businessman, productivity

What is labour productivity and how does it impact your business?

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Unlocking the Power of Efficiency

Insights and Strategies for Small Business Owners

If you or your clients are looking for ways to grow profits, drop prices or pay staff more, then one strategy is to lift productivity in your business. But what is productivity exactly (hint: it’s not about working longer hours), and how can you lift it in your small business or practice?

What is small business productivity?

Small business productivity is the measure of how much value a business can produce using the resources it has at its disposal (ie staff, capital, materials). It’s usually measured using the dollar-value of outputs per hour worked or per employee. To put it more simply: sales/hour or sales/employee. Generally, the higher the sales/hour, the more productive a business is.

New insights on small business productivity

A new Xero Small Business Insights (XSBI) report has been released, Small business productivity: Trends, implications and strategies, looking at recent small business productivity trends across Australia, New Zealand and the United Kingdom. In addition to trends and insights, the report also provides some tips on how you can lift productivity in your business and for your clients.

Measuring labour productivity isn’t new, but what’s out there is generally broader, slower to be released and covers longer periods of time (quarterly or annual). Methodologies also tend to differ. This XSBI data is the first time that small business labour productivity has been measured using anonymised and aggregated data (not surveys) for small businesses only, on a monthly basis, and using the same methodology across each country.

Technology can improve productivity

One of the main findings of the report was evidence of the productivity boost small businesses can get from embracing digital tools.

General economic wisdom is that small businesses tend to have lower productivity than large businesses. But the study found that, particularly after the pandemic, small businesses tended to have higher productivity growth when compared with data covering all businesses in a country.

One reason for this result is down to a key characteristic of the small businesses in the XSBI data set – by definition they all use at least some form of technology (like Xero) to help run their business, and they have an accountant or bookkeeper too. This finding really highlights the benefits that digital technology (or digitalisation) can deliver to small businesses that embrace it, especially with the help of their advisors.

It also highlights the huge opportunity available to governments from policies that encourage all small businesses to embrace digitalisation in their operations.

How did the pandemic impact productivity?

Unsurprisingly, productivity in all three countries took a hit during the peak pandemic years of 2020 and 2021. Many small businesses were forced to temporarily close but still paid their staff, thanks to government wage subsidy schemes. This meant that even though businesses were paying staff, they were producing or selling much less, resulting in much lower productivity.

Once economies re-opened, sales took off but small businesses struggled to find more staff. Existing workers had to step up and lift their productivity to keep up with the surge in customers. As things settled down, this post-pandemic ‘productivity spike’ unwound due to slowing sales growth and the need to train some of the newly hired staff. Come December 2023, all three countries’ productivity has slipped below pre-pandemic averages.

This softening of productivity over 2023 adds to the economic challenges we face: how to lift economic growth and get inflation back to normal as quickly as possible. Boosting productivity is a great way to do both of these.

What does this mean for your business?

Productivity is about working smarter – it’s not about working longer hours. If you and your clients already use tech tools in your businesses, then you’re already ahead of your competitors that aren’t. But that doesn’t mean your businesses are as productive as they could be. To help understand how to lift productivity in your businesses, Xero has put together a handy guide: Increasing productivity in small business.

The steps you and your clients can take fall into four broad areas:

  • Find tools that amplify your work and invest in them. You could start this by simply finding out which Xero App Store apps might be useful to add to your stack and help you run your business better
  • Reevaluate your current processes: are they really working?
  • Set your workers up for success through upskilling and training
  • Harness your entrepreneurial skills to build a business that operates at its full potential

GET XERO TRAINING

Learn how to take advantage of all Xero’s cool and sophisticated bookkeeping features, with personalised training from a Notch Above Bookkeeping Certified Xero professional. Book personalised Xero training »

Related reading

https://notchabove.com.au/category/quick-xero-tips/

Source: https://blog.xero.com/data-insights/xsbi-small-business-labour-productivity/

A Look into Xero Invoicing Updates

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Unlocking Enhanced Flexibility and Functionality

Xero has announced that they will be retiring the older version of their invoicing product ‘classic invoicing’ on 2 September 2024.

Xero teams are busy building a new invoicing product that is going to give users more flexibility and customisation in the future, with better checkout experiences and unlimited payment methods.

Building new features you love

There are so many great ideas about what invoicing features we’d like to see in Xero. Unfortunately, they can’t be rolled out in classic invoicing because of the limitations faced with the older technology (think of it like trying to plug an electric charger into a classic car).

The new invoicing solution is a flexible and scalable solution that’s built on the latest technology, so Xero can build the features you need now and in the future.  Some of the features being worked on at the moment include:

  • adding multiple delivery addresses on an invoice
  • requesting partial payments and deposits via invoicing
  • more customisation of invoicing templates and on repeating invoices
  • improved control and smarter scheduling of reminders
  • easier statement creation and statement payment capability.

The changes made so far (and what’s next)

In addition to this list of features exclusive to new invoicing, there are a number of features from classic invoicing that Xero is planning to bring across to the new version, many of which will be available before September.

So far, they have already introduced the following improvements to new invoicing:

  • Copy information from invoices to quotes
  • Option to ‘Create another invoice’ once an invoice is approved
  • Add ‘Reference’ when adding a payment without an extra click
  • Option to ‘Send receipt’ after a payment is added to an invoice
  • Quickly create and save a contact on the fly without extra clicks
  • View item code on the ‘View invoice’ page
  • Paste numbers with commas or dollar signs into line items
  • Delete line items in just one click.

Many of these changes are in response to feedback about the design and usability of new invoicing, and development teams are working hard to make sure these will improve processes and workflows.

There is plenty of time to keep exploring new invoicing, as new functionality is rolled out. Remember, you can keep switching between the two versions until classic invoicing is retired on 2 September 2024.

XERO TRAINING

Learn how to take advantage of all Xero’s cool and sophisticated bookkeeping features, with personalised training from a Notch Above Bookkeeping Certified Xero professional. Book personalised Xero training »

Artificial Intelligence AI

Navigating Artificial Intelligence

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How small businesses are navigating AI

The hype around artificial intelligence (AI) is making small businesses feel that its development and adoption are moving at lightning speed.

Curiosity outweighs concerns

Even with ethical concerns in the frame, and with AI tools becoming more easily accessible, small business owners want to be proactive and stay ahead of the curve. New Xero research found that globally, 32% of businesses are experimenting with AI tools, and 21% are investing in them. The results also showed:

  • one in five small businesses were dedicating more resources to AI
  • more than half (51%) said they trusted AI tools with identifiable customer information
  • 45% of respondents said they would trust AI tools with sensitive commercial information

In fact, new Xero research shows that 80% of small business owners globally are concerned that the fast pace and nature of AI are leaving regulation in the dust. They told Xero they want governments to do more, given the potential big impact on industries and the workforce.

Xero launched their Future Focus research on AI at Xerocon Sydney this year, taking an in-depth look at how 3,000 small business owners from across Australia, New Zealand, Canada, Singapore, the UK and the US feel about AI and the potential impact on their business.

Mixed feelings about research findings

So, what did the research say? In a nutshell — small businesses have mixed feelings about AI. They’re curious and excited, but there’s also concern about ethical implications and data privacy.

Almost a third (32%) of small businesses are intrigued about AI, while others are feeling anxious (31%) and excited (30%). Half of small businesses believe AI will be more helpful and have a positive impact on their people, processes and workflows, compared to 20% who said they believe it will be more harmful.

Sensitive information disclosure (41%) and data privacy violations (41%) were considered to be the biggest ethical challenges relating to AI use in their business. Some (38%) respondents were also concerned about the ethical challenges around worker displacement that could be caused by AI utilisation.

The challenges of using AI

While AI has piqued the interest of small business owners, it’s not the top priority for small businesses just yet. Only 8% of respondents ranked adopting or investing in AI as their number one priority over the next 12 months.

In terms of the small businesses that are already using AI, 69% are reporting some drawbacks, and 23% have seen increased security or privacy issues since using generative AI tools. These drawbacks included:

  • increased biases or inaccuracies in content (18%)
  • decreased employee morale (18%)
  • decreased efficiency due to time overseeing the quality control of AI content (16%)
  • reduced headcount (14%)

While reduced headcount can be seen as a drawback, it can also support small business owners to be more efficient and save on costs. Though 59% of small business owners said they don’t see their hiring plans changing over the next three years, a third (31%) said they plan to hire fewer people.

A reminder to use data responsibility

The interest in generative and predictive AI is understandably driving curiosity among small businesses. But if exploration of this technology leads to sharing personal identifiable information, that could put their customers’ data at risk.

Because of how important protecting sensitive data is, Xero has had, for many years now, responsible data use commitments that guide them as a business, and help support Xero customers as they navigate their own data use.

Xero also announced a number of new, exciting AI-powered features and generative AI experiments at this year’s event.

Considering Xero for your business? Notch Above Bookkeeping’s Xero Certified Advisors are here to answer any questions or to help your business upgrade to or optimise using Xero. Contact us on 1300 015 130.

Source: Xero

Annie of Notch Above Bookkeeping providing Xero training

Xero Beautiful Business Fund submissions now open

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Submissions open for inaugural Xero Beautiful Business Fund

Xero small business customers have until 6 October to enter for a share of $750,000 in funding globally

Xero, the global small business platform, marked day one of Xerocon Sydney 2023 by opening applications for its inaugural Xero Beautiful Business Fund, designed to celebrate small businesses, empower success and help accelerate their growth. The initiative is now open for submissions with Xero funding available to support the future aspirations of small businesses globally.

The Xero Beautiful Business Fund is open to Xero small business customers in Australia, New Zealand, Canada (excluding Quebec), Singapore, South Africa, the US and the UK and will recognise companies who are eager to take the next step in various aspects of their business.

There are low barriers to entry and to apply

Xero small business customers will need to submit a 90-second pitch video and complete a brief written form for as many categories as they would like to enter:

  1. Innovating for sustainability: For small businesses who want to take the next step on their sustainability journey. For example, it could be to move to sustainable packaging, implement energy-efficient equipment or carbon-neutral transport.
  2. Trailblazing with technology: For small businesses seeking to innovate. This could include digitalising parts of their operations or integrating new emerging technologies.
  3. Strengthening community connection: For small businesses or non-profits who strive to give back to their communities. It could be to contribute to philanthropy, social good, or make an impact on the community in a meaningful way.
  4. Upskilling for the future: For small businesses seeking to support upskilling for themselves or their employees. This could include access to training and other professional development opportunities.

Each submission should be future-focused and detail how the funding would benefit the small business.

“Supporting and celebrating small businesses and their owners is at the core of Xero’s mission, and we’re energised by the opportunity to empower these companies and trailblazers with funding that can help them achieve the next level of success,” said Sukhinder Singh Cassidy, Xero CEO.

“We already know that so many of our customers embody Xero’s values, and we’re pleased to be awarding funds to help our customers in an area like sustainability or upskilling, where they may not have had the cash to do so.”

A total of 28 regional winners, one from each region for each category, will be determined by regional judging panels before being put forward to the global judging panel to select the global winner for each of the four categories.

Good luck! Winners will be announced later this year.

Considering Xero for your business? Notch Above’s Certified Xero Bookkeepers in Brisbane are here to answer any questions or to help your business upgrade to or optimise using Xero. Contact us on 1300 015 130.

Source: Xero

xero user

Apply for Xero Beautiful Business Fund

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Xero Users can register to apply for a share in $750k Xero funding

Xero has announced the launch of their Xero Beautiful Business Fund, an initiative backing business for the future with a share of $750,000 funding available to Xero customers globally so your business can keep doing what it does best.

It starts by registering your interest for more information here »

Complete a quick online form to receive further updates about the Xero Beautiful Business Fund when it opens for applications from 23 August 2023.

Apply in one or more categories

Small businesses using Xero in Australia, Canada, New Zealand, Singapore, South Africa, the UK and the US can apply.

There are four categories and no limit on how many you can enter. If you think you qualify for each, Xero encourages you to go for it:

  1. Innovating for sustainability
  2. Trailblazing with technology
  3. Strengthening community connection
  4. Upskilling for the future

Key dates

  • Applications open on 23 August 2023 and close on 6 October 2023
  • When entries open on 23 August, complete your application along with a pitch video
  • Winners will be announced November 2023.

Good luck!

Certified Xero Bookkeepers

Notch Above Bookkeeping are Certified Xero bookkeepers and feature agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero bookkeeping services below and get in touch today to discuss the plan which best suits the needs of your business.

Related reading

Moving to new Xero Reports

5 tips for Xero users

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Five tips from this year’s Xero quarterly product updates

Did you know that Xero has an inbuilt calculator? Are you across Xero’s inbuilt timesaver features? Across useful ways to use contact groups?

1. Save time with the inbuilt calculator

Did you know that Xero has an inbuilt calculator? It allows you to calculate amounts as you create transactions. When you are in a numeric field in Xero, you can enter a calculation and then press Enter or Tab, and Xero will calculate the result. For example, entering 7+2 and then Enter will display as the number 9 in the field.

The calculator is available in the Quantity, Unit Price and Disc % fields in transactions, and the Debit and Credit fields in manual journals.

In new invoicing, discount percentages are calculated automatically, so the calculator isn’t needed.

2. Add planned payment dates from the Awaiting Payment tab in bills

This tip helps you manage cash flow and plan when to pay bills. You can add a planned date to a purchase invoice in the Awaiting Payment tab to create a planned payment schedule.

This is great for businesses with a daily payment limit on their bank accounts, because Xero totals the bills as you select them — so you can see if the total exceeds your daily limit. If you’re using short-term cash flow in Xero Analytics, this also makes it easy to keep your planned payment dates up to date, so your cash flow forecast is more accurate.

3. Use keyboard shortcuts to navigate around Xero

Here’s a great timesaver which you can use from most screens in Xero. If you enter the forward slash (/), you’ll open the global search. You can then type a letter to navigate straight to a page.

For example, entering ‘/b’ will take you to bills,  ‘/c’ will take you straight to contacts and ‘/d’ will take you to the dashboard.

4. Use repeating invoices for customers who pay a monthly fee

For businesses with regular sales to particular customers, repeating invoices can be a big timesaver. Let’s say one of your customers pays you a monthly fee. You can set up a repeating invoice template so Xero automatically creates a new invoice each month.

Set how often you want Xero to create the invoice, choose the date of the first invoice and then select when the invoice is due. If it’s the same amount each month, click ‘Approve for Sending’. Then each month, Xero will create the invoice, approve it, and email it to your customer.

5. Add suppliers to contact groups for the method of payment

This is a useful way to use contact groups. If you pay some suppliers by bank transfer and others by direct debit, add them to contact groups for the method of payment.

This lets you search the bills ‘Awaiting Payment’ page by payment type and you can sort, group, or filter the Payable Bills reports to make managing your bills payable and generating bank transfer payments easier.

Got a question about making the most of accounting or bookkeeping in your business? Get in touch with our Xero specialists who will be able to assist you with all your cloud accounting queries on 1300 015 130.

tax time

Complete tasks for your tax period

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EOFY business countdown

As a small business owner, you want to do what you love and managing your accounts might not be what you got into business for.

Use your time wisely to help give you the space to start analysing how your business is tracking and really focus on the growth opportunities available.

Completing financial tasks regularly will give you the ‘creative/thinking space’ to focus not only on marketing and growing your business but also take time away from your business to enjoy a holiday.

Are you registered for GST?

One way to set regular timeframes is if you report GST or Goods and Services Tax to the ATO.

GST is reported via a business activity statement or BAS, monthly, quarterly or annually. Use your GST period as your time frame to work towards.

Check the ATO or speak to your bookkeeper to see if you need to report GST. You can also find the ATO lodgement and payment dates for BAS’s here.

If you don’t have a bookkeeper, see if Notch Above could be suitable for your business.

Not registered for GST?

You can still set regular time frames for your business to work towards and keep yourself accountable.

TIP! A great period to work towards is quarterly, so you can start to compare business performance from one quarter to the next.

Tasks

Complete the following day to day tasks for each time frame

  • Record all sales
  • Record all expenses, such as bills, wages and other business expenses
  • Reconcile your bank accounts regularly
  • Keep business documents stored within the file library in Xero
  • Keep your payroll and superannuation up to date

What should you be doing at the end of each period?

Reports

Reports that help with comparing periods include:

  • The Profit and loss report: to show your income and expenses for current and past periods
  • The Balance sheet: to understand the financial position of your business

Also start to prepare or chat to your bookkeeper about preparing budgets for your business.

If you don’t have a bookkeeper, check out Xero’s Advisor Directory to find one suitable to your business.

Check out our video on cash flow for an in-depth understanding, and how we can help you to track and manage your cash flow more effectively.

Having this knowledge is going to empower you to start making business growth decisions and have more meaningful conversations with your bookkeeper the next time you talk.

Setting yourself up for the new year

Financial year-end is the perfect time to do a check-up, celebrate your successes, and refocus on business goals.

For more Xero tips, advice and bookkeeping essentials for your business, visit How We Help You and get started today with Notch Above Bookkeeping, Australia-wide.

Source: Xero

bookkeeping

EOFY resources for small business

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End of financial year resources for your small business

Get help with tidying up the books and wrapping up the accounts this end of financial year (EOFY).

Dates to mark in your diary

Here are the key EOFY milestones you need to know. Check out Xero’s handy key dates calendar so you can meet your year-end requirements on time.

  • 30 June: The Australian financial year runs from 1 July to 30 June. At midnight on 30 June, the financial year ends and your business books are closed off. Super contributions must be paid to qualify for tax deductions.
  • 14 July: Reconcile your payroll in Xero so you can submit your end-of-year finalisation declaration via Single Touch Payroll (STP) by 14 July. Your employees can then complete their income tax returns.
  • 28 July: Lodge and pay your Q4 business activity statement (BAS). If you lodge online, you may be eligible for a two-week extension. If you have employees, your super and PAYG instalments are also due.
  • 31 Oct: You have until 31 October to submit your tax return, but there are exceptions. Check the ATO website or ask your tax agent.

Processing payroll

Understand how to review, reconcile and amend your payroll, so you can finalise and lodge your Single Touch Payroll (STP) declaration by July 14.

First-timers

If it’s your first time using Xero to complete your end of financial year:

Pros

If you’ve used Xero to complete your end of financial year before:

Closing the books

Familiarise yourself with bank reconciliations, closing off accounts in Xero, EOFY adjustments and more.

First-timers
Pros

Setting yourself up for the new year

Financial year-end is the perfect time to do a check-up, celebrate your successes, and refocus on business goals.

For more Xero tips, advice and bookkeeping essentials for your business, visit How We Help You and get started today with Notch Above Bookkeeping, Australia-wide.

Source: Xero

smokey chimney

Struggling to go green?

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How digital tools can help small business

With the 2021 United Nations Climate Change Conference now behind us, did we make any progress in the small business community?

We all have a role to play and, while small businesses may be facing many challenges on the home front – from Brexit fallout to Covid recovery and more – there are still ways to contribute.

While no single business or organisation has all the answers, what everyone can do is take action by making reductions to their carbon footprint.

Putting your best foot forward

Calculating your carbon footprint – the first key step in tackling the business’ impact on the environment – is often a granular, laborious process.

There isn’t much support for small businesses looking to make a tangible impact on their carbon footprint, while putting sustainable practices in place can be seen as complicated and expensive.

Thankfully, there are digital tools available on the new Xero App Store that enable small businesses to simplify this process.

One of these tools is Spherics – an app that automates the process of carbon accounting, offering a comprehensive snapshot of the environmental impact of a business in minutes. Spherics combines transaction data from Xero with a carbon intensity database to convert pounds spent with a merchant into an estimated Carbon Dioxide equivalent.

What does this mean in practice? For small businesses, the hugely time-consuming, finicky process of capturing every carbon-intensive aspect of their operations is instead carried out – quickly, affordably and with accuracy.

Share your sustainability story

This is just scratching the surface of the work done by a number of Xero’s partners, delivering solutions to help small businesses achieve their sustainability goals.

It’s good to know that businesses can take matters into their own hands and effect genuine change right now.

For more tips, advice and bookkeeping essentials for your business, visit How We Help You and get started today with Notch Above Bookkeeping, Australia-wide.

Source: Xero