I realize that the subject matter for my posts can vary pretty widely which may be good for some people and maddening for others. It reflects the reality of my efforts to balance numerous priorities. Just as important, 35 years in practice is a long time which has allowed me to acquire a wide range of experience. My hope is that by sharing the thought process, I may be able to effectuate a level of knowledge and experience transfer.
We became a Silver Partner last week and were given access to the Xero Practice Studio and Work papers. We are already WorkflowMAX Advisors and Practice Ignition Partners, so I am already proficient with the Practice Studio We will certainly use the platform for a substantial number of clients, but we aren’t going to use it ourselves. It struck me as sat down to invoice and pay bills just how my perception of Xero is vast different from a typical small business in just about every imaginable way. I thought it might be interesting to describe our process just to see if I can pinpoint the differences. The existence of that difference was glaringly apparent to me when I was working through the Xero Certification exam.
Our Operating Cycle
- We maintain our primary operating account with Chase on their Enhanced Security Platform which requires IP Security [access to online banking only work on pre-designated IP addresses], have dual control [which means that a second approver is required for every disbursement we make other than using a credit or debit card], and an RSA Token is required to initiate wires, ACH and tax payment. We don’t even have paper check stock printed, so there is no way to give anyone a paper check ever. We have a second operating account at Citibank. The operating account, and our client funds accounts are on the CitiBusiness platform that requires a second approver for bill payment and transfers, and a special token for ACH and wires. It just struck me that means that we will never be able to use the feature in Xero to initiate a payment from an expense, nor will it make sense to use the enter bills or bill payment features in Xero, and it can’t accommodate the second approver and tokens of our treasury platforms.
- The invoicing process is such, that invoices for recurring work will be generated out of Practice Ignition that will cause them to be imported into Xero through an existing integration. I went back and looked at 2014 and we collected on approximately 1,300 invoices approximately 35% of the invoices which represented around 60% of our collections came in my wire transfer and ACH, 60% were paid by credit or debit card [which includes about 5% that came through PayPal]. The remaining 5% came in a variety of forms, a portion was cash, and the surprisingly we only received eight paper checks in payment of our invoices the entire year. I am not surprised in one sense, as we actively discouraged check payments for a very long time, and actually require electronic payment for anything over $5K. Finally, we use Chase Paymentech as our credit card processor and at the moment, it isn’t compatible with Xero.
- We use Expensify for employee expense reimbursement and where reimbursable expense are incurred by employees, we reimburse through Expensify and push the charges out through bill.com
- Where we manage A/R and A/P for clients, we use bill.com’s platform which substantially more robust than the processing platforms in either Xero or QBOnline. The audit trail, processing workflows and approval processes are very highly structured with good controls. Its interesting, that in the course of putting this blog post together, it has become absolutely clear to me that the way to migrate the process is to put our internal A/R and A/P on bill.com.
Well, this post took a direction that I wasn’t expecting when I started to write it, but it has actually been both a learning experience and given me very much renewed appreciation for what bill.com is designed to do as a result of thinking about what we have been doing, and then looking to see how they have the workflow for the process laid out. Once again, I am convinced that they are the experts.
Since most of you know how intense my focus on particular issues tends to be, and short the span lasts, I am declaring next week at aBIZinaBOX to be “How would bill.com help your back office week'” and am going talk to my people tomorrow. The goal being to see if we can identify a half dozen clients that we can onboard to bill.com before Labor Day as that will provide critical mass to get a processing operation up and running. So this weekend is going to be a long discussion with my partner in the offshore processing operation.
Shameless plug – aBIZinaBOX as certified on bill.com as a firm, and I am certified with both Expert and Guru ratings.