Setting up Xero cloud accounting software at your business is relatively simple. Once you’ve set up Xero, it’s time to start using it — here’s how.
This is the Xero accounting beginner’s guide. Xero is a cloud-based online accounting platform that allows small businesses to take control over and automate a broad spectrum of different time-consuming accounting and bookkeeping tasks. The Xero platform offers an extremely wide range of features that can significantly reduce the amount of time spent performing repetitive accounting jobs, as well as minimize the overall cost of accounting services for your business.
By streamlining administrative tasks Xero provides businesses with valuable time that is better spent directed toward business-critical areas, as well as reducing administrative friction and paperwork. The unique way in which Xero is able to connect to a range of different third party apps and banking platforms delivers deep insight into the financial status of any business at a glance.
Getting started with Xero is relatively simple — businesses need only sign up via the Xero website, which allows new users to jump in right away. Once you’ve got Xero set up and plugged into your various business processes, however, how can you best take advantage of the features it offers and integrate it into your daily business workflow?
The following 10 tips will help you set up and use Xero efficiently at your business.
1. Follow Best Practices for Xero Setup
The first stop in the Xero accounting beginner’s guide is getting setup. Once you’ve created a Xero account, there are a few setup tasks that should be taken care of first in order to ensure your Xero setup will function correctly. To learn how to set up Xero in the most efficient manner possible, take a look at Fullstack’s 10 steps to an Ideal Xero Setup guide.
2. Create Customized Roles for Your Team
Xero provides expanded functionality for businesses that want to allow multiple people to use Xero at the same time. Using Xero’s roles function, it’s possible to create customized roles for each team member using Xero.
By creating multiple roles, it’s possible to allow your entire team to collaborate on Xero without providing sensitive information to all team members at the same time. Xero allows users to assign roles based on the role of each specific team member in your business — Xero even provides a convenient chart that helps you determine which role is best for each team member.
When you create a role for a team member, they will only gain access to the information and functions available to the role you’ve assigned them.
- Here’s how to set user roles in Xero:
- Navigate to Settings, then click General Settings
- Click Users, then click the “Add a User” option
- You’ll be presented with the user management page. You can select a variety of roles such as Advisor, which is likely the best role for your business accountant. Specific user roles can also be modified on this page, allowing you to customize roles and add additional functionality or feature access.
3. Streamline Your Xero Use With the + Icon
Navigating through the various features offered by Xero can quickly become tiresome if you have not yet taken the time to customize your dashboard. Xero provides users with a convenient “+” icon at the top right of all Xero pages that can save a significant amount of time.
The + icon will allow you to quickly view and select a variety of different functions that include invoice creation, purchase orders, or contact creation. As you become proficient with Xero, you’ll find yourself using the + icon more often.
4. Publish Reports Quickly and Easily
Publishing complex reports such as financial statements can be a time consuming process. Xero streamlines the reporting process, allowing you to create, edit, and save reports directly in the Xero platform with minimal effort. Xero reports are simple, easy to publish snapshot of the financial status of your business at any given point in time.
- To publish a report in Xero,
- Click the green “Publish” button located at the bottom of the Xero Reports interface
- You’ll be presented with a screen that allows you to either publish the report, or save it for later
- To access previously published reports or draft reports, click the Reports tab on the main Xero menu at any time. Select “All Reports,” and then filter by preference.
Published reports can be viewed by users with relevant Role access when they log in. The Reports function of Xero combined with Xero roles is a powerful way to share information between team members, as well as collaboratively manage and edit reports.
5. Don’t Stress About Mistakes — Xero Has an “Undo” Function
Mistakes occur regardless of how simple Xero makes accounting. If you’re reconciling your bank feed in Xero, it’s possible that you may have a large number of transactions to reconcile, increasing the probability of error.
If you accidentally reconcile a transaction incorrectly, don’t worry — Xero includes an “unreconcile” feature that will allow you to rapidly correct this mistake. The unreconcile function retains the account transaction and bank statement details but removes any connection you may have incorrectly made between them.
- To unreconcile transactions in Xero,
- Navigate to the account dashboard and click the three dots next to the account name you want to unreconcile
- Navigate to “Account Transactions” using the Find header
- Click the transaction you want to correct
- Click “Options,” then click “Unreconcile”
- Click OK on the prompt in order to unreconcile the transaction
6. Use the Built-In Calculator
One of the most commonly overlooked tools included in Xero is the built-in calculator. Using the Xero calculator, it’s possible to perform a variety of math functions in text fields, which can significantly reduce the risk of entry error and save you time spent on arithmetic tasks.
Using the Xero calculator is extremely simple — just type any equation, such as 2*1.5 into a field in Xero and press enter. Xero will calculate and enter the result for you. Xero allows users to input equations into transaction and manual journals areas, but it’s not available in every field on Xero.
7. Save Time by Automating Repeating Invoices
The next step in the Xero accountant beginner’s guide is automating invoices. Repeating the same invoice composition process for invoices that are sent on a regular basis is a needless waste of time with Xero. Xero provides users with a repeating invoice function that will automatically create invoices scheduled on a regular basis.
To create a repeating invoice, you’ll need to create a template, then select the frequency you specify. Template invoices are saved in the invoice draft tab, allowing you to edit the amount if necessary. If you don’t make any changes to the invoice, it will automatically shift to the Awaiting Payment tab. The same process can be performed for bills.
8. Experiment with the Demo Company Feature
You may find that you want to experiment with a hypothetical transaction in Xero but are concerned about balancing your books. Xero offers a unique “Demo Company” feature that allows users to experiment with test data.
Demo Company provides users with the ability to test out a broad range of features and transactions without affecting the real financials of a business.
- To try out the Demo Company feature,
- Click the “list” icon next to your company name on any Xero page
- Select “My Xero”
- Click “Try the Demo Company”
You can reset the data you input via Demo Company at any time, but keep in mind that this data will automatically clear every 28 days.
9. Use Xero to Manage Multiple Organizations
Many Xero users manage more than one business or operate businesses with different tax details. In this case, it’s important to keep different bookkeeping data for each individual business.
In many scenarios, it’s critical to ensure that all transactions between these organizations are accurately logged in the books of each. Viewing virtual bookkeeping files simultaneously is the best way to ensure no mistakes are made, but it can be difficult to log in and out of multiple instances of Xero at the same time.
Using different internet browsers, or setting up multiple identities via browsers that support this feature such as Chrome, will allow you to open multiple instances of Xero at the same time — thereby minimizing the risk of errors when managing multiple organizations.
10. Let Xero Follow Up Your Invoices
As we come to the end of the Xero accountant beginner’s guide, let’s look at following up invoices. Chasing up overdue invoices can cut into critical schedule time that could otherwise be dedicated toward more important business tasks. Xero provides users with an automated invoice reminder process that will politely remind clients and customers when accounts become overdue.
- To set up invoice reminders,
- Navigate to General Settings under the Settings tab
- Click Invoice Settings
- Click the “Invoice Reminders” button
- Using the Invoice Reminders options page, select the frequency and schedule for invoice reminders and customize your reminder messages
These ten tips will help you integrate Xero into your daily workflow and save a significant amount of time when managing your accounts. Optimizing Xero by customizing your dashboard and learning the various features Xero offers will help you ensure your accounts are accurate, reliable, and easy to access.