Bright Horizon Accountancy | Chartered Accountants Bournemouth | Xero Accountants http://thebrighthorizon.co.uk Cloud-based Accountants in Bournemouth Mon, 24 Apr 2017 14:02:46 +0000 en-GB hourly 1 https://wordpress.org/?v=4.9.3 What has been going on at Bright Horizon? http://thebrighthorizon.co.uk/blog/blog/spring-update/ http://thebrighthorizon.co.uk/blog/blog/spring-update/#respond Mon, 24 Apr 2017 13:54:02 +0000 http://thebrighthorizon.co.uk/?p=1770 Hi all – it has been a while since we posted on the blog here but if you read on you will see that we have had a very busy time here at Bright Horizon since November with a lot of changes. As I am sure existing customers are aware by now Bright Horizon was […]

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Hi all – it has been a while since we posted on the blog here but if you read on you will see that we have had a very busy time here at Bright Horizon since November with a lot of changes.

As I am sure existing customers are aware by now Bright Horizon was taken over on 1st November by family owned Kara Accountants Ltd of Fawley, Southampton and Emily handed over the reigns and directorship to Nick and Jody Miles from that date.

Emily’s reason for the change of management was that she was very excitedly expecting her first child and we are pleased to report that mother and baby are both well enjoying life away from the hustle and bustle of accounting for now.

Bright Horizon remains for the time being a separate trading name of Kara Accountants Ltd. We had made arrangements to move from our office in Mudeford to a more central location in Bournemouth with Lewis to head up a branch over there. Unfortunately Lewis has had to make a difficult and unexpected decision to return home to his family in Essex for personal reasons. We of course thank him for his time with us and wish him all the best for the future.

This has put us a little on the back foot when it comes to moving premises, we have recruited here and between Tina, Sandra and the rest of the staff here we have the workload covered but without a local member of staff the office move has gone on hold temporarily.

We will of course re-instate a Dorset presence in the near future but for the time being our Fawley office should be used for any post please.

Internal changes aside we are all enjoying the start of what looks to be an interesting tax year. The economy looks to be on the up with the majority of clients showing improved sales particularly in the digital sector.

We hope you are all enjoying 2017 so far and please dont hesitate to contact us if you have any

 

 

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Merry Christmas http://thebrighthorizon.co.uk/blog/blog/merry-christmas/ http://thebrighthorizon.co.uk/blog/blog/merry-christmas/#respond Fri, 23 Dec 2016 10:32:29 +0000 http://thebrighthorizon.co.uk/?p=1754   We here at Bright Horizon would like to wish all of our clients a blessed and joy-filled Christmas and New Year. We look forward to continuing the journey with you in 2017!      

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We here at Bright Horizon would like to wish all of our clients a blessed and joy-filled Christmas and New Year.

We look forward to continuing the journey with you in 2017!

 

 

 

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Are You Ready For Making Tax Digital? http://thebrighthorizon.co.uk/blog/blog/ready-making-tax-digital/ http://thebrighthorizon.co.uk/blog/blog/ready-making-tax-digital/#respond Fri, 16 Dec 2016 13:22:13 +0000 http://thebrighthorizon.co.uk/?p=1744 According to research by IRIS, the accountancy software firm, nearly 47% of businesses are using bookkeeping methods not fit for purpose for the upcoming Making Tax Digital (MTD) changes. What Is Making Tax Digital? Making Tax Digital is the government’s strategy to reduce processes involved in tax administration by collecting data in real-time directly from […]

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According to research by IRIS, the accountancy software firm, nearly 47% of businesses are using bookkeeping methods not fit for purpose for the upcoming Making Tax Digital (MTD) changes.

What Is Making Tax Digital?

Making Tax Digital is the government’s strategy to reduce processes involved in tax administration by collecting data in real-time directly from sources such as a businesses accounting software, employers, banks, other governments departments and so on. 

The plan is to eliminate the need for once per year tax returns, instead individual tax payers and businesses will have a single online portal populated by the information from these sources so you can see your tax liabilities in real-time instead of waiting until the end of the year to know how much you will need to pay.

Am I Ready?

Businesses and those who are self-employed will have to update HMRC at least quarterly which will be done primarily by using accounting software, however, with 22% of businesses not using software at all to manage their accounting records and many more not using software that will be up to task, the transition to MTD will be arduous at best and chaos at worst.

But there is GOOD NEWS for Bright Horizon clients! As we already use the best digital accounting software on the market, the move to MTD will be a seamless and pain-free process! But, if you’re not a client and would like to talk to an accountancy practice working at the forefront of technological change and adoption, you can contact us here.

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Income Tax Relief: What can you claim? http://thebrighthorizon.co.uk/blog/blog/income-tax-relief/ http://thebrighthorizon.co.uk/blog/blog/income-tax-relief/#respond Fri, 09 Dec 2016 16:49:42 +0000 http://thebrighthorizon.co.uk/?p=1738 With Christmas leaving bank balances diminished and the self assessment deadline approaching, it may  be in your interest to consider claiming income tax relief. In this week’s blog post we will introduce you to some of the key information for available income tax reliefs. What Is Tax Relief? ‘Tax relief’ means that you either: pay […]

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With Christmas leaving bank balances diminished and the self assessment deadline approaching, it may  be in your interest to consider claiming income tax relief.

In this week’s blog post we will introduce you to some of the key information for available income tax reliefs.

What Is Tax Relief?

‘Tax relief’ means that you either:

  • pay less tax to take account of money you’ve spent on specific things, like business expenses if you’re self-employed
  • get tax back or get it repaid in another way, like into a personal pension

You get some types of tax relief automatically – but some you must apply for.

When You Can Get Tax Relief

Tax relief applies to pension contributions, charity donations, maintenance payments and time spent working on a ship outside the UK.

It also applies to work or business expenses – you may be able to:

  • get tax relief on what you spend running your business if you’re self-employed (a sole trader or partner in a partnership)
  • claim tax relief if you’re employed and you use your own money for travel and things that you must buy for your job

Pension Contributions

Tax relief is automatically claimed when your::

  • employer takes workplace pension contributions out of your pay before deducting Income Tax
  • pension provider claims tax relief for you at a rate of 20% and adds it to your pension pot (‘relief at source’)

(You get relief at source in all personal and stakeholder pensions, and some workplace pensions.)

You may be able to claim tax relief on pension contributions if:

  • you pay Income Tax at a rate above 20% and your pension provider claims the first 20% for you (relief at source)
  • your pension scheme isn’t set up for automatic tax relief
  • someone else pays into your pension

If you pay income tax at rates above 20% you can claim tax relief on the extra percentage (For example if you pay income tax at 40%, you can claim tax relief on the extra 20%) in your self assessment tax return.

If your pension scheme isn’t set up for automatic tax relief you can claim tax relief in your self assessment tax return but you can’t claim tax relief if your pension provider isn’t registered with HMRC.

Charity donations

Donations to charity from individuals are tax-free. You can get tax relief if you donate through Gift Aid or straight from your wages or pension (Payroll Giving)

Gift Aid

Charities and community amateur sports clubs registered with HMRC can claim back the tax you’ve already paid on your donation through Gift Aid and if you pay a rate of tax above 20%, you can claim back the difference between the tax you’ve paid on the donation and what the charity got back when you fill in your Self Assessment tax return.

Payroll Giving schemes

If your employer or pension provider offers a Payroll Giving scheme, any donations you give through the scheme will be taken before Income Tax is taken off, howver, you’ll still pay National Insurance contributions on the amount of your donation.

Maintenance payments

Maintenance Payments Relief is worth 10% of the maintenance you pay to your ex-spouse or civil partner (up to a maximum of £322) and can be claimed if all of the following apply:

  • either of you were born before 6 April 1935
  • you’re paying maintenance under a court order after the relationship has ended
  • the payments are for the maintenance of your ex-spouse or former civil partner (provided they aren’t now remarried or in a new civil partnership) or for your children who are under 21

Tax relief for Employees

You may be able to claim tax relief if you have to use your own money to pay for travel or other work expenses, however, how much you can claim depends on the rate you pay tax. (Example: If you spent £60 and pay tax at a rate of 20%, the tax relief you can claim is £12.).

You can only claim relief for expenses which are solely for work and have been purchased within the last 4 years (records must have been kept), but please bear in mind that you can not claim tax relief if your employer has provided an alternative or reimbursed you for the expenses.

Note: If you don’t fill in a Self Assessment tax return, you will need to contact HMRC to claim any of the mentioned tax reliefs

For the full details of the tax reliefs mentioned, you can visit the government website at gov.uk/income-tax-reliefs/overview or you can contact the team here at Bright Horizon.

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The new VAT Flat Rate Scheme: How Will It Affect You? http://thebrighthorizon.co.uk/blog/tax/new-vat-flat-rate-scheme/ http://thebrighthorizon.co.uk/blog/tax/new-vat-flat-rate-scheme/#respond Fri, 02 Dec 2016 14:22:32 +0000 http://thebrighthorizon.co.uk/?p=1731 Although changes to VAT is generally only water cooler chat within accountants offices, the announcement by Chancellor of the Exchequer Philip Hammond of changes to the Flat Rate Scheme should be essential reading this week for all VAT registered sole traders and small businesses. Below we have set out some key information about these changes […]

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Although changes to VAT is generally only water cooler chat within accountants offices, the announcement by Chancellor of the Exchequer Philip Hammond of changes to the Flat Rate Scheme should be essential reading this week for all VAT registered sole traders and small businesses.

Below we have set out some key information about these changes and how they may affect your business.

What is the VAT Flat Rate Scheme (FRS)?

Normally, the amount of VAT a business pays over to HMRC is VAT charged on sales less VAT reclaimed on expenses. However, businesses with a VAT exclusive turnover of £150,000 or less have the option to apply to join the Flat Rate Scheme.

A benefit of this scheme is simplified tax management for sole traders and small businesses who, rather than calculating their VAT liability as mentioned above, instead pay a fixed percentage of sales. 

E.g. A hairdresser on the FRS at 13% charging a customer £10 including VAT would be liable to pay HMRC £1.30.

Although tax savings were not intended as a benefit of the scheme, many sole traders and small businesses who’s expenses consisted significantly of labour costs, for example, could end up reaping such a reward. Although this is about to change…

What is changing?

The Chancellor of the Exchequer has announced a significant change to the Flat Rate Scheme for what will now be called ‘limited cost traders’ who will have to use a rate of 16.5%.

According to HMRC’s website, businesses using the FRS will be defined as a limited cost trader if:

  • VAT inclusive expenditure on goods is less that 2% of VAT inclusive turnover

Or

  • Greater than 2% but less than £1000 per annum.

This expenditure on goods will exclude capital expenditure, food and drink used by the business and it’s employees or vehicles (including vehicle parts and fuel – except for transport service businesses). The purpose of the exclusions being ‘to prevent traders buying either low-value everyday items or one-off purchases in order to inflate their costs beyond 2%’

Will This Affect Me?

Labour intensive businesses (e.g graphic designers, accountants, IT contractors, consultants, hairdressers, etc) who spend very little on goods will end up paying more VAT over to HMRC. This will be due to the increased flat rate percentage of 16.5% which is higher than any of the current FRS percentages currently used (a list can be found here).

What Should I Do?

The new changes come into force on 1 April 2017.  If you are already registered on the FRS or are currently considering doing so, you should analyse your sales and costs to determine whether being registered on the FRS will be beneficial to your business in line with HMRC’s definitions in their technical note on the change .

We will continue to update this post as further details and guidance are released by HMRC, but in the meantime if you seek assistance in understanding the changes or working out how they might affect you, do not hesitate to contact us.

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The Autumn Statement http://thebrighthorizon.co.uk/blog/blog/the-autumn-statement/ http://thebrighthorizon.co.uk/blog/blog/the-autumn-statement/#respond Fri, 25 Nov 2016 10:15:05 +0000 http://thebrighthorizon.co.uk/?p=1727 This week the autumn statement was delivered with some changes announced that will likely have an impact on you, your business and your employees.  Read on to find out how. Minimum wage rise This year the minimum wage rose to £7.20 and the autumn statement announced that it will rise once again to £7.50 per […]

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This week the autumn statement was delivered with some changes announced that will likely have an impact on you, your business and your employees.  Read on to find out how.

Minimum wage rise

This year the minimum wage rose to £7.20 and the autumn statement announced that it will rise once again to £7.50 per hour for those aged over 25.

Now is a great time to plan how this will impact your bottom line and whether you will need to adjust your pricing accordingly.

Salary sacrifice

Many businesses offer perks to employees available through salary sacrifice schemes including gym subscriptions, cycle to work schemes and child care vouchers – many of the most popular salary sacrifice schemes will be unaffected.

If you offer gym subscriptions, health screening and computers under salary sacrifice these will be now subject to taxation from April 2017.

Insurance premium tax rises

The statement announced that in June 2017 insurance premium tax will rise from 10% to 12%.  This will effectively be the theirs consecutive rise in this tax over an 18 month period. 

As  result expect increases on your business insurance next year.

Tax relief for small scale sellers

If on the side you make a bit of extra cash by selling online or at Car Boot sales for profit then a new tax relief has been announced.  The tax relief will come into play from April 2017 and the first £1,000 of income will not be taxable.

This does not apply if you are selling items you currently own (ie not for profit) as you are not taxed on this income. 

Tennant fees banned

If you are a letting agent you will soon be banned from charging upfront fees to tenants. 

At present there is not currently a defined date when this ban will come into play, however the chancellor says this will come into force as soon as possible.

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Managing Petty Cash in Xero http://thebrighthorizon.co.uk/blog/blog/managing-petty-cash-xero/ http://thebrighthorizon.co.uk/blog/blog/managing-petty-cash-xero/#respond Fri, 18 Nov 2016 14:48:05 +0000 http://thebrighthorizon.co.uk/?p=1699 For many businesses who manage petty cash floats, once the business has moved from paper records to accountancy software such as Xero recording cash income and expenditure within the software can often be forgotten. Below, we have provided a step-by-step guide as to how to keep and manage a petty cash account in Xero. Creating […]

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For many businesses who manage petty cash floats, once the business has moved from paper records to accountancy software such as Xero recording cash income and expenditure within the software can often be forgotten.

Below, we have provided a step-by-step guide as to how to keep and manage a petty cash account in Xero.

Creating The Petty Cash Account

To create a petty cash account, the simplest method is to use the same feature to set up bank accounts.

    1. From the main screen go to Accounts, then Bank Accounts.
    2. Then click Add Bank Account.
    3. In the Find Your Bank screen, type in ‘Petty Cash’ and select Add It Anyway when 0 results appear.
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    4. Then you need to enter the account details.
      1. Bank – enter ‘Petty Cash’
      2. Account Name – enter ‘Petty Cash’
      3. Account Type – select ‘Other’
      4. Account Number – enter all 0’s for the sort code and ‘Petty Cash’ for the account number.
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    5. Click Save

Entering The Opening Balance

Now you will need to enter the balance of the petty cash you currently hold. You can do this one of two ways.

Entering an Opening Balance

  1. Go to Settings then General Settings
  2. Click Conversion Balances
  3. Click Show All Accounts
  4. Find Petty Cash and enter the balance into the Debit column.
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  5. Click Save

Transfer Money into Petty Cash Account

  1. From the main screen go to Accounts and the Bank Accounts
  2. Click Transfer Money
  3. Choose the account you’re transferring the money From (e.g business current account)
  4. Choose the account you’re transferring the money To (in this case, the petty cash account)
  5. Select the Date
  6. Input the Amount
  7. Add a Reference if you wish
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  8. Click Transfer

Recording Transactions

After you have the petty cash account set-up, you can then begin to record the income and expenses.

  1. Go to Account and then Bank Accounts
  2. Find and click Petty Cash
  3. Select Manage Account
  4. Select either:
    1. Spend Money (to record expenses)
    2. Receive Money (to record sales and other income) or
    3. Transfer (to record the movement of money to and from the petty cash account and the other business bank account)
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  5. Enter the transaction information
  6. Click Save

Reconciling the Petty Cash Account

Once you have been recording transactions in the petty cash account, you will need to regularly reconcile the account also, as you would with the other bank accounts. However, as the petty cash doesn’t have bank statements to import, you will need to reconcile transactions manually.

  1. Enable the Mark as Reconciled feature by clicking the ? symbol in the top right of the screen when in the Petty Cash account.
  2. Click Enable Mark as Reconciled (you will only need to do this the once)
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  3. Click on the Account Transactions tab
  4. Once you have reviewed the transactions, click More and then Mark as Reconciled

If you have any further questions about maintaining a petty cash account in Xero (or any other accounting queries), please do contact us here at Bright Horizon. We’d love to hear from you!

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How To Turn Your Daily Commute Into Productive Time http://thebrighthorizon.co.uk/blog/blog/turn-daily-commute-productive-time/ http://thebrighthorizon.co.uk/blog/blog/turn-daily-commute-productive-time/#respond Fri, 11 Nov 2016 11:49:13 +0000 http://thebrighthorizon.co.uk/?p=1694 Time is the most important asset of the business owner and as such by making the most of this asset you can help your business thrive. How many minutes or hours do you spend each day commuting to the office?  Did you know the average commuting time in the UK is 49 minutes each way […]

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Time is the most important asset of the business owner and as such by making the most of this asset you can help your business thrive.

How many minutes or hours do you spend each day commuting to the office?  Did you know the average commuting time in the UK is 49 minutes each way – this equates to over 8 hours per week!

Depending on whether you drive, walk or take the train there are valuable ways to make the most of the unused time. 

Take a look at our tips below to become super efficient and watch your business grow.

Listen to a Podcast

These days you can listen to a podcast on virtually anything.  If you run a business listening to a short podcast each day can give you ideas to implement in your own business and helps you to see the big picture.

Once your business is up and running often you get bogged don in the small mundane daily tasks and loose sight of the overall direction – having daily inspiration really can help put you back on track.

We recommend these top business related podcasts:

  • BBC Business Daily
  • Entrepreneur On Fire
  • Tim Ferris Show
  • Start Up
  • Master In Business

Catch up on the accounts

if you get the bus, plane or train to work then this is the perfect time to catch up on a spot of bookkeeping or taking a look at you business performance.

Did you know that you can access Xero even from your phone or tablet by downloading the App?  This saves waiting to the end of the week to spend the afternoon catching up on the accounts.

Be one step ahead

This time can also be used to catch up on emails and phone messages so once you get in the office you can work through your to-do list with a clean inbox and peaceful mind.

We recommend that you download an email add-on that lets you delay sending an email.  This means you could be drafting replies to your emails on the train at 7:30 in the morning but scheduled them to send at 10am. 

Relax

You have a busy day ahead of you no doubt – you could use this time to relax and unwind so you have a clear mind to start your day. 

You could spend the precious time reading, listening to relaxing music, or even getting a bit of shut eye – do what you need to do to get to the office focused for the day ahead.

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The Alternative Office Christmas Party http://thebrighthorizon.co.uk/blog/blog/alternative-office-christmas-party/ http://thebrighthorizon.co.uk/blog/blog/alternative-office-christmas-party/#respond Fri, 04 Nov 2016 17:09:46 +0000 http://thebrighthorizon.co.uk/?p=1680 For many of us, the Christmas party is a staple in the office calendar, but these parties can often become dull and unimaginative. However, this year you can transform the Christmas season into a festive, fun-filled holiday period for the whole team. We’ve listed below a couple of ideas which we hope will help you […]

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For many of us, the Christmas party is a staple in the office calendar, but these parties can often become dull and unimaginative. However, this year you can transform the Christmas season into a festive, fun-filled holiday period for the whole team.

We’ve listed below a couple of ideas which we hope will help you to get your creative juices flowing to make this Christmas in the office one that will spread joy throughout the office!

The Christmas Crafternoon

At the beginning of the Christmas season, instead of buying decorations from the local supermarket why not have an afternoon of crafts in the office and enlist the whole team in creating this year’s office decorations? All whilst listening to a cheesy Christmas playlist, drinking a couple of hot toddies and trying to resist the temptation to wrap the desk of the team member who was unlucky enough to be out sick.

The Holiday Filmathon

If you fancy a relaxed alternative to the traditional Christmas office party, why not host a Christmas themed movie marathon? Clear the furniture, layout some large comfortable seating and order in the snacks and drinks.

The Elf Party

Rather than a mundane party which is just water cooler chat with alcohol added to the mix, why not plan an evening filled with fun, festive themed team-building exercises? From gingerbread house building competitions to group present wrapping races, team bonding will make the evening all that more enjoyable.

The Scavenger Hunt

If you wish to take the party out of the office, why not host a Christmas-themed scavenger hunt? Split into teams to hunt down the party supplies needed for the ultimate Christmas party waiting at the end of trail. If your customers are based locally, this can also be a good opportunity to include them in your festive games by having them host the item locations.

As the days grow darker and colder, keep your team’s spirits up by planning the ultimate Christmas party for them to look forward to!

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Xero Direct Bank Feeds http://thebrighthorizon.co.uk/blog/blog/xero-direct-bank-feeds/ http://thebrighthorizon.co.uk/blog/blog/xero-direct-bank-feeds/#respond Fri, 28 Oct 2016 14:25:56 +0000 http://thebrighthorizon.co.uk/?p=1677 For many business that have been using Xero for a while now you will be used to the frequent task of having to refresh your bank feed before reconciling the bank transactions.  If you are a business with a fair few transactions the process of updating the feeds can take quite a while each time […]

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For many business that have been using Xero for a while now you will be used to the frequent task of having to refresh your bank feed before reconciling the bank transactions. 

If you are a business with a fair few transactions the process of updating the feeds can take quite a while each time and many directors can find this process rather laborious. 

The good news is that in the last few months Xero has been introducing direct feeds with many of the UK’s most popular banks. 

How does this change the current process?

If you are used to having to manually refresh your bank feed then this means that you bank feed connection is ran through a company called Yodlee. This is a third party that links your bank transactions lines and feeds them into Xero.

Under direct feeds the need to use Yodlee is removed so the data comes straight from your bank. 

The biggest change as a result of this is that you no longer need to manually refresh the bank account each time you want to see the up to date list of transactions. 

What are the benefits of switching to direct feeds?

The main benefit of switching to a direct feed is that Xero each day will display up to date transactions imported straight form the bank.  The saves the job of having to remember to update the feed.

It also means that if you delegate the task of bookkeeping then the bookkeeper isn’t reliant on you to refresh the feed – which is very handy if you are out at meetings or on holiday. 

Another benefit is that if you use Yodlee as it is a third party occasionally there are problems with the bank feed which can cause transactions to be missed or duplications to be pulled in.  By using direct feeds the likelihood of this happening reduces greatly as the data does not need to go through a third party.

How do I get this set up?

Most major UK banks now offer the direct feed through Xero so you need to check via the Xero Helpcentre if your bank offers this.

For many of the banks to get this set up you need to complete a form and post it off to authorise the direct feed set up, which can take a couple of weeks.  However the process differs for each bank so we suggest you take a look at the Xero help centre as it will include details for each bank on how to set it up.

Finally many banks charge a small fee for the bank feeds – this is then either added to the Xero invoice or charged directly to you are a bank charge – again it differs for every bank.

Want to know more?

We think that direct feeds are a brilliant and efficient way to have transactions pull automatically into Xero and for such a small fee. 

If you are interested n getting this set up then get in touch and we will let you know if this is compatible for your business bank.

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