Xero in on Xero
Hang around the Xero ecosystem long enough and you’ll start hearing chatter about niches and verticalizing your business. And it’s great advice - I’ll admit I was skeptical at first, but it made distinct differences not just to our bottom line, but also our client engagement.
One of the many efficiencies you gain when verticalizing is in standardizing the accounting framework. Another is a standard set of financial statements, and that’s the focus for this article. Preset financial templates allow for consistency across your client base, and position you as a thought leader for that industry.
By now you’re all aware of the Custom Reports functionality in Xero’s newest iteration of the reporting engine. This engine allows for customized reports at the client level, and really ups the game when it comes to advisory services. Building reports for every individual client from scratch can be a very resource-intensive process.
Enter Xero’s Report Templates function, which allows for customized reporting formats at the firm level that can be accessed and deployed into specific clients. You can access from the (not surprisingly titled) “Reports” section of Xero HQ:
Xero Report Templates 1
From here you have full access to the standard suite of Xero reports, along with the ability to create custom reports from scratch. All of the editing options are the same as at the individual company level - grouping, rows, columns, and the ability to rename the report headings and footers. For example, if you are setting up a packet for a group of not-for-profit clients, you can rename the Income Statement to be the “Statement of Activities.” Or you can use the grouping function to put together a more detailed Income Statement that includes the calculations for Gross Margin, Contribution Margin and EBITDA so they are populated right off the bat.
Xero Pro Tip: It is important to note that this feature doesn’t just apply to individual reports - you can create entire reporting packets for an industry group (or other client grouping if it makes more sense in your particular packet). These report packets can include the standard suite of financial statements, custom schedules, and even narratives and other commentary, as in the example below:
Xero Report Templates 2
There will definitely be some customization to be done at the individual client level - it’s unlikely that all your clients have Tracking Categories with exactly the same names, for example. But it still cuts the initial time investment by a significant amount, well over half in our experience.
Finally, the Report Templates section now provides the ability to set up custom fields that can be included in reports, at both the client and practice levels. An example would be the contact name at each client who the reports are sent to. For more information, there is a Xero Help article here.
As the industry continues to move forward, efficiencies and standard processes are becoming ever more vital to a successful and profitable firm, and Report Templates are a strong investment in this area.
Dan Schmidt
Author Bio: Dan Schmidt is the CEO of The Emerging Business CFO, a virtual accounting and financial advisory firm that works to free founders and entrepreneurs from the stress of managing the daily operational grind. The company offers operational accounting, systems setup and fractional CFO services. Twitter: @ebcfo