We hope you enjoyed our Cash flow insights with Xero episode at Xero On Air. In the episode, we discussed how our short-term cash flow and business snapshot features have helped small businesses manage their cash flow during COVID-19, and the future of insights at Xero. We also revealed our new profitability dashboard in Xero Projects.
Understanding whether your projects are profitable can have a big impact on your cash flow. Even if customers pay on time, you still need to consider whether the amount you invoice covers the time and expenses associated with that job. If you’re like many businesses, you probably spend a lot of time fiddling around with reports and spreadsheets to work out whether you’re making a profit.
Our new dashboard in Xero Projects gives you at-a-glance views of your profitability on each job in real time. You can clearly see all invoiced work and the status of each invoice, as well as any costs associated with that project, such as time or materials. You can also see how you’re tracking against your estimate and whether you need to invoice any remaining costs.
Real time data on each job
Having all the key metrics in one dashboard means you can quickly see which projects are doing well and which ones have a low profit margin. Maybe you need to look at how much time you’re spending on that project, or send the next progress invoice. Over time, you’ll start to understand where you can improve your profit margins and which clients are most valuable to your business.
The profitability dashboard is also useful for accountants and bookkeepers, who can see how their clients’ projects are tracking in real time. Instead of spending time chasing financial information, they can proactively work with clients to address any cash flow issues before they impact the overall business.
More accurate estimates
The profitability dashboard is particularly useful if you’re in an industry where you charge for your time and provide estimates before starting a job, such as trade, consulting and service-based businesses. Once you understand the time and costs that go into a project, you can adjust your pricing and estimates on future jobs to maximise profitability.
You can refer to past projects that are similar in nature, or simply use the ‘copy project’ feature to create a new project with the same task and expense estimates. This will help you set pricing based on how profitable you want to be, rather than what your competitors charge. Pricing is one of the hardest things to get right in business, so having accurate and up-to-date data can make a big difference.
Get started with Xero Projects
The new profitability dashboard in Xero Projects is free to trial for one month, or available in the Xero demo company. If you’re an accountant or bookkeeper, you can download our partner toolkit that will help you make the most of Xero Projects in your practice. Don’t forget, you can earn partner points for using Xero Projects to reach the next status level faster.