s Small Business Insights for January 2021 shows revenues for small business were 6 per cent lower than in January 2020. Seems like a simple request to be able to reconcile our income statement to a list of customers. Hi Steve, once you’ve run this report you can click into the specific customer that you’d like to view.
Book a paid live remote Xero support session with me or use our self-paced Xero training. This will have the effect of creating a repeating journal to amortize the balance. A spreadsheet is not necessary to manage it, but may be needed at the end of the year to balance the Income in Advance Account. The monthly repeating bills will not show of the client’s statement and will automatically be marked as paid because they are of zero value.
I have read previous feature requests that refer to a paid app that can handle this but this seems to me like a pretty important feature and one that lots of businesses would make use of. We are SAAS and most of our customers pay us for 12 months of service at the start. Issue an invoice for the annual fee and match the receipt against it. Now either use Manual Journals to transfer the 11/12ths out to a Prepaid Income account, and each month move 1/12 back. As you can’t set up repeating journals you could setup a repeating Sales Invoice to achieve the same thing (or an AP Bill – as the debits are positive and credits are negative here so it is more intuitive). Keep issuing your invoices monthly and allocate them against the prepayment until it is all used up. This way you can still send the customer an invoice each month .
So You’ll Know That Reconciling Your Sales Is
This should be reasonably easy to do by just entering one sales invoice with a range of dates over which the income needs to hit the P&L. What I require is in month 1, 1/12 of the income hits the P&L and 11/12 goes to deferred income on the balance sheet. So sales invoice is raised, posted to debtors and then the customer pays. We have first hand experience using a manual spreadsheet based process for revenue recognition. As it has been for folks on this thread, and to say the least, that process was tedious and time consuming.
So although they don’t change the way Xero works, they are important because many people and/or CPAs like certain transactions categorized in certain accounts, although they are inherently the same thing, money in or money out. I’ll be happy to connect and chat more about this and how Flowrev can help you automate your deferred revenue processes, and generate bookings forecasts etc. to create “truer” financials.
The suggestion of Thomas would solve the problem for us (although I think ‘posting date’ might suggest it’s the date the transaction was entered, so maybe another name required?). If you haven’t already seen – we’ve recently extended pilots for two new features our team are developing to provide insights to your business cash flows and performance over a period. Both Short-term cash flows and Business snapshot are visual tools to help get visibility over upcoming invoices and bills so you can make the right choices for your business. Its features include automatic bank feeds, invoicing, accounts payable, expense claims, fixed asset depreciation, purchase orders, bank reconciliations, and standard business and management reporting. Xero claims to have more than 200 secure connections with banks and financial service partners around the world. Other features include an API to integrate with external applications and Xero claims to have been integrated with over 800 third party apps, and more than 200 connections to financial service providers around the world.
So, for example, we should be able to see from day to day what cash reserve/float is required to cover deferred payments. Every invoice would be entered, then you would enter a repeating journal to spread the income (repeat – monthly, end date the end of the 12 months). Then each month 1/12 of the income is released to the P&L, until in month 12 all the invoiced income is in the P&L in the correct months. Peter’s suggestion of putting through the invoices via deferred revenue, seems to work to some degree but creates heaps lot of extra work & tons of invoices that defects the efficiency of the system. We are in the business of ICT consulting & our clients are invoiced in stages as the job progresses. As such, we faced a similar issue when it comes to billing & revenue recognition.
Simplify Everyday Business Tasks
But January 2021 is the first month to buck that trend. Agree with recent posts that the existing reports still do not address this simple request, one which was first raised years ago. Income by Contact doesn’t seem to provide any meaningful numbers to someone running a business. Through the upcoming Contact Transaction – Receivable report, you’ll be able to view all receivable transactions for a specific contact. You’ll also have the option to filter, and sort by a number of different factors. Through the Contact Transaction – Receivable report, you’re able to view all receivable transactions for a specific contact.
If you have 20 transactions a day then you may need a different approach. I don’t know of any API partners that provide this either . If you want a custom tool to do this then it is definitely possible. You really are asking accounting questions now and should seek professional advice.
- Being able to easily track when income was actually being earned would also be very useful to us, to plot our annual cycles around staff holidays etc. and look at our profitability.
- We are a SAAS business and receive subscription revenue based on annual subscriptions.
- We deliver courses and customers pay in advance but we can’t recognize that revenue until the course has been delivered.
- I want to be able to enter an invoice into Xero that covers a period of time.
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Financial statements are written records that convey the business activities and the financial performance of a company. Financial statements include the balance sheet, income statement, and cash flow statement. Top line refers to the gross figures reported by a company, such as sales or revenues.
Understanding How Sales And Revenue Can Differ
Xero was founded in Wellington during 2006 by Rod Drury and Hamish Edwards. Xero Limited’s headquarters are still located in Wellington.
Many people invoice quarterly or annually for services or licences, so I would have thought this was a very common problem. I have been in touch your with your support people and they say this is not possible without entering lots of manual journals each month. We sell subscription software and this would be extremely beneficial for us. We are just moving a large client to Xero and wanted to get away from complicated excel spreadsheets because of their different income streams and also the possibility of human error. Another client uses recurring journals, but this is too much duplication of work, when there is a high volume of transactions, as in both these cases. Future revenues is kind of the base standard for most B2B SaaS companies. Being able to easily track when income was actually being earned would also be very useful to us, to plot our annual cycles around staff holidays etc. and look at our profitability.
Deferred Revenue Accounting
As we head into FY20, and beyond, we’re making great progress towards our strategic priority of driving cloud accounting adoption worldwide. We have a genuine commitment to prioritising investment in growth and partnering closely with accountants and bookkeepers to deliver a human-centered experience for our customers.
Recognition timing has nothing to do cashflows, and is not “multiple due dates”, whatever that is supposed to mean. It seems like it can quickly end up taking a huge amount of time to do, and I haven’t realised that Xero didn’t have this out of the box. Reporting have been dug in, working on improving the stability and maintenance of the reporting platform. This is going to be keeping them busy well into the end of year, and into 2020. You’d still date the invoice today, but instead of the amount showing up in the P&L for that date, you can pick a future date for it to appear in the P&L. We will run with the repeating journals for the moment but it would be ideal if you could allocate the range of dates the invoice is applicable to when creating the invoice. This would be useful for membership organisation etc., whereby you could add an invoice and put a start and end date.
The invoice comes in for eg business rates billed at the beginning of the year for the following 12 months – although the invoice comes at the beginning of the year payments are paid monthly. Like any business that has to wait for payment after delivery, we need to know future cash inflows and account for these as they occur.
We are a SAAS business and receive subscription revenue based on annual subscriptions. As we have so many subscriptions we have decided that it is best at the year end to calculate what revenue should be deferred into the next year.