Top Ten Tips for Xero Users

05 October 2022 - Ryan Pearcy

Xero is one of the global leaders in online accounting software, and one that we regularly recommend to our clients. It’s especially useful for small and medium sized businesses who need to view transactions, cash flow and account details from any location. The software is robust and convenient to use, with features including invoicing, bank reconciliation and expense tracking. The SB Digital team, looks at some of the features that Xero users may find most useful.

  • Xero app store – The Xero app store is an excellent place to start to explore all the various systems which can integrate with Xero. The apps are sorted into separate categories, and cover a wide range of functions. The app store also has reviews from customers, making it easy to see how useful other users have found the different apps. Honest feedback is always a good thing!
  • Accounts watchlist – The accounts watchlist is a great dashboard tool for quickly viewing selected nominal account values and breakdowns in a single click. The accounts watchlist shows the year to date and monthly values of any desired nominal account (which can be selected in the chart of accounts), on the dashboard. You can then delve further into these balances by clicking on the account values on the watchlist, which will generate an account transaction report for extra detail.
  • VAT return adjustments – Under Xero’s VAT return section, you are able to post manual adjustments to your VAT returns. These can be created so that they adjust return figures as well as having the option to post adjustments to nominal codes. This is a good way to post adjustments which affect VAT but which are difficult to post in the system via invoices or credit notes.
  • Bank reconciliation report – This is a key report in the software package and helps you to quickly identify and clear any differences between your statement balance in Xero and the nominal account balance for a bank account. This accounting report reduces the amount of time spent looking through account transactions and statement lines which may be unreconciled in the system, making year or month end reconciliations that little bit easier.
  • Bank feeds –  Bank feeds is another important part of the digital accounting process. It can be set up in Xero so that bank statement data is automatically imported to be matched to the transactions already in the system. This means that no manual data imports are required to keep the bank feed up to date, and cuts out any manual errors in recording bank statement data, as the system does this all for you. The bank feeds in Xero are simple to set up and connect to a large number of worldwide banking providers, so if possible, I would highly recommend this setting to save yourself time.
  • Bank rules – Bank rules enable Xero users to create and reconcile bank receipts or payments in one click. These can be created for all bank accounts in Xero under the ‘Manage Account’ section, and use keywords in bank references or contacts to prompt the system to create a matching bank transaction, for example, to identify a bank charge that needs to  be created for a bank statement reference containing the word ‘charges’. Once bank rules are set up they are a great time saving tool and help make the bank reconciliation process smoother.
  • Help section – In the top right corner of the screen there is a help section, with a ? icon. Once clicked, a search bar appears which enables you  to search through support articles to help answer any Xero related queries or notes on how the different features of Xero work. This is an especially useful tool for anyone starting out on the system to help gain a further understanding of it.
  • Lock dates – The ‘lock dates’ function can be set in Xero to stop users posting any transactions before any specified dates in the system. This is great for ensuring that no differences or errors in reports are inadvertently created through back-posting transactions, or making any changes to the data in the system before key accounting dates.
  • History and notes – This feature can be found within the advanced section in your Xero system. It allows you to view all the transactional adjustments in Xero made by your users. This is very useful for tracking the  adjustments that have been made, updating data and  or reversing errors. The history and notes function can be filtered by date or user and also lets you review deleted transactions which it would otherwise  not be possible to see..
  • Find and recode – This is another function which can be found under the advanced section of the Accounting tab in Xero. Find and recode is a great tool for bulk editing transactions, so is a great way of quickly rectifying a number of errors. When using find and recode, you can apply conditions to filter through the transitions in the system and select as many or as few transactions as you need for recoding. Find and recode enables you to bulk edit the selected transactions by changing the contact, account, tax rate or tracking category.

Whatever software you are using, our experienced SB Digital advisers can help you review your software and processes.  As an independent and impartial service, SB Digital doesn’t benefit from “selling” you any specific software. Instead, we will take the time to discuss your business needs and current systems, before providing an objective recommendation on what we believe to be the best cloud accounting software and procedures for you. The initial consultation is free of charge and doesn’t come with any obligation.

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