When considering how to build out your agency's finance function, there are so many options to consider and so many different functions that you need to think about.

In this blog, I hope to simplify what your finance function needs, as well as point out some of the specific software options I, and my clients who are just like you, use.

The Core Product

At the centre of your finance function is your core product. This is where all of your financial data will be stored, where all the inputs are received, and where all the outputs are generated.

For me, Xero is the one to go for here - especially for agencies like you.

It does the basics incredible well.

It’s beautifully designed.

It’s more advanced features like Foreign Currency work without you even needing to think about it. For me, this is where Xero dominates its competitors at the moment.

Bank Feeds

If you’re using Xero, and you don’t have your bank feed set up, you’re not using Xero - you’re using a glorified spreadsheet.

A bank feed brings in each and every transaction from your company bank account into Xero’s Bank Reconciliation screen. You then use this data to allocate those transactions against invoices or bills on the system, or creating new transactions where needed.

This means that you really want to make sure you’re using a company only bank account, and you’re minimising your personal expenditure (ideally to zero) from this bank account - no-one in your business, or mine, wants to know about what you buy at 2am on a Sunday after a beer too many.

Pre-Accounting Software

For your Core Product, Xero in our case moving forwards, to work well you need to ensure that accurate and timely information is being inputted into it. You can spend your evenings entering data into the system if you want, but you won’t be making the best use of the tools you’ve got available to you.

There are two areas of pre-accounting software in my mind - receipt capture and invoice capture:

Receipt Capture

Concentrating mainly on your purchases, a receipt capture tool collects and collates your purchase invoices (also called Bills) and your receipts and uses the latest tech to automatically read, categorise and process these into Xero.

We predominantly use Dext for our clients.

Once set up, Dext takes the heavy lifting out of your receipt capture, leaving you to only deal with the one-off, nuanced transactions.

It’ll post these as Bills, Receipts, or Expense Claims directly into Xero and attach the relevant documents ensuring you have multiple cloud based backups across your system.

Invoice Capture

The likes of Dext will also read and post any sales invoices you send it, however that means you have had to generate it already using an Excel spreadsheet or Word template. That’s inefficient, and we don’t like inefficiency here.

The better option is to either use Xero to set up your invoices directly (using the likes of Repeating Invoices if you’re setting up monthly maintenance fees or similar), or to use your CRM or Project Management system to generate the invoices directly into Xero for you.

Xero has an App Store which has many CRM and Project Management Apps that seamlessly integrate with it, so check it out to find the system that you like best.

Once you, your accountant, or a combination of both have got all the data into Xero, your on the right track. But the power of data is what you get from it, so I’ll summarise very briefly a couple of the key results here:

Real Time Financials

Having a bank feed into Xero, as well as other systems and processes in place, mean that you can, if you wish, have day-by-day reporting coming out of Xero if you really want to.

Normally, we’d recommend reviewing your financials on a monthly basis, but you can do what you want!


The biggest goal of all business owners is to stay on the right side of the law. Keeping up with your compliance regulations is no easy task, so having your data safe and secure in Xero is a brilliant first step.

Making sure it’s bang up-to-date also helps when it comes to planning your taxes. If you can have your VAT return turned around within 7 days of your quarter end, you’ve still got a month to get the cash ready and send it to HMRC! If you’re nice and prompt on your year-end accounts and corporation tax payment, HMRC will actually pay your interest!

Generally speaking, HMRC’s deadlines aren’t tight. With good records, good systems, and a good accountant, your returns will be done nicely and promptly for you, meaning you don’t need to worry about deadlines at all.

To talk to us about never worrying about deadlines again, book a call.

Decision Making

Having all of this data in Xero and pulling reports from it (maybe in the form of management accounts) really allows you to make decisions quickly and confidently.

Whether it’s hiring a new member of staff, agreeing to a new lease agreement, or whether or not you can take a dividend before Christmas, regular reporting helps decision-making heaps.

Now, this is a very quick guide to the basics of a finance function - there are many more benefits, and you can expand on the tech stack massively if you wanted to.

My advice is to keep it simple to start with, and work with just the products you need.

Our agency tech stack suggestions surround the likes of Xero and Dext, leaving you to decide on the CRM/Project Management system you like best (as long as the integration works well with Xero, or you’re invoicing directly from Xero).

To book a call to talk about tech stacks, click here.