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Graham's Auto Spares : New Xero users

David Rynne - Friday, March 15, 2013
Three acres of wrecked cars under the flight path of an airport. Graham's Auto Spares in Albury, Southern NSW, is not a pretty or glamorous business. It's tough, dirty work. But it is your typical, family owned small business in Australia.

Graham's Auto Spares was founded 30 years ago by brothers Graham and Peter Smith. It's a simple business: Buy cars that are written-off in accidents, salvage the parts, sell the parts. In conjunction with the wrecking business, Graham's son runs a mechanical workshop on the adjoining premises.

The problems

For the last 10 years, Peter has been using Quickbooks on a desktop computer in the office. What Peter really wanted was the ability to generate invoices directly from the front counter computer and a laptop in the workshop. Previously invoices have been hand written and at month-end, keyed into Quickbooks.

Quickbooks couldn't do this without going to the Premier multi-user version costing $1500 and having it hosted on a server. With the workshop next door on the adjoining property, accessing the server was not practical without laying a cable.

In addition, the workshop was using CashFlow manager for its own accounting. Another accounting package to maintain and pay subscriptions.   

One business using two accounting systems and needing to consolidate the data at BAS time and year end. Not very efficient or cost effective. 

To add to the paperwork burden, Government laws require Graham's to track parts sold from wrecked vehicles. Each vehicle has a prescribed number which is used on invoicing. 

The solutions

I was referred to Grahams Auto Spares via our mutual Technology provider, Coxtech in Albury. Coxtech have been users of Xero and GeoOp for the last two years and have become local evangelists in Albury & Wodonga for everything cloud.

Graham's Autos is just outside the reach of local ADSL coverage. When demonstrating Xero, I discovered that it works ok off a 3G wireless dongle. However we held off on implementation until they were upgraded with a Telstra 4G modem.  

Xero has proven to be the best solution for Graham's Auto Spares. Being cloud based, Xero does not require servers or expensive hardware. The same data can be accessed by an unlimited number of users, thus avoiding the need to upgrade to an expensive multi-user version of Quickbooks. 

The Xero conversion process

The mid-year conversion of the client data from Quickbooks was relatively straightforward. The Xero website has step-by-step guides on how to convert MYOB and Quickbooks sales invoices, bills payable and bank transactions. 

The conversion process requires patience. It took more time than expected and requires close attention to detail. For example, quantities on invoices and credit notes created a few headaches and there was a need to reconcile debtor balances. 

1400 sales invoices later, I would not recommend a mid-year DIY conversion to a new Xero user or someone without accounting or bookkeeping experience.  I chose to do it myself to gain a better understanding of the process and it has actually helped deepen my knowledge of Xero. 

The best time to convert to Xero is at year end, especially for clients with more complex businesses with extensive receivables and payable. However the conversion to Xero can be done at any time and conversion providers can streamline the process.   

The benefits of Xero for Graham's Auto Spares 

March 2013 will be our second full month on Xero and the results are great. We have seen:
  • Manual entry of hand-written invoices is eliminated - saving 4 hours per month.

  • Daily bank feed - bank account reconciled daily. No waiting for statements.

  • Receivables managed more frequently - not after month end. 

  • No need for a server upgrade - saving $2000+

  • Both businesses are working off the same data - no more Accountant's consolidations

  • Tracking of parts sold from each vehicle - meeting Government requirements and creating a mini P&L for each salvage job. 

  • More accurate customer database.

  • Generating reports in Xero is fast. Quickbooks database was much slower.

  • Peter can get help from me over the phone. More efficient for both of us.