Xero Practice Manager Task Settings: Must-have tasks

This article is an extract from the book 'Everything you need to know about Xero Practice Manager'
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There are some settings in XPM you need to get right. In this section we’ll be reviewing the essential settings to ensure your practice is set up to succeed.

To get started, go to ‘Business > Settings > Tasks’ in your XPM.

Task settings

Getting your task list correct at the beginning can save you a lot of heartache when the hard questions come later. This section will allow you to make the right decisions for your practice and avoid some of the common mistakes.

As we touched on in Chapter 3: Revenue Streams, tasks are the services you offer in your practice. Tasks are what your staff see every day when they complete their time sheets. It is what you report on when you ask, ‘How good are we at something? It is also how we break up the different processes, decision points and resource allocation in our practice. Choosing good tasks creates good quotes, processes, invoices and reports. Choosing inappropriate tasks leads to unreliability, confusion and cost.

Must-have tasks

Two must-have tasks are ‘Admin’ and ‘Leave’. These will be present in every practice and should be used to display a full 40-hour week. You may want to swap the term ‘Admin’ for ‘Internal’, but the principle remains the same: we want one task to represent the non-client work we do in our practice, and the other for the leave our staff take. It is important not to swap the term ‘Leave’ out for anything else, as this is used in our productivity reporting.

Must-not tasks

There are six common faults that occur when setting up tasks in XPM.

1. Staff-based tasks
   
   Tasks should never, ever feature a staff member’s name, eg. ‘Annual Accounts – David’. Ever. Remember, your staff are temporary, and your business must exist beyond them. Start as you mean to continue and set up systems that will grow with you. XPM helpfully offers custom staff and custom task rates that you can use to associate a unique value or invoiced value to a person. This should be independent of a task itself.
2. Role-based tasks
   
   Tasks should never feature a role or job title, eg. ‘Annual Accounts – Senior Accountant’. Referring to the practice settings section, all accounting practices use the staff billable rate method as opposed to the task billable bate. That means that the rate applied to a job is determined by who did the work, not what the work was. If we have a senior accountant working on a GST return, we will apply their staff rate to that job even where they may work on junior-level tasks.
   
   Sometimes, however, we have a mix of the two. We may have different staff rates depending on the type of activity that person is doing. This adds another layer of complexity to our billing arrangements with our customers and is sometimes referred to as a rate card. Below is an example of what that looked like sometime between the pre-Jurassic and post-Jurassic periods.

We can apply this complex system of rates into our custom task rates settings found in ‘Business > Settings > Staff > Staff Name > Custom Task Rates’. This allows us to apply the correct rates for the person and the task to each job, without having to set up separate tasks for the same activity, eg. ‘Annual Accounts’ for each of the roles or rates in our practice.

4. Customer-based tasks
   
   A task should never feature a customer's name, eg. ‘Management Accounts – ABC Limited’. Your business must exist beyond its clients. XPM helpfully offers custom client rates that you can use to associate unique or agreed rates for particular clients. If you have the need to set up a custom client rate, you can do this by clicking into the client record, then going to the billing section at the bottom of the page. In this section you can select ‘Add Custom Task Rates’. This rate will override the standard task rate (and staff) rate for this particular client.
   
   
5. Temporary tasks
   
   You should not create tasks for that one-off activity you did for that one client three years ago, no matter how important you think it might be at the time to track separately. Use sub-tasks (labels) to categorise this time and save yourself a reporting nightmare later on. Ask yourself:

• ‘What is the nature of this activity?’
• ‘What is it similar to?’
• ‘How and where would I want to see this unique one-off activity in a revenue report?’
  
  It is helpful to have tasks such as ‘General Advice’ or ‘General Consulting’ set up for tasks such as these. Choose this task, then add a label that describes the nature of the work.

5. Sub-sub-tasks
   
   You shouldn’t see hyphens, colons or forward slashes in task names. Sub-tasks, eg. ‘GST – February/March’ should not be unique tasks. XPM allows us to create sub-tasks (labels) within the job or inside the job template in order to separate out different parts of a service we offer, eg. 'February/March’.
   
   
6. Unused tasks and services
   
   The best way to protect against unused tasks is to report on them. Tasks that routinely contain no information in your task-based reporting should be removed. These tasks are not being used because they are not being offered to clients, or not being demanded by clients. Maybe they are not clear enough and are not understood by your staff.
   
   

Task-based reporting

The reward for a good task list is revenue-based reporting. If you do this well, you will be able to answer important questions like:

• ‘What are we good at?’
• ‘Where did our revenue and profit come from last month?’
• ‘How should I prioritise my work?’
• 'What kind of skills do I need to hire?'

Good task and revenue reporting allow you to see how long activities typically take by different staff. This lets you plan better, price your services better, and make more money. It lets you measure and monitor which activities make you the most money, and where your attention should be focused. Don’t be surprised to find unprofitable tasks in your business. Every practice has them. Some practices suspect they have them. Most practices don’t know which ones they are. How can these low or no-profitability services be repackaged or reimagined to be a profit-making activity for your practice? You may also find that some tasks are routinely under-quoted and overrun. Now you’ve got business information that leads to real decision-making.

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