Xero is our preferred accounting system at Vault because we believe it’s the best system for startups and expanding businesses alike. It’s a flexible, cloud-based system that provides a core package with add-ons and integrations as you grow and need them. When combined with a professional set up and great advice from experienced bookkeeping experts (like our Vault team!), Xero makes BAS, IAS and general bookkeeping tasks simple and fast.

Here are some tips on basic set-up tasks to get you started.

Learn The Basics

Xero provides many great video tutorials on a range of topics, which you can check out if you get stuck. If you don’t know anything about Xero, we recommend starting with this video: Getting started with Xero.

Set Up Bank Feeds

Bank feeds import bank transactions, including credit card and PayPal transactions, directly into Xero so you don’t need to type them manually. This will save lots of time on your bookkeeping, BAS and IAS tasks – if you set up bank feeds correctly. Watch Xero’s video tutorial on setting up bank feeds.

Set Up Your Chart Of Accounts

Your chart of accounts is the foundation of your bookkeeping system, so get your accountant’s help to create a chart of accounts for your specific business. Xero also provides a default chart of accounts that you can modify. If you have a chart of accounts in another accounting system, you can import it into Xero easily. Read Xero’s instructions on customizing a chart of accounts.

Reconcile Your Accounts

Once you set up bank feeds, you should regularly approve the pre-matched items to reconcile your accounts. Xero learns as it goes – so once you categorize a transaction, it will categorize similar transactions the same way. You just have to check them and click OK. We advise clients to reconcile weekly or even daily to keep data up to date. This way, you always know your numbers, including your cash flow. (Read our page on cash flow planning.)

Add Organization Details

Don’t forget to add your organisation’s details into Xero to provide required information on your invoices, including ABN, ACN and address.

Go to Settings > General Settings > Organisation Settings to details such as your name, email, address and contact details.

Set Up Financial Settings

You can add information about your financial year end and VAT details by going to Settings > General Settings > Financial Settings.

Add Users

You will probably need to give other people access to your accounting system, such as your accountant and bookkeeper. You can add users at Settings > General Settings > Users. Watch Xero’s video tutorial on adding new users.

Add branding

You can customize Xero invoices with your logo and other details specific to your organisation, including payment terms. To add branding to your invoices, go to Settings > General Settings > Invoice Settings.

Add Payment Services

In Xero, you can link to payment services like PayPal, Stripe and GoCardless so customers can easily pay you. New payment options are being added all the time.

To set up a payment service and create a ‘Pay Now’ button for your invoices, watch this Xero tutorial on adding a payment service. Go to Settings > General Settings > Invoice Settings > Payment Services.

Set Up Payment Reminders

Getting paid is often the hardest part of running a business. Xero lets you set up payment reminders and credit control systems to help you get paid on time. Go to Settings > General Settings > Invoice Settings > Invoice Reminders.

Create Basic Reports

Once you have up-to-date data, you should analyze it to find problems early and make decisions. Some important reports are your balance sheet, profit and loss, aged receivables and aged payables. Go to Reports > All Reports to see all the options.

Set Up Payroll

If you have staff, you know that staff costs can skyrocket quickly. Xero helps you monitor these costs by keeping all payroll information in one place. Read Xero’s instructions for setting up payroll.

If you transfer payroll from another system during the financial year, add the opening balances at Payroll > Payroll Overview.

Find Apps And Add-Ons

Xero has many apps and add-ons that can help you automate tasks and save time. Check out the Xero app marketplace to explore the possibilities.

Get Professional Help

A bookkeeping system is only as useful as the data in it – which begins with a great setup. We recommend asking your accountant to check your setup for errors or missing information. They might also recommend time-saving apps or useful add-ons. At Vault, we’re always happy to advise on the best way to use Xero.

Contact us for more information.