Everything you need to know about Xero Practice Manager
If you want to become an expert running an accounting practice, this book is for you.
Over 900 copies sold worldwide.
Extended Table of Contents
| Introduction | 7 | |
| Foreword | 8 | |
| Chapter 1: Why Xero | 10 | |
| A grim past | 11 | |
| Single ledger | 11 | |
| Ledgers linked to jobs | 12 | |
| Connected apps | 12 | |
| Big-4 level insights available for everybody | 12 | |
| Chapter 2: Industry Billing Models | 14 | |
| Types of billing engagements | 15 | |
| Billable fees | 16 | |
| Quoted fees | 16 | |
| Fixed-price agreements | 16 | |
| Method 1: In-advanced | 17 | |
| Method 2: Contract-period | 18 |
| Method 3: In-period | 19 | |
| Selecting a method | 21 | |
| Chapter 3: Revenue Streams | 22 | |
| Services | 23 | |
| Revenue steams | 23 | |
| Compliance | 23 | |
| Advisory | 24 | |
| Chapter 4: Practice Settings | 26 | |
| Practice settings | 27 | |
| Task vs staff billable rates | 27 | |
| Allocation | 28 | |
| Cost admin | 28 | |
| Time | 28 | |
| Ordering | 29 | |
| Staff settings | 30 | |
| Base rates | 30 | |
| Overhead apportionment | 30 | |
| Best of both worlds | 31 | |
| Billable rates | 32 | |
| Considerations for billable rates | 32 | |
| Task settings | 34 | |
| Keep it simple | 34 | |
| Sub-tasks in XPM | 34 | |
| Secret cause | 35 | |
| Must-have tasks | 35 | |
| Must-not tasks | 35 | |
| Task-based reporting | 37 | |
| Job costs | 38 | |
| Client settings | 38 | |
| Clients vs client groups | 38 | |
| Setting up client groups | 39 | |
| Client vs contacts | 39 | |
| Business structures | 39 | |
| Client types | 40 | |
| Tax agent | 40 | |
| Job settings | 40 | |
| Job categories | 40 | |
| Filtering your WIP balance | 40 | |
| Revenue streams | 41 | |
| Job states | 43 | |
| Job templates | 45 | |
| Xero integration settings | 45 | |
| Income and cost of sale accounts | 45 | |
| Clients, suppliers and contact person | 46 | |
| Invoices | 46 | |
| Invoice details: Invoice format | 46 | |
| Option A: Job or miscellaneous invoice total | 46 | |
| Option B: Individual tasks and costs | 47 | |
| Option C: Time sheet notes | 48 | |
| Which option is best? | 48 | |
| Invoice payments | 48 | |
| Purchase receipts | 49 | |
| KPI/WIP reporting | 49 | |
| Custom templates: Document designs | 49 | |
| Where invoices are sent from | 50 | |
| Invoice designs | 50 | |
| Quote designs | 50 | |
| Tax letters | 51 | |
| Invoice statements | 51 | |
| Purchase orders | 51 | |
| Chapter 5: Integrations | 52 | |
| Xero + XPM | 54 | |
| Clients and suppliers | 54 | |
| Purchase orders | 55 | |
| Invoices | 55 | |
| Practice Ignition + XPM | 55 | |
| Link Reporting + XPM | 56 | |
| Chapter 6: Creating Engagements | 57 | |
| What is an engagement? | 58 | |
| Advice on engagements | 58 | |
| Chapter 7: Setting up Engagements | 61 | |
| General guidelines for setting up engagements | 62 | |
| Overview of jobs | 62 | |
| Types of annual engagements | 63 | |
| Selecting the client | 64 | |
| Start dates and durations of jobs | 64 | |
| Signing up new clients to fixed-price agreements | 65 | |
| In-period tasks for fixed-price agreements | 66 | |
| Job budgets | 67 | |
| Allocating job managers | 67 | |
| General questions from clients | 67 | |
| Option 1: New job | 68 | |
| Option 2: General queries task | 68 | |
| Option 3: General queries job | 68 | |
| Internal jobs | 68 | |
| Setting up engagements in XPM | 70 | |
| Job templates | 70 | |
| Xero subscriptions of job templates | 71 | |
| Setting up time-charge agreements | 72 | |
| Setting up fixed-price agreements | 73 | |
| Summary | 74 | |
| Setting up engagements in Practice Ignition | 74 | |
| Benefits of using Practice Ignition | 74 | |
| How to set up Practice Ignition | 75 | |
| General settings in Practice Ignition | 75 | |
| Creating your engagement letter terms | 76 | |
| Adding payment services to Practice Ignition | 77 | |
| Linking staff members in Practice Ignition | 77 | |
| Setting up integrations with Practice Ignition | 77 | |
| Setting up services in Practice Ignition | 78 | |
| Creating proposals for annual engagements | 80 | |
| Creating proposals for one-off engagements | 82 | |
| How to roll out Practice Ignition for your practice | 82 | |
| Summary | 83 | |
| Chapter 8: Project Management | 84 | |
| Setting up jobs | 85 | |
| Job budgets | 85 | |
| Estimated times | 86 | |
| Job managers | 87 | |
| Managing jobs | 87 | |
| Job set-up process templates | 87 | |
| Time sheet methods, frequency and importance | 87 | |
| Reviewing time sheet completion | 91 | |
| Updating job states | 92 | |
| Internal time | 93 | |
| Travel time | 94 | |
| Identifying non-billable time sheets | 94 | |
| Job and task notifications | 95 | |
| Managing your job list | 95 | |
| 1. Jobs I'm managing | 95 | |
| 2. Jobs in progress custom report | 96 | |
| 3. Open job report | 96 | |
| Job close-out | 97 | |
| Mark tasks as completed | 97 | |
| Costs are marked as actuals | 97 | |
| All invoices are captured | 97 | |
| WIP wash-up | 98 | |
| Change job state to completed | 98 | |
| Chapter 9: Outsourcing and Disbursements | 99 | |
| Outsourcing vs subcontracting | 100 | |
| Outsourced services | 100 | |
| Estimating outsourced service provider fees | 101 | |
| Estimating outsourced costs | 103 | |
| Capturing outsourced service provider fees | 104 | |
| Subcontracted services | 104 | |
| Adding subcontractors to your XPM | 105 | |
| Outsourcing decision tree | 105 | |
| Managing Xero subscriptions | 106 | |
| Managing the Xero accounts payable | 107 | |
| Managing customer repeating invoices | 108 | |
| Managing actual subscription costs | 108 | |
| Managing disbursements | 109 | |
| Staff reimbursement of expenses | 110 | |
| Chapter 10: Invoicing | 111 | |
| Time-charge agreements | 112 | |
| Invoice sync with Xero | 113 | |
| Option A: Job or miscellaneous invoice total | 113 | |
| Option B: Individual tasks and costs | 114 | |
| Option C: Time sheet notes | 114 | |
| Which option is best? | 114 | |
| Invoicing in XPM | 115 | |
| Progress invoice | 115 | |
| Final invoice | 116 | |
| Remove from invoice list | 116 | |
| Methods of invoicing | 117 | |
| Time and cost invoices (with write-offs to be applied to specific time sheets) | 117 | |
| Time and cost invoices (with write-offs to be apportioned across all time sheets) | 117 | |
| Quoted invoices (with write-offs to be applied to specific time sheets) | 118 | |
| Quoted invoices (with write-offs to be apportioned across all time sheets) | 119 | |
| Fixed-price agreements | 120 | |
| Understanding the invoice sync with XPM | 120 | |
| Setting up the invoice sync with XPM | 120 | |
| What if invoices have not synced correctly? | 121 | |
| Practice Ignition | 123 | |
| Quoted work in Practice Ignition | 123 | |
| Fixed-price agreements in Practice Ignition | 124 | |
| Chapter 11: Rolling Over Jobs | 126 | |
| Renewing engagements with XPM | 127 | |
| Using the client order number | 128 | |
| Using the job number | 129 | |
| Renewing engagements with Practice Ignition | 129 | |
| Re-engaging clients | 130 | |
| Job rollover | 130 | |
| Chapter 12: Scheduling and Capacity | 132 | |
| Custom reports for scheduling | 133 | |
| Job task estimated times | 134 | |
| Standard tasks | 134 | |
| Variable tasks | 134 | |
| Adding estimates times to job templates | 136 | |
| Creating your scheduling reports | 137 | |
| Scheduling report | 137 | |
| Monthly capacity report | 139 | |
| Staff workflow report | 140 | |
| Capacity vs productivity | 141 | |
| Your scheduling process | 142 | |
| Chapter 13: Management Reporting for your Practice | 143 | |
| Types of reporting | 144 | |
| Job reporting | 145 | |
| Client reporting | 146 | |
| Team reporting | 146 | |
| Practice reporting | 146 | |
| Job reporting | 146 | |
| Remaining time | 147 | |
| Remaining budget | 148 | |
| Projected write-offs | 149 | |
| Days till due | 150 | |
| Client reporting | 151 | |
| Client profit | 152 | |
| Client write-offs | 155 | |
| Average hourly rate | 156 | |
| Client performance | 156 | |
| Team reporting | 157 | |
| Productivity | 158 | |
| Staff write-offs | 160 | |
| Invoiced by staff | 163 | |
| Staff profitability (ROI) | 164 | |
| Average hourly rate | 165 | |
| Practice reporting | 167 | |
| Measuring WIP | 167 | |
| Billable WIP | 168 | |
| Negative WIP | 174 | |
| Practice productivity | 176 | |
| Practice write-offs | 179 | |
| Practice average hourly rate | 184 | |
| Revenue stream breakdown | 187 | |
| Improving practice performance example | 190 | |
| Practice reporting rhythms | 193 | |
| Weekly | 194 | |
| Open Jobs | 194 | |
| WIP Movements | 195 | |
| Individual Performance | 195 | |
| Monthly | 196 | |
| WIP Performance | 196 | |
| WIP Movements | 196 | |
| Practice Performance | 197 | |
| Service Profitability | 197 | |
| Team Performance | 197 | |
| Client Profitability | 198 | |
| Biannually | 199 | |
| Individual Performance | 199 | |
| Chapter 14: Common Issues and their Solutions | 202 | |
| Timesheets have not been entered | 203 | |
| Background of this issue | 203 | |
| How to resolve this issue | 203 | |
| Timeframe to implement this solution | 203 | |
| Timesheets and invoices in seperate jobs | 203 | |
| Background of this issue | 203 | |
| How to resolve this issue | 204 | |
| Timeframe to implement this solution | 204 | |
| Individual jobs have been set up for each task | 204 | |
| Background of this issue | 204 | |
| How to resolve this issue | 205 | |
| Timeframe to implement this solution | 205 | |
| Job categories do not reflect engagement types | 205 | |
| Background of this issue | 205 | |
| How to resolve this issue | 206 | |
| Timeframe to implement this solution | 206 | |
| Invoices for fixed-price agreements are not flowing back to XPM | 206 | |
| Background of this issue | 206 | |
| How to resolve this issue | 206 | |
| Timeframe to implement this solution | 207 | |
| Base rates are not loaded | 207 | |
| Background of this issue | 207 | |
| How to resolve this issue | 207 | |
| Timeframe to implement this solution | 207 | |
| WIP against internal jobs | 207 | |
| Background of this issue | 207 | |
| How to resolve this issue | 208 | |
| Timeframe to implement this solution | 208 | |
| WIP against completed jobs | 208 | |
| Background of this issue | 208 | |
| How to resolve this issue | 208 | |
| Timeframe to implement this solution | 209 | |
| Estimated times not entered against tasks | 209 | |
| Background of this issue | 209 | |
| How to resolve this issue | 209 | |
| Timeframe to implement this solution | 209 | |
| Budgets not loaded against jobs | 209 | |
| Background of this issue | 209 | |
| How to resolve this issue | 210 | |
| Timeframe to implement this solution | 210 | |
| Disbursements not loaded against jobs | 210 | |
| Background of this issue | 210 | |
| How to resolve this issue | 210 | |
| Timeframe to implement this solution | 210 | |
| Jobs are not being closed | 211 | |
| Background of this issue | 211 | |
| How to resolve this issue | 211 | |
| Timeframe to implement this solution | 211 | |
| Xero repeating invoices not linked | 212 | |
| Background of this issue | 212 | |
| How to resolve this issue | 212 | |
| Timeframe to implement this solution | 212 | |
| Duplicate contacts between XPM and Xero (blue) | 212 | |
| Background of this issue | 212 | |
| How to resolve this issue | 212 | |
| Timeframe to implement this solution | 213 | |
| Reconciling XPM accounts receivable | 213 | |
| Background of this issue | 213 | |
| How to resolve this issue | 213 | |
| Timeframe to implement this solution | 213 | |
| If I edit an invoice value in Xero, will it update in XPM? | 213 | |
| Background of this issue | 213 | |
| How to resolve this issue | 213 | |
| Timeframe to implement this solution | 213 | |
| Xero invoices are not arriving in XPM | 214 | |
| Background of this issue | 214 | |
| How to resolve this issue | 214 | |
| Timeframe to implement this solution | 216 | |
| Practice Ignition not deploying invoices to Xero | 216 | |
| Background of this issue | 216 | |
| How to resolve this issue | 216 | |
| Timeframe to implement this solution | 216 | |
| Practice Ignition not deploying jobs to XPM | 216 | |
| Background of this issue | 216 | |
| How to resolve this issue | 217 | |
| Timeframe to implement this solution | 217 | |
| Xero creating an adhoc job in XPM | 217 | |
| Background of this issue | 217 | |
| How to resolve this issue | 218 | |
| Timeframe to implement this solution | 218 | |
| The Linked Practice | 219 | |
| Glossary | 220 | |
| Acknowledgements | 221 |