Xero Projects; why it’s the best
The shiniest new tool in the toolbox is ‘Xero Projects’. It’s pretty simple, you can now time track your projects in real-time and immediately associate your costings with your service. It tracks billable time making it perfect for small businesses who need to manage their billing process more efficiently. While still in its simplest form, there is huge potential for this built-in feature to reduce the workflow steps required in the professional services industry.
How does it work?
Xero Projects lets you record time and expenses against a project. I have recently started using Xero Projects for a client who builds residential homes. All supplier invoices are sent to ReceiptBank, checked, coded, and published through to Xero, then allocated to the project.
We then use the “custom invoice” feature to raise the progress claims as stages of the build are complete. These progress claims are set on the original contract. All building costs and progress claim amounts have already been determined during the initial design phase.
Why we love it
Simple job cost tracking - We work with loads of trade and construction clients who tender for project work, and without a visual on how the project expenses are stacking up, things can get out of control and bye bye profit.
Job P&L Real time - The Project summary and detailed report are good, but I can see a need for improvement in this area. The addition of a profit/loss figure per project would be a value add.
While this first round of Xero projects was developed with professional services in mind, I have been able to adapt it to the construction industry. Xero Projects provides a simplified job costing solution, we still recommended WorkFlow Max for those clients needing a more detailed view of project management.
Future for Projects?
I would love to see Xero projects have it’s own API, particularly so you could allocate expenses to projects directly from ReceiptBank.
It would be great to add in budgets for different stages of a project, so in my builders example, we could track the stage costs to the contracted progress claim amount.
Better projects P&L reporting, I hope is on the way. The project reports don’t show you the profit or loss on a given project. From a presentation perspective to have the Profit/Loss figure included would be a huge value add.