October 18, 2017

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Job Management in Xero

October 18, 2017


Xero is without doubt a game changer in cloud accounting software. If you want to know why then check out our article on why you need to be using Xero.


However, there are some businesses where Xero may not be as much of the 'silver bullet' as it was made out to be. One such example of this is for organisations where the core of their operations is to profitably manage jobs. One such industry is Construction where owners rarely have time to spend hours tracking & managing projects. The purpose of this article is to investigate what options are available to businesses working with Xero, as well as the advantages and disadvantages of each.


Xero Tracking Categories

Don't get confused by the fancy name, tracking categories are just profit centres. In the simplest of terms, a tracking category is a flag that can be applied to revenue & expense items to allow for reports to be run based on it. By setting up a tracking category called 'Jobs' allows income & expenses to be allocated to it. This works well with popular process automation tools like Receipt Bank and also integrates well with reporting tools like Power BI. It is however predominately a reporting function and as a result probably doesn't replace other systems that manage other elements of a project. 



  • Free - Xero tracking categories are available in all Xero business packages

  • Good Integration With Xer- Most add-on apps also integrate with your tracking catgeories so that you can easily allocate time & costs to jobs


  • Limited Functionality - As mentioned above, tracking categories are simply a reporting feature so this probably doesn't address all elements of how a job is managed. 

    Xero Projects

    In September, Xero announced a new feature it was launching called Xero Projects. While we don't have all the details about how far this feature will extend, it was designed to address some of the limitations discussed above. Xero Projects is a stand-alone module and allow for invoices to be created, job budgets to be set up and job profitability reports to be run. Currently this feature is only available to Xero Partners however will be launched to the public in the coming months.



    • Better Integration - It is difficult to know exactly how advanced this integration will be yet but given it is built into Xero you would expect that it would work seamlesslywith areas like Invoicing, Purchasing & Payroll. 



    • Limited Features - Based on my testing of the Projects module, I can see it working on only very basic projects. The functionality doesn't allow for complexities in how clients are invoices and also require significant additional manual work to be perform (eg. for every individual cost you need to add a mark-up % instead of setting a default one across the job). I will write another blog article on this when Xero Projects is launched to the public

    • Cost - The Xero Projects feature will launch initially as a free trial but will eventually cost $7-10 per user per month. This many not sound like a lot but will quickly add up in a larger company with multiple users & employees

    Add-on Apps

    There are a number of add-on applications that integrate with Xero to provide project management and job tracking capabilities. Essentially these applications handle all aspects of a project, from supplier purchasing to customer invoicing. In my experience the marketing of these apps is better than the actual functionality. The biggest gaps are in how these apps integrate with Xero payroll & expenses, which is essentially the total costs on a project. 


    That being said, a couple of applications that I have had experience with in the past are Workflow Max & Tradify. These apps do an OK job but still require manual work-arounds to manage the integration with Xero. 



    • Greatest Functionality - Even with their shortfalls these applications allow for the most functionality in terms of managing jobs. From lead generation , quoting and customer invoicing, most elements of a job can be managed within it.


    • Cost - These job management add-ons can be expenses. Most of the range between $150-250 per month or 2-3 times the cost of your accounting software.


    The launch of the Xero Projects module recently is acknowledgement from Xero that its core offering doesn't work for all job based businesses. While it is a step in the right direction it isn't the silver bullet that it seemed like it may be and while develop slowly over the coming months/ years. While some external businesses have tried to also address this gap, I also feel like they also haven't addressed the key elements that are required to manage jobs. Their integration with Xero also leaves a lot to be desired and requires too much double handling


    In my opinion the best solution is to use the Xero tracking categories to track all incomes & expenses for jobs. Until Xero or an external application can address the gaps discussed above it is still the best return on a businesses investment. 


    At Upside we have significant experience making all the options above work for job based businesses. If you would like to have an obligation free discussion of how it could apply to your business, contact us on (08) 7129 4450 or info@upsidebusinessgroup.com.au.










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