The Benefits of Dext
Here are the top benefits of Dext:
Managing your costs is probably one the most important things to do as a business owner (other than sales of course!) This blog post will cover the best way to work with your virtual bookkeeper using Dext to help manage your costs.
Getting your source documents sent digitally not only saves money on filing and printing costs, but also time. Having your source documents attached to your transaction in your finance system (in my case Xero), means no more scrabbling around in files trying to find the original document.
What do I mean by source documents? Source documents are the invoices, receipts or bills that your suppliers provide you with as proof of purchase. These contain important information, such as VAT (tax) information, date of the purchase and what has been purchased.
From now on I will refer to these various expense source documents as bills.
Most tax authorities require you to keep your receipts and invoices (bills) for up to ten years (check with your local tax authority to make sure you know what the time period that is required) as proof should you ever have the misfortune of having a tax inspection done.
Historically you had to keep files and files of these documents in your office.
Now with the cloud solutions you can store these electronically. There are a number of ways you can do this, however I will focus on Dext and Xero, as those are the two main applications I use. There are, however many others, so do your research to find the one that works best for you. The principle will be the same no matter what packages you have decided to use.
Receipt Bank, as I mentioned previously, is an app that allows you to extract the key information from your bills, removing the need for manual data entry. Dext can then publish the data to your accounting software, or it can be downloaded as a spreadsheet or used to create expense reports.
Dext has many ways in which you can upload your bills, take a picture using your smart phone or tablet app, scan and upload, email or use drop box to save your documents, dext will then scan the drop box and upload all new documents. In addition, you can opt to post your receipts to dext and they will upload them all for you!
Once the source document is in Dext, you can then see the document, code it to the correct expense, make sure the VAT is correct if applicable and then submit it to Xero (or your preferred finance system). So much quicker than manually keying in the transactions.
This document then gets created as a purchase bill in Xero and the document is attached, so at all times you can click on the document to see the original image.
This is very handy for accountants when they are preparing your final accounts too. No more sending files and having to provide source documents for transactions they may query.
Dext can also be trained, so for example if you always buy your stationery from a certain supplier, you can setup a rule on that supplier in Dext, telling the system, which nominal code it should post to and what VAT rules are applicable and then set it to auto process. Every time you upload a bill from this supplier it will just process straight through to Xero.
This saves so much time as you do not need to manually process these ones through, leaving only the anomalies or new suppliers to be manually coded and checked.
Dext can also be used to process expense claims for employees or directors for items purchased personally using the expense function. So as you can see this is a really powerful tool to enable you to work efficiently and save time.
Dext can also be setup to recognise payment methods. So for example if you paid cash, you can add a payment method called cash and when the bill processes through to Xero, it is automatically paid from petty cash, saving you having to manually apply a payment once it is in Xero.
Similarly, if you paid by your bank card, Dext can be setup to recognise that card ending with whatever the last four digits of your card are, goes as paid to the linked bank account.
This saves so much time for the bookkeeper and therefore costs you less as not so much time is required to do your books!
Once in Xero, the bookkeeper can match the items in the bank that are paid and then provide you with a listing of suppliers that need payment and the relevant payment due dates.
This is so important to help you manage your cash flow, as I mentioned earlier in the section about knowing your numbers.
In summary, your role as the business owner is to get the bills into Dext by any of the methods that works best for you. The bookkeeper can then ensure everything is processed correctly for VAT (if applicable) and to the correct code being able to then provide an accurate and informative profit and loss statement for you.
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