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Is it Safe to Add Users to Xero?

January 18, 2017

 

Xero is a cloud based accounting solution for SMB's (small and medium businesses) that has robust features, yet is easy to use. It's mobile application allows you to manage your business from anywhere. There are over 500 add-on apps that can help streamline your business and improve your processes with Xero. 

 

One of the best features that is often taken for granted or overlooked is the ability to add users. Xero lets you add an unlimited number of users regardless of the plan you are on.  The user roles offer a wide variety of accessibility and permission options to restrict or allow various functions in your Xero file.

 

User Roles

 

Standard - the Standard user role has almost full access to Xero, with optional restrictions to cash coding and publishing reports.

 

Advisor - Advisors have full control over Xero with the same access as a Standard user, but with extra permissions such as ability to lock periods and publish report.

 

Read Only - these users have access to view things in Xero but can't edit or add information.

 

Invoice Only - the Invoice Only user is limited and good for someone who needs to enter invoices and bills, but does not have access to bank accounts or reports. There are 4 levels of access for this level,  allowing for even greater control on what they can do.

 

Payroll Employee - this user role allows employees to view their own payroll information, submit timesheets and request time off.  They have no access to the rest of your Xero company.

 

Xero Subscriber - only the subscriber can update billing information and payment details.

 

Who should you add as a user?

 

Accountant - save on billable time from your accountant by sharing your Xero file with them.  This is not only helpful for tax preparation, but for corrections and planning throughout the year.  Set them up as Advisors.

 

Bookkeeper - depending on what your bookkeeper does, you can have them be a Standard or Invoice Only user.  See below for other fraud prevention measures you should take if you have a bookkeeper.

 

Board Members - the Read Only role is perfect for those board members who want to be able to see things, but you don't want them to touch things.

 

Employees - Xero Standard and Premium not only comes with payroll processing, but your employees can log in to their own portal so they don't have to ask you or your human resource personnel about their checks, vacation or sick time.

 

Partners - a partner can be set up as an Advisor or as a Read Only user, depending on how much you want them to be able to do in your Xero file.

 

Payroll processor - if you have a third part processor, you can assign them the Payroll Employee role, but also give them permission to administer payroll for your company.

 

 

With others accessing my accounting program, how do I prevent fraud?

 

Sad to say, most cases of bookkeeping fraud happen with trusted long term employees and 87% are first-time offenders with clean employment histories*.

 

Don't let this discourage you from adding users to your Xero account however!  There are precautions you can take:

 

  • Separate financial duties and responsibilities if possible

  • Be aware of any changes in your bookkeepers attitude

  • Let your employees know they are appreciated

  • Do not give bookkeepers authority to write checks without some sort of review or approval process (Xero permissions can do this for you)

  • Run a missing check report at least once a year

  • Make sure incoming payments are matched with invoices

  • Make sure all out-going money has proper documentation (bills, receipts, purchase orders)

  • Monitor your online banking account

  • Create notifications from your bank and credit card vendors to email you when transactions exceed a certain dollar amount

  • Put limits on purchases, with dual approval needed for large expenditures

  • Beware of any "cash" transactions - account for all cash spent and document anything paid for with cash

  • Reconcile petty cash like you would a bank account

  • Have written procedures for employee reimbursements and enforce a strict 30-day submission policy

  • Consider using a prepaid expense card for employees who travel or make office purchases

  • Keep your books up-to-date

  • Review your Profit & Loss and Balance Sheet statements monthly and understand where your money is going

  • Secure access to your bookkeeping software

  • Question anything unusual

 

Finally, have an outside person (such as myself or another professional firm) reconcile your bank and credit card accounts and review your monthly financial statements.

 

 

To learn more about user roles in Xero, watch this video:  https://vimeo.com/57021915

 

* - http://quickbooks.intuit.com/r/trends-stats/fraud-statistics-every-business-should-know/

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