Xero tips and tricks

Here at Top Edge, we’re big fans of Xero. To illustrate why, we’ve collated numerous Xero tips and tricks that will save you time, and in some cases money!

Xero is great for not for profit organisations for many reasons. Many NFP’s don’t have a fixed office space or have a ‘jack of all trades’ administrator that does everything. Either way, Xero’s access and ‘follow your nose’ philosophy makes things simpler!

Not everybody uses Xero, but a lot do, so keep reading if you are one of the many making use of great, kiwi-made technology. You may find a use for one of our Xero tips and tricks!

Charitable discount

Not everyone knows this, but Xero offers a 25% discount for not for profit entities. Ask Xero to apply the discount by lodging a ticket with Xero support. You’ll need to provide proof of your status, whether that’s your Charities Services or Companies Office (for incorporated Societies and Charitable Trusts) extract. Download and attach it to the ticket and within 24 hours Xero should have applied the discount.

Contacts

Along the way through creating transactions, you create contacts. Transactions are still linked to the contact, even if the contact profile is incomplete. This can mean quick and easy access to past transactions, instead of trawling through account codes looking for a bill from last year. Alternatively, you may want to load an invoice or a bill for someone you did the same for a month ago. The details might be different, but the descriptions, accounts, GST codes etc might be the same.

How? Simply locate the last invoice or bill through the contact, and then toggle to Bill Options – Copy, make any adjustments and you’re done!

Spend/receive money vs bills/invoices

Do yourself a favour, and load invoices and bills before receipt and payment. Not only will your accountant and auditor love you, but you’ll save yourself time, even if loading these feels like a nuisance when doing them. When you load future transactions into Xero, the benefits are almost endless:

  • You can then create payment batches which integrate to your bank platform
  • Your bank reconciliations become a walk in the park. Why? Xero makes suggestions that are often right, based on what you have loaded in.
  • If you attach supporting documents to your invoices and bills, your auditors can simply be given read only access, and can then do the bulk of their testing by themselves, without bothering you. This alone can save you hours!

If you insist on operating in real time and only creating transactions when they hit or leave your bank account, then please, please make sure you aren’t paying for the Standard Xero package, and are on the cheaper Starter package – https://www.xero.com/nz/pricing/

GST

Find yourself continually adjusting the GST for a certain account when raising or processing transactions? The default GST option for that account might need changing! Head to Accounting – Chart of Accounts, locate the account, click on it, and then adjust the GST field.

Tracking categories

Ever thought that coding would be easier if there was another option, other than just the account selection? This is exactly what tracking categories are for. Think things like departments, regions, programmes, activities etc.

Many Xero users aren’t making use of tracking categories. Or, they might be using them, but not as well as they could be. Xero allows up to 4 tracking categories, but only 2 of these can be active at any given time.

Once setup, reports can be created so that you can review actual performance by tracking category. You might need your accountant to help with setup and monitoring, but you can find tracking categories in the advanced area of the accounting dropdown.

Drawbacks

Despite all the good stuff, Xero isn’t perfect. We’ve stumbled across a couple of bug bears that are a real nuisance!

  • The lack of any real cash flow forecasting tool within Xero. The cash summary and statement of cash flows reports try their best, but both are backward looking which isn’t anywhere near as useful. Cash flow forecasting add-ins are available, but in some ways, this takes away from the beauty of Xero – a cheap, easy, one stop shop for all things!
  • The lack of a customer ledger to capture prepayments, overpayments etc as well as invoices and credits. In some cases, this makes it almost impossible to know with certainty how much your customer base owes you, or is in credit by, if some of their transactions aren’t picked up and held within the contact record.

Feedback

Let us know if any of our Xero tips and tricks have proven useful. If you’re using some of these already then great, you’re on the right track and likely have great records and a workable finance system. If we’ve missed something, reach out as well so we can spread the word!