Xero Accounting is a top pick when it comes to accounting software. Xero’s ease of use and simple settings make it the choice for many small businesses. You can track accounts receivable, accounts payable as well as bank accounts and more. Signing up to Xero with a free 30 trial means you can get a feel for the product and if it is right for your business before making a commitment.
Getting Started with Xero Accounting
After signing up to Xero Accounting the first thing to do is set up all your businesses information so the system functions the way you expect and reporting is accurate. Xero offers Getting Started videos and links to help article on each page. The videos can be hidden using the close button and shown again by activating them through the help menu.
On Page Help
On each page in the top right-hand side, you will find a help icon, clicking the help icon will show some related help for the page you are on and the ability to search the help files for anything else you need help with.
Visiting Xero’s help files and entering the search term “Getting Started” returns a result titled “Start Using Xero” which gives a basic guide to some information you should enter into the system.
Getting Started Guide
Xero provides information about setting up your organisation, this includes entering key financial information, your logo and invoice settings and giving access to your financial advisor, setting up the chart of accounts and bank accounts and entering opening balances.
Getting Started Conclusion
Xero offers basic information on how to set up your organisation in the system, there are a number of places data needs to be entered so that the system operates correctly and produces accurate reports. Xero tip is if you are unsure about what information you need you should ask your advisor. If you do not have an advisor Xero offers a list of advisors you can hire.
Xero Accounting allows Bank Accounts to be created in the Accounts area, this is most useful when a feed from the bank is established. If you prefer to maunally upload transactions into Xero you can achieve this via CSV file.
Bank Accounts Dashboard
When your bank account has been set up in Xero you will be able to see information about it such as the balance of imported transactions and the number of transaction you need to reconcile. There are a number of actions you can take from the bank account screen including transfers and creating transactions.
Transactions and payments entered into Xero Accounting can be viewed in the Transactions area of the Bank Account, here you can see if the transaction has been reconciled to a statement line in your bank account.
From the Statement Line area, you are able to view both the Statement Line and Transaction it has been reconciled against which is useful when reviewing payments that have come through your bank account.
Bank Accounts Conclusion
Overall the Xero Bank Accounts features are great. Bank Accounts are shown in a familiar way that would make sense to most users of internet banking. Once a connection is made to your banking provider daily transactions you make will flow seamlessly into Xero ready for reconciliation against transactions and payments entered into Xero.
Reconciling transactions is an important feature in accounting software. Xero shows each statement line on one side and allows you to give details about the transaction or match it to an existing transaction you have already created in Xero.
If you are only entering basic information about a transaction you can enter the details directly into the inputs provided, at a minimum this includes a contact, an account and a description. When you have entered enough details about the transaction an OK button will appear allowing you to reconcile the transaction. From the reconcile screen you are also able to match, transfer between your bank accounts and discuss (meaning you can leave a note for another user like your financial advisor).
If the imported statement line already has a matching transaction in the system you can use the match tab to find it, once the total of the selected transactions matches to the total of the statement line you will be able to reconcile the transaction.
Once all your transactions have been reconciled for your bank accounts you can be sure that the information in the system will match the transactions you have made in your bank account. This is important for accurate and up to date reporting.
Invoices & Income
Xero Accounting has great capabilities when it comes to Invoicing customers. Invoices, Quotes and Credits can all be created from the sales area. Xero also has the functionality to send statements to customers, keeping everyone up to date with regards to balances owning.
Xero’s Sales area starts with a dashboard that gives you information about the status and amounts of Invoices. This includes when money is expected to be received, who owes you and how much. Below the Sales Dashboard is the Quotes area where information regarding the status of quotes can be seen.
Clicking into the Awaiting Payment area you can see a list of the invoices that are outstanding. From here you can print, email or make bulk payments. There are tabs above the invoice table that allow you to filter drafts, awaiting approval, paid and repeating invoices.
Creating a New Invoice
Creating an invoice is simple, enter who it is to, the invoice and due dates, a number and reference. Then enter the rows of the invoice, once you have completed all the relevant information click the “Approve” button, or save to complete later. Xero also allows you to upload documents to your invoice. This is very helpful to keep track of purchase orders and other relevant documents.
Once approved you can send the invoice to the contact using the email feature. This allows you to enter an email address, subject and message. These details will be mostly prefilled from defaults in the settings area. If you upload files to the invoice you can choose to include them in the email as well.
Applying a Payment
When the customer pays the invoice you can enter the payment on the invoice by entering a date, amount, bank account and a reference.
Applying a Batch Payment
Alternatively, you can use the bulk payment feature to enter payments for multiple invoices at once. You cannot include credits in bulks payments, this means you need to apply the credit directly to an invoice or apply payments individually to credits.
Invoices & Income Conclusion
Xero’s Invoicing features are very powerful, coupled with templating, recurring Invoices and Invoice Reminders you can automate much of your workflow.
Bills & Expenses
The Purchases area in Xero allows you to create purchase orders and bills. Purchase orders can be copied to bills once received. Bills can have payments added or you can bulk pay them and download ABA files to upload to your bank account.
The purchases dashboard gives you information about the current status of invoices and amounts owing. Below the Bills section, you can see information about Purchase orders and their status.
Bill List View
Clicking into the bill area shows a list view of the bills you have entered, from here you can click an existing bill to see its details and make payments. From the list view, you can also select multiple invoices and create a Batch Payment. Clicking on the New Bill button will open the screen for entering a new bill.
Creating a New Bill
On the screen for creating new bills, you need to enter a contact, date, due date and reference. You can also upload files to keep alongside your bill. Each line requires you to enter a description, quantity, price, account and tax rate related the the items on your bill.
Applying a Payment
To apply a payment to an invoice you enter the amount that was paid, date, the account it was paid from and a reference. This will create a transaction waiting to be reconciled in the bank accounts area.
Applying a Batch Payment
If you have received payment for more than one transaction you can select multiple transactions from the list view screen and click Batch Payment. This will open an interface where you can enter payment details for each contact for use in an ABA file which can be uploaded directly to your bank account.
Bills & Expenses Conclusion
Xero Accounting allows you to keep track of your bills and their due dates, you can add payments to them and reconcile the transaction against bank account statement lines in the reconcile area of the bank accounts. Multiple bills can be grouped together to make a Batch Payment that can be downloaded and then uploaded directly to your bank account to make payments.
Xero is capable of generating many reports including key financial documents. Reports can be filtered to show just the data you are looking for. Generated reports can be published so they can be viewed again as they were. Xero offers the ability to alter reports so they are displayed the way you want to see them.
The reports dashboard lists all the reports Xero can generate. Using the search bar in the top right you can easily locate the report you want.
Profit & Loss Example
This is an example of a profit and loss generated by Xero, you can compare periods, change dates and add additional information to the report.
Business Activity Statement (BAS) Example
Xero’s Business Activity Statement can prepopulate a lot of data for you. Based on your settings Xero will give you a list of Activity statements that you might need to complete. Once you have completed the Activity Statement you can save the report and copy the data to the ATO in the normal method you use.
Xero Accounting has a large range of reports so you can gain an insight into your business from many angles. Publishing reports allows you to keep a copy of your reports as they were when you published them.
The settings area of Xero allows you to set your business details up for use throughout the system. It is important to accurately enter your details into the settings area so the system operates as you expect.
The settings dashboard shows links to groups settings including Organisation & Financial settings, Chart of Accounts, Tracking, Conversion Balances, Tax Rates, Invoice Templates, Defaults and more.
An example of some Xero settings including Activity statement settings, tax defaults and lock dates. Lock dates allow you to stop users from editing transaction prior to the given date, so once you have everything up to date or Activity statements are submitted users cannot accidentally make changes to finalised data.
Invoice Settings and Templates
Xero gives options for invoice templating, this includes basic templating where you can change the logo and some other settings, through to advanced templating using DOCX templates from Microsoft Word.
Xero allows you to enter key information about your organisation into the settings area, this information is used throughout the system for many different things. Some of the things Xero allows you to set up are templates and defaults for transactions, templates for emails and reminders for overdue invoices.
Xero’s permissions are linked directly with Users. Xero has a couple of roles you can apply to a user to change the access they have to your financial data.
From the user screen, you can select a user to change the permissions they have.
Xero allows you to indicate if the user should access project, expenses, business and account as well as what level of access they have.
Xero’s permissions allows for some control over what users are able to do in the system. From the user’s profile, you are able to restrict access to some areas and some features.
Xero offers support primarily through a contact form. Once you have searched through there help files for answers to a question, you can click on a button to open a form where you can submit a question and someone from Xero will get back to you.
Xero’s support area directs you to there help files and then allows you to ask them a question if you cannot find the answer to your question.
Send Support Message
Once you have checked Xero help for the answer to your question you can fill in a support form and someone from Xero will get back to you.
Xero does not have a publically available email address or phone number for support, the form for contacting support is found at the bottom of help articles to be used if you cannot find the answer to your question in there help documents.
Xero offers a number of plan depending on your needs. Starting from $25 a month and going up to $300 a month.
Xero Accounting Pricing
Xero’s plans cover the basics, you can also get additional add-ons like Projects and Expenses depending on your needs.
Xero Price Change
Xero is increasing the price of some of there plans from 28th September 2018.
Xero offers many different plans to choose from depending on your needs, Xero also offers more features such as Expenses and Projects for an additional cost.
Xero Accounting Review Conclusion
Xero excels as a system for business with simple needs. The system can handle the tracking of your sales, your bills and automatically import transaction from your bank account to help keep your books up to date. With basic permissions for users, it is possible to control some aspects of what users can do. Support through help files is easily available with additional support possible should you need it. Connecting your financial advisor with your Xero subscription can streamline many processes making your reporting requirements simpler to complete. Xero has a number of plans available to choose from, with a 30-day trial so you can try before you commit.