How to Get Started with Xero in 13 Simple Steps
Xero is a cloud-based accounting software ideal for businesses. If you’re new to Xero, this step-by-step guide will help you set up your account and get started with managing your finances effectively.
Here’s a quick 13-step guide to help you get up and running with Xero:
1. Watch the ‘Xero Dashboard’ Video
To begin, familiarize yourself with the Xero platform by watching the ‘Xero Dashboard’ video, which can be found in the top-left corner of your Xero dashboard.
2. Set Up Your Organisation Details
Enter your business details, such as your company’s name, registration number, and office address. This information is important for displaying on invoices and official documents.
Go to Settings > Organisation Settings and update your business’s contact details, including:
- Display name
- Legal/Trading name
- Email address
- Registration number
- Organisation description
- Physical and registered addresses
- Organisation type
- Phone and fax numbers
- Logo
- Website
3. Configure Your Financial Settings
Next, enter your company’s financial information to ensure that Xero generates accurate reports.
Go to Settings > Advanced Settings > Financial Settings to add:
- Financial year end
- Sales Tax/GST details
4. Brand Your Invoices
Personalize your invoices by adding your logo, setting payment terms, and defining the payment method. Go to Settings > Invoice Settings to create branding schemes that align with your business needs.
Shorter payment terms can help improve cash flow and encourage prompt payments.
5. Set Up Your Chart of Accounts
If you’re transitioning from another accounting system, import or modify your existing chart of accounts. If you’re starting fresh, you can use Xero’s default chart of accounts and make adjustments as necessary.
To manage your accounts, go to Accounting > Chart of Accounts. You can add, customize, or delete accounts to fit your business.
6. Link Your Bank Accounts
Set up bank feeds, including accounts for credit cards and PayPal, to streamline transaction tracking. This video will show you how to link your accounts.
7. Reconcile Your Accounts Regularly
Reconciliation is essential to keeping your financial data accurate. Xero pulls transactions from your bank, so you can easily categorize them. Reconciling weekly (or daily) will ensure your financials are up-to-date.
By reconciling regularly, you maintain a clear view of your cash flow, which helps make better business decisions.
8. Set Up Payroll
Use Xero Payroll to manage staff wages and benefits in one place. If you’re transferring from another system mid-year, don’t forget to add your opening balances.
Go to Payroll > Payroll Overview for a detailed setup guide.
9. Link Payment Services
Set up connections to payment services like PayPal or Stripe. Offering multiple payment options can help ensure you get paid faster.
Go to Settings > Invoice Settings > Payment Services to link your payment gateways.
10. Enable Payment Reminders
Set up payment reminders to encourage timely payments from your customers. Once you’re comfortable with daily reconciliations, go to Settings > Invoice Settings > Invoice Reminders to automate your payment reminders.
11. Add Users
Add team members, accountants like WLP, or bookkeepers who need access to your Xero account. To do this, go to Settings > Users and assign appropriate permissions.
12. Learn Basic Reports
Understanding Xero’s reports is key to managing your business finances. Start by reviewing key reports like the Balance Sheet, Profit & Loss, Aged Receivables, and Aged Payables.
Access these reports under Accounting > Reports.
13. Explore Xero Apps
Maximize efficiency by exploring Xero’s range of apps and add-ons. These can automate tasks, such as cash flow forecasting or document management, helping to save time.
Visit the Xero App Marketplace to discover the full range of add-ons.
Finally, if you have an accountant like WLP, it’s a good idea to ask them to review your setup. They can ensure your year-to-date figures are accurate and add year-end conversion balances.
For a more in-depth understanding, consider signing up for the WLP Academy WSQ Xero Course.