Let’s face it, we are all looking for ways to save time and energy on the admin jobs we don’t enjoy. For small business owners, that likely includes your bookkeeping or accounting admin. Automating invoicing and expense tracking is a sure way to save time, improve cash flow, limit mistakes, and get paid on time.
It makes sense to automate these processes, and with the right tools and setup, it’s an easy way to reduce the stress that comes with manual bookkeeping. In this step-by-step guide, I explain how and why to automate invoices and expenses for your small business.
Why automate your invoicing & expense tracking?
Manual invoicing and expense tracking can lead to human error, resulting in late payments, inaccurate financial records, and missed tax deductions. Automating these processes means using software to automatically create, send, and track invoices, and record, categorise, and monitor your business expenses without doing it all manually. By automating these processes, you can:
Get paid faster
Make fewer mistakes
Save time
Stay professional
Keep better records and
Stay compliant with GST and tax
Tools like Xero make it easy by allowing you to set up invoicing templates, automate reminders, create convenient payment options, and categorise and record expenses. The first thing to do when setting up your automation process is to select the right software for your business.
Which accounting software is best for your business?
Popular options in New Zealand include Xero, MYOB, and QuickBooks, all of which support:
Automated invoicing
Bank feed integrations
Expense tracking
GST reporting for businesses
I will focus on Xero in this article, because it is widely used in New Zealand, but MYOB and QuickBooks are also commonly used.
Choosing the Right Accounting
Software
1. Xero
Xero is very popular in New Zealand because of its cloud-based invoicing options and automated reminders. It offers customisable templates, recurring invoicing options, and online payment. Plus, it’s easy to connect your bank feeds and set up auto-reconciliation to reduce manual work. Xero provides an app and integrates with hundreds of third-party tools for payments.
2. MYOB
MYOB is another popular option in New Zealand. It’s widely used for accounting, GST compliance, payroll, and invoicing. It offers a comprehensive set of features but is often the better choice for larger teams because of its unlimited payroll capabilities. MYOB’s automation works well, but is sometimes reviewed as less intuitive than Xero’s workflow.
3. QuickBooks
QuickBooks provides comprehensive features like time tracking, expense categorisation, and invoicing. The platform is highly customisable, offers phone support, a mobile app, and integrates with many third-party apps such as Salesforce.
Some of the highlights of using accounting software are:
Customisable invoices
Recurring billing
Automating overdue reminders
Easy mobile invoice creation and receipt capture
Integration with payment apps
Clients can pay directly from an invoice
Categorising expenses for accurate reporting
Automatic bank transaction import and reconciliation
Time tracking projects or client-specific expenses
Generate expense and profit reports for better decision-making
How to automate invoicing
Automating your invoicing helps small businesses get paid faster and more consistently. Best practices include creating branded invoice templates, setting up recurring invoices for regular clients, and enabling automatic payment reminders.
Below is a step-by-step process for setting up automated invoicing on Xero.
Go to your Xero dashboard.
Click on ‘Sales’ in your menu options.
Navigate to your ‘invoices’ tab.
Create a new invoice or select an existing invoice.
Click on the three dots (...) menu on the top right and choose the ‘Repeat’ option.
You’ll be redirected to a page that will allow you to choose how frequently you want this invoice to repeat (i.e., Weekly, monthly).
Select an accurate due date.
Input a client’s email address.
Click ‘Save’ and review, before clicking ‘Done.’
That’s it! If you have clients, you regularly service each month, this is a great way to save time and reduce billing errors. It’s also an easy way to ensure prepayment of services, and make it easier to manage operating costs, allocate time and staff, and improve cash flow and financial security.
Setting Up Late Payment Reminders in Xero
If your customer is late with their payment, Xero can be configured to automatically remind them that their payment is overdue. To set this up:
Navigate to the Sales menu and Invoices.
Click ‘Invoice Reminders’ and set ‘Email customers when invoice is’ and customise the settings for the number of days before or after the due date.
Save your settings to activate reminders.
Xero will then automatically send out reminders to customers who fall behind in their payments and help you get paid on time.
Why Automate Your Expense Tracking
Expense tracking removes the need for spreadsheets and manual data entry. Once your bank feeds are connected, transactions are imported automatically, and expenses can be coded and matched to invoices. Most accounting software also allows digital receipt capture, making it easy to track expenses for GST and tax purposes in New Zealand. Benefits of automating expense tracking:
Ensure GST and tax compliance
Calculate GST and tax correctly on income and expenses
File returns efficiently with the IRD
Easily generate reports for better business insights
Reduce errors and keep accurate records
Set up templates for recurring expenses
Expense tracking works best when your bank accounts are linked, and expenses are categorised. It saves time, reduces mistakes, and ensures your business stays compliant.
If you’re ready to simplify your small business accounting with automation, I can help. Book a free discovery meeting or give me a call to see how we can streamline your processes.
