Xero accounting software tips

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Cloud-based accounting software can give you a view of your business finances from anywhere. Here we share a summary of our favourite Xero features to help you run your business more efficiently.

Every SME owner or leader faces the challenge of maintaining a good profit margin. To be as profitable as possible, you need to understand your figures and anticipate any likely costs to prevent budget overruns. Xero accounting software can help.

Xero enables you to create a viable business model with the efficiencies, financing, and systemised processes needed to scale. Plus, Xero helps mitigates the risk of inaccurate figures and offers real-time data on cash flow and other financial performance.

Assessing bookkeeping records can prove difficult for businesses using a ledger or spreadsheet-based accounting system. Spreadsheets make the process of producing an accurate financial report arduous and time-consuming and can lead to costly errors.

If your company uses spreadsheets, your data could be easily flawed. Copy-paste or data entry mistakes and faulty equations are some of the common errors that can occur. Poor data puts you at risk of making decisions based on inaccurate information.

Grenfell James at a Xero accounting software conference — Team Grenfell James at Xerocon, London

Grenfell James is one of hundreds of thousands of accountants and bookkeepers using Xero. Whether you already use Xero or are considering accounting software, our team is here to help.

13 ways to get the most out of Xero accounting software

#1 Bank rules

Xero accounting software can be linked to your bank account, making it easy to do bank reconciliations. But occasionally your bank payments might not relate to a purchase invoice. To speed up the process, you can create Bank Rules for any recurrent transactions.

#2 Find and Recode with Xero accounting software

A fantastic feature is Find and Recode, enabling you to edit many transactions at once. This means you can quickly transfer transactions from one account to another without having to reallocate each transaction. Likewise, you can also change in bulk the tax rate or correct incorrectly assigned to transactions.

#3 File storage

Xero’s File Storage makes file management, sharing, and access easy and convenient. You can attach files to almost anything – from invoices and receipts to bills and transactions. You can also upload multiple files in one go from your computer or mobile phone using the Xero App.

#4 Fixed assets register

With Xero’s fixed asset register, you can automate your depreciation journals. The feature lets you quickly record and calculate book depreciation on your assets and produce the fixed assets report.

#5 Tracking categories

This feature lets you know how separate areas of your business are performing. For example, companies or individuals who can benefit from it are:

Property Investors who can track property by property
Shop Owners who can track by shop location

#6 Item codes in Xero accounting software

Do you sell a range of products or service packages? You can set up Item Codes to include each service or product’s description, price, sales account, and tax rate. Simply select an Item from the drop-down menu, and the description will automatically appear!

#7 Payment services

If you like receiving payments quickly, you’ll love this feature. It enables you to set up an account with Iwoca or PayPal and link to your Xero account. Your customers can pay by card straight from the sales invoice you send them without using BACS.

#8 Xero accounting software quote function

Using Xero Quotes can help you firm up new projects with your customers. Quotes are straightforward to create and email directly to your client’s inbox. Similarly, you can convert the quote into a sales invoice, saving you time.

#9 Repeating invoices

You can save time by using Repeating invoices for sales and purchases in Xero. Handy if your customers pay you a regular, recurrent amount for a service or a monthly retainer. You can also set up Repeating sales invoices to send out during the same period. Equally, you can set up Repeating bills.

#10 Payment dates for payment runs

Xero allows you to add a planned date to a purchase invoice. This a handy feature if you have a daily limit on your bank account. In the awaiting payment tab, just create a planned payment schedule. The schedule will total the value of invoices, giving you complete control over how much money leaves your account.

#11 Lock dates function

You can use Xero Lock dates to set a lock date when a reporting period is complete. Users won’t be able to add or edit transactions if the transaction date is earlier than the Lock date. Plus, it is not a permanent setting; therefore, you can change or remove it anytime.

#12 Bank feeds

This feature allows Xero to import account transactions directly and securely from your bank. You can match this data against your sales invoices or receipts or link it to a category. No more importing CSV bank statements or entering each transaction manually!

#13 Xero accounting software inbuilt calculator function

Xero has an inbuilt calculator that allows you to perform essential math functions directly in specific fields. Using this calculator decreases the chance of an entry error and helps with more complicated accounting formulas.

The inbuilt calculator has addition, subtraction, multiplication, division, and group functionality. To use it, type in an equation — like 15 * 1.12 — right into a field. Then press ‘enter’ or ‘tab’, and Xero will calculate the result. You can use this calculator for transactions as well as manual journals but bear in mind that not all fields accept math functions.