How To Use Xero in 13 Easy Steps

Depending on your particular company’s requirements, Xero will either save you a significant amount of time, effort and money, or it may end up giving you more trouble than it is worth. So first, examine the following arguments for and against, then come to your own conclusion.

Sadly, this is not often how things operate in the actual world. Even if you were able to get the word out very rapidly, there is a good chance that the world will not fall in love with your firm on the very first day. This is because you quickly come to the realisation that developing a business requires you to perform a lot of things that you probably don’t love doing, such as employing employees, locating IT solutions, and dealing with the dreaded bookkeeping and tax issues.

You are in luck since Xero, another startup can provide assistance with the last two concerns. It’s true that the firm that everyone adores and that has taken the globe by storm was once a startup similar to the one you’re running now.

And this is just one of the many reasons why Xero is the most appropriate accounting software for new businesses. Additional compelling arguments include the following:

Xero provides a flexible business platform

Every new company requires tools that will not only assist in the expansion of the firm but also expand with it. In addition, the Xero ecosystem offers just that.

When you get started with Xero’s core accounting package, you have the option of bolting on other applications that interact with Xero as your company expands. As a result, you don’t have to get rid of old software just because you’ve outgrown it; instead, you can easily add anything you want to develop a cutting-edge platform adapted to meet your company’s specific requirements.

You may develop eCommerce sites, accept online payments in a safe manner, construct a customer database using an integrated CRM, become more mobile, and even manage your employees using rostering solutions and workflow management tools if you connect a variety of add-ons.

You can swiftly add and personalise flexible reporting capabilities as your company expands, allowing you to produce reports for KPIs, departmental reports, or whatever else you want.

In addition, if you discover that a certain add-on no longer fulfils your requirements, you can easily unsubscribe from it and add another one that does.

Xero makes record-keeping simple

One of the most cutting-edge and widely used cloud-based accounting solutions available today is called Xero. They have simplified the process of complying with your company’s bookkeeping responsibilities by giving you the possibility to input bank feeds into the system immediately.

Because your financial adviser will also able to view the same data at the same time, the two of you will be able to discuss difficulties as they arise, rather than having to wait six or even 12 months afterwards. In addition, because it is a cloud-based service, your financial management software will always have the most recent updates. As a result, there will be no more manual software upgrades to purchase or instal, and there will be no more issues with versions that are incompatible.

Setting Up Xero

Some people believe that the number 13 brings bad luck, but if you follow these 13 best suggestions on utilising Xero and making the most out of your account, you won’t need luck at all.

1. Getting Started with Xero

Watching the video titled “Getting Started with Xero” is the first thing you should do to get familiar with the Xero platform.

2. Set up your bank account feeds

Next, you need to set up the feeds for your bank accounts, including any credit card and PayPal accounts that you may already have. You may learn how to achieve it by watching this video.

3. Set up your chart of accounts

If you are switching to Xero from another piece of accounting software, you will be given the opportunity to either import your current chart of accounts into Xero or modify the chart of accounts that is currently there.

If you have access to a certified public accountant, you might want to discuss the plausibility of this option with them first. If, on the other hand, you are your company’s own book-keeper, we recommend that you make use of the chart of accounts that is included in the default installation of Xero. In order to better meet the needs of your firm, you can either remove current accounts, edit the ones you already have, or create new accounts.

Go to Settings > Chart of Accounts if you want to make any adjustments to your accounts. Click this link if you want additional information on customising your chart of accounts.

4. Reconcile often

The task of reconciling bank accounts is made significantly easier than it has ever been previously using Xero. If you spend a few minutes each week approving things that have already been matched, your data will always be up to date even if you don’t do anything else to update it. Because Xero is integrated with your bank, all of your transactions are automatically imported into the software without requiring any effort on your part. Because Xero remembers the category that was last assigned to a transaction, all you need to do to assign the transaction to the same category as it was before is click the “OK” button.

You should execute reconciliation at least once every week, if not on a daily basis, to verify that the information contained in your financial records are as accurate as feasible.

Invoices that are kept up to date on a regular basis provide a more accurate picture of cash flow. If you have a crystal clear picture of your company’s cash flow, you will be able to make more informed choices that are in the best interest of your business and avoid falling behind on payments that are due.

You may learn more about the Xero bank reconciliation process by watching this video.

5. Set up your organisation details

You are required to make certain that you have a registration number as well as an address for the registered office if you own a limited liability company (LLC). On each and every one of your invoices that you send out, you are required to include a copy of this information.

• You may add or modify the contact information for your company by going to Settings > General Settings > Organisation Settings. This includes the following information:
• Display name
• Description of the organisation, including its legal or trading name, email address, and registration number
• Physical address
• Organizational type and address for registration
• The call and fax instuctions
• Logo\sWebsite

6. Set up your financial settings

Select Settings > General Settings > Financial Settings from the menu bar to add your company’s information.

The conclusion of the fiscal year: 

• doing so will ensure that the year-end information for your reports is accurate.
• VAT Details: VAT system, sometimes known as a flat rate, cash rate, or accrual rate; VAT number; VAT period

1. Add users

Under Settings > General Settings > Users, you will see the option to add new users. Include your accountant, bookkeeper, and any other appropriate stakeholders in the discussion. You may learn more about the roles that can be given to your users by watching this video.

Here you will discover further information regarding users:

• Add a user’s details
• Send invitation to user
•  View your Xero users
• Edit a user

7. Add your company’s branding

After that, you will have the ability to personalise your invoices by including payment terms, a company logo, and a contract.

It might be helpful for you to increase your money flow if you establish clear criteria for the manner in which you will be paid. When it comes to getting paid more quickly, it’s possible that having shorter payment intervals will be useful.

Simply navigate to Settings > General Settings > Invoice Settings in order to configure the different branding options.

8. Add payment services

In addition, you must link your Xero account to any current payment providers you use. Services like PayPal, Stripe, and GoCardless might fall in this category. Customers have a simpler time making payments to you when they may choose from a wider range of payment methods.

This instructional video will show you how to set up a payment service so that you can add a “Pay Now” button to the invoices that you send out to customers.

Navigate to Settings > General Settings > Invoice Settings > Payment Services in order to accomplish this.

9. Set up payment reminders

Receiving payment in a timely manner is one of the most important factors contributing to the success of any organisation. Establishing payment reminders and organising the mechanisms that govern your credit can help you boost the speed at which you are paid. This can be done by organising the mechanisms that regulate your credit.

To configure your invoice reminders, navigate to Settings > General Settings > Invoice Settings.

You are wasting your time if you bother to set up payment reminders before you have made it a consistent practise to compare your outgoing payments and incoming receipts. If a customer has previously paid their bill to your company, pursuing payment from them further could be harmful to your image. You will be able to come back to this stage once you have developed a routine procedure for balancing your accounts.

10. Learn basic reports

It is essential to have knowledge of the fundamental operations of Xero reports. Therefore, after you have submitted some data, you should look at your balance sheet, profit and loss statement, aged payables, and aged receivables.

Select Reports > All Reports from the menu to view all available choices.

11. Set up payroll

Xero Payroll may assist you in keeping track of the expenditures associated with your personnel. In addition, you won’t need to extract information about payroll expenses from a different system since this function lets you retain everything related to payroll in a one location.

The payroll overview serves as a thorough guide that will walk you through each stage of the configuration process.

When transferring payroll from one system to another in the midst of the fiscal year, the opening balances must be included in the transfer.

You may find this information by going to Payroll > Payroll Overview.

12. Connect apps

Using the numerous applications and add-ons available for Xero is an excellent approach to eliminate unnecessary steps and save time for yourself.

The applications provided by Xero cover a broad spectrum of capabilities, ranging from cash flow forecasting to document management and many others. As a result, the Xero app store is the most effective area to investigate all of your available choices.

Finally, if you already have a working relationship with an accountant, you should consult with them on your arrangement. They can confirm that your year-to-date numbers are valid and make any necessary modifications, but they may need to add year-end conversion balances to the report.

Among the Xero applications that are now accessible in the marketplace, Float has one of the greatest ratings. It is a cash flow forecasting tool that has won several awards and generates accurate and visually appealing reports for you and your company. The bills and invoices generated by your accounting software are imported into Float, which are then used to continuously update your forecast. The interface between Float and Xero eliminates the need for manually entering data and ensures that the prediction is always accurate and up to date.

Sign up for a free trial today to learn how to use Float.