Xero Online Accounting Software and the Mining Industry
Updated: Mar 31, 2019
I have worked directly as a financial accountant for various mining and exploration companies for over 10 years, if you are interested in which companies I have worked for check out my linkedIn profile. These have covered various stages of a mines life from exploration, feasibility, mine development, production and care & maintenance.
Most junior explorers when looking for an accounting package they look for something simple, cheap and what most bookkeepers know how to use which is MYOB. Whilst MYOB can do the job of entering invoices, raising payments, payroll and reporting it doesn't make life easy. Reports aren't easily customisable which results in data exported to excel and reports prepared manually which is time consuming. The most important requirement for exploration and mining companies is tenement expenditure reporting to the Department of Mines and as anniversary periods do not run a financial year calendar then in MYOB you need to run two reports and combine them externally in excel. Another problem that I have encountered is that job costing codes can be used to track tenement expenditure but if you also want to track expenditure to various projects then you have to enable and use categories, which only one category can be used per invoice and can mean one invoice has to be entered as multiple invoices if coded to various categories.
Through specialising in cloud based accounting software I have found that Xero is perfect for junior explorers. Reasons for it working so well is:
Allows for your own coding structure to be setup, no set numbering structure. However many digits or characters you want to use.
Expenditure accounts can be classified as either Overheads, Direct Costs and Expenses. This allows for Corporate expense account to be "Overheads" and exploration expense accounts to be "Expenses".
Reports can be customised easily
Annual Tenement Expenditure reports (Form 5) can be generated for the full year from the start of the anniversary to the end
Xero allows for two tracking codes to be set up, allowing for Project and Tenement
One invoice can be entered against various Projects and Tenements
Line items for an invoice need to be entered as a unit, which means that instead of entering as 1, if an invoice is to be split against multiple tenements then it can be done as a percentage without having to work out the amounts manually.
Reporting on tracking codes is easy, and budgets can be entered into Xero against tracking codes which will increase the reporting capabilities.
Xero can grow with your business which MYOB cannot, with an ever evolving array of API partners so that additional software can be integrated with Xero automatically
As the company grows and the number of staff grows, new users can be added to Xero for data entry, reporting or approving of invoices at no extra cost. It can also be accessed from anywhere in the world with an internet connection so even out in the field if need be.
Whether you are wanting to stay with MYOB, make the switch to Xero or setup your new company on Xero, E-Accountant Pty Ltd knows the reporting requirements for Exploration and how important it is to get Tenement Expenditure Reports like Form 5's lodged on time. Contact us for more information as to how we can implement Xero for you.