Boosting profitability with cloud accounting software
Whether you are a freelancer, a small business or an accountant working freelancers and small businesses – improving profitability should be a key part of your financial management.
To improve profitability, you need to be more efficient with time and keep a sharp eye on invoices, expenses and the return on investment.
Cloud-based accountancy software systems Xero and FreeAgent help businesses track all of these factors in their projects facilities.
These systems allow businesses to better monitor costs, make better operating decisions and ultimately, improve profitability.
FreeAgent and Xero are geared towards slightly different audiences and the project tools are built with slightly different purposes in mind. This blog post gives an overview of each system and an insight into how it can benefit you.
FreeAgent projects for freelancers and microbusinesses
FreeAgent’s project functionality is designed for freelancers and other microbusiness owners. It allows users to create a new project for every new client or job that they work on.
In each project, the freelancer can build a list of tasks, track billable and unbillable time against each task and pull in invoices and expenses to judge the profitability of a project.
The end result is the invoice amount minus any expenses for the project, minus any unbillable time to equal the ultimate profit for the project. This information is invaluable to freelancers who work on an hourly rate.
Freelancers can use the information to more accurately estimate taxes, to negotiate more confidently with clients and to make better decisions about what jobs they will take on in the future. Leaving jobs that are unprofitable and pursuing those that offer higher profitability.
The tasks functionality allows freelancers to remain focused on what needs doing. Different tasks can also be charged at different rates. This means, for example, that you can charge half your hourly rate for necessary admin.
The system is also compatible with task management app Basecamp. So if you are already set up there you can integrate them into FreeAgent seamlessly.
Xero projects for small businesses and their accountants
Xero Projects performs a similar function to FreeAgent’s projects functionality, but Xero Projects is geared more towards small businesses, particularly agencies and consultancies in digital, creative and IT industries.
The system is very new, and Xero has big plans to expand it for use by many different businesses, but for now the system focuses on the financial side of project management, integrating Xero features like contacts and invoicing as well as (soon to be available) bills and bank reconciliation.
The system supports fixed price and time billing, so no matter how you charge clients, the system will help you monitor your project budgets and keep a closer eye on finances.
For small businesses that already use Xero’s bookkeeping system, the system is free for the remainder of 2017. After this, an extra monthly user fee subscription will apply to the system