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An introduction to cash flow tools for your clients

It’s no secret that healthy cash flow can make or break a business, regardless of size or industry. Without it, even the most promising ideas or firms will fail. Yet, it’s an area in which many businesses still need help. Research conducted by Xero shows that, on a month-to-month basis, barely half of small businesses are cash flow positive.

As an accountant, you’re in a great position to help your clients improve the health of their cash flow while developing your advisory services.

These five tools can help you and your clients succeed.

1. Monitor key financial metrics with cash flow forecasting

Healthy cash flow is one of the most important indicators of business health, with more than half of all small businesses failing within the first five years of operation. Cash flow forecasting helps you and your clients understand business performance and its impact on the ability to reach goals.

Xero is currently piloting a short-term cash flow tool, giving small businesses a 30-day view of the operational health within the platform. The new tool will provide a forecast of a business’ cash flow, including the impact of existing bills and invoices. You can use the tool to understand your clients’ immediate business needs and work with them to recommend solutions or uses for cash surplus, and have deeper conversations to help improve their financial literacy.

Additionally there are many apps in Xero’s ecosystem such as Fluidity and Spotlight that have different additional functionality to help clients manage the cash coming in, going out and everything in between.

2. Collect payments quicker with GoCardless

Digital payment services can help your clients run a more efficient accounts receivable process and get paid faster. GoCardless makes collecting payments by Direct Debit easy and efficient for both you and your clients. Ryan Percy, director of firm Scrutton Bland, says, “Referring clients to GoCardless adds extra value to the service we provide and offers them real benefits in terms of efficiency, cost-saving and cash flow.”

This app allows your clients to easily set up a Direct Debit mandate for one-off, recurring or instalment payments, so they’re paid on time. After that, future payments are collected automatically – reducing the time they spend on admin. There is a 1% cost cap per transaction but no setup costs or hidden fees. Direct Debit is recommended for transactions below £5,000.

3. Spend less time on data entry with Hubdoc

When entering data manually, it takes up a lot of time. No matter how fast you can type or process information, it’ll never be as fast as it needs to be. This precious time could be utilised helping your clients grow their business.


Hubdoc is a ‘data capture’ solution that enables seamless bill and receipt collection. It extracts key data from documents, syncing the information to Xero as accurately coded transactions with source documents attached. Once Xero has access to the data provided by Hubdoc, it uses bank rules and other features to automate bill payments and bank reconciliation. The feature will be available within Xero Starter, Standard and Premium packages for no additional fee in March 2020.

4. Pay bills seamlessly using Xero Pay with Transferwise

Not only getting paid, but paying bills is crucial to better cash flow management for you and your clients. Xero recently announced a new easier way for small businesses in the UK to pay and reconcile their bills on the platform with Xero Pay with TransferWise. The domestic bill payment solution from TransferWise is a standardised way for small businesses to pay bills, regardless of who they bank with.

Customers can pay multiple bills through the Xero platform with just a few clicks. It also eradicates having to deal with batch payments exports. Features include being able to see alerts about potential payment errors before they occur, view the status of payments, and automatically reconcile transactions in a single statement line – allowing for one-click reconciliation of all payments. Additionally, once payment has been made, business owners can easily provide remittance to suppliers and see a real-time picture of their payments to understand the impact on their cash flow.

5. Simplify expenses with Xero Expenses

Some of your clients already wear multiple hats and staying on top of their business expenses can fall down the priority list. Xero Expenses allows them to scan their receipts and submit expense claims on the spot, eliminating the need for data entry and reducing errors.

“We have clients now using Xero Expenses and it’s working really well for them,” says Sam Rollins, partner at Trinity Accountants firm. “It’s definitely reduced the number of mistakes clients are making which, from an internal perspective, saves us loads of time.”

This app also speeds up the reimbursement process and gives your clients complete, real-time visibility over their expenses to help them plan ahead and better manage cash flow.

Additionally, a new automation feature in Xero Expenses allows your clients to quickly eradicate the long backlog of fuel receipts and retroactive mileage claims. Employees simply need to input their distance travelled to the Xero Expenses app or online. The claim value will be automatically calculated based on the rate per mile or kilometre offered by the employer. No receipts or complicated maths needed.

The choice of apps that work best for you and your clients will depend on the features and value you want to deliver. Find out more about how to choose the right apps for your firm and clients with Xero’s new cash flow app advisory playbook.

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