Summary
Highlights
Xero is a popular cloud-based accounting software for small and medium-sized businesses worldwide, originating from New Zealand. It helps manage business accounts, transactions, and taxes efficiently.
To get started with Xero, visit xero.com and navigate to pricing. Xero offers three plans: Starter for micro-businesses, Standard for growing small businesses, and Premium for larger entities. A 30-day free trial is available for all plans. The tutorial focuses on Xero from a small business owner's perspective.
After signing up, you'll be taken to your dashboard. Navigate to 'Settings' to configure vital account details. Fill in 'Organization Details', add administrative users, manage currencies, and connect third-party apps like CRM, payroll, or time tracking software. Customize 'Invoice Settings' by creating templates, adding logos, contact details, and payment options (PayPal, bank details).
In 'Payment Services', add new payment options to allow customers to pay invoices using credit/debit cards or digital wallets. Optimize 'Email Settings' by setting up your reply-to email address and email template content. You can also manage payroll settings and connect your Xero account with other Xero accounts of suppliers or customers for automated processes.
Go to 'Accounting' then 'Bank Accounts' to connect your business bank account with Xero. This creates a seamless integration, automatically importing transactions, which only need to be reconciled later. This eliminates manual data entry and streamlines bookkeeping.
The Xero dashboard provides a snapshot of accounting activities, including bank accounts, account watch, invoices owed, bills to pay, cash flow, and expense claims. You can edit the dashboard to show or hide widgets, rearrange them, and add additional reports like business performance ratios for a customized overview.
The '+' icon at the top offers quick access to create new invoices, bills, contacts, quotes, purchase orders, manual journals, spend/receive money, and transfer money. Under 'Business', you can access analytics like short-term cash flow and business snapshots to track performance year-to-date, including profit and loss, income, and expenses.
The 'Business' section allows management of 'Cash In' activities. 'Invoices' lets you manage all invoices, view their status (awaiting payment, draft, paid), and filter them. You can send reminder emails for overdue invoices and customize messages. Create new invoices by adding customer details, dates, invoice numbers, and line items, then approve them.
Similar to invoices, the 'Bills to Pay' section under 'Business' manages 'Cash Out'. You can create new bills and oversee expenses. Other sections include 'Expense Claims' and 'Products and Services', where you list and manage all items your business sells, including purchase and selling details.
Under 'Accounting', you can manage all financial reports, including important starred reports and a searchable list. The 'Profit and Loss' statement allows comparison of periods. Reports can be saved as drafts, published, custom reports, and exported as PDF, Excel, or Google Sheets. It's recommended to connect your accountant to Xero via the 'Advanced' section. 'Payroll' allows management of employees, leave, timesheets, and payroll processing.
'Projects' allows you to view all projects, time entries, and staff time overviews, with options for draft, in progress, and closed projects. A basic timer is available for time tracking. 'Contacts' centralizes the management of all customers and suppliers.
The 'Reconcile items' feature (found on the dashboard or under 'Accounting' > 'Bank Accounts') helps match transactions imported from your bank account with appropriate accounts in Xero. For matched transactions, simply click 'OK'. For unmatched transactions, manually add details like contact name, account to code to (e.g., Advertising, Bank Fee), description, region, and applicable taxes (like GST). Xero learns over time, making this process quicker.
The top navigation includes quick actions, search functionality for information and resources, notifications, and a help section with articles and 24/7 online support. You can also connect favorite apps and customize your personal profile.