Getting Started with Xero

The Xero Setup Guide

When youve created your organisation in Xero youll automatically be taken through a series of steps to
set yourself up. This guide explains whats required at each step and gives you a list of things you can
collect up before you start to save time once you get going. Print it out as a reference or use the Help
menu on each screen of the Setup process for detailed assistance.
The Setup process is relevant to all of you starting out with Xero and more so if you are converting from
an existing accounting system (even if its a spreadsheet) well help you understand which numbers to
input into Xero so that you can start up where you left off with your previous system.
While you can fly through the Setup process by just inputting the bare minimum so you can start
downloading your bank transactions or sending out invoices straight away, we suggest that you take
the time to complete these steps to save coming back to fix things later. Especially if youre coming from
an existing accounting system your financial reports in Xero might not be right if you dont carry across
the right data. If you are unsure about what data to put into Xero or where to get it from, please ask
your financial adviser. Regardless of how little or how much information you have on hand you need to
complete the Setup process before you can starting using your organisation in Xero.
Where do I start the Setup process?
When you add a new organisation in My Xero (using the Start trial now button for your first
organisation or the Add an organisation button for subsequent organisations) you'll be taken through
the Setup process as part of creating your organisation.

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If you stop the Setup process part way through, your new organisation will be listed in My Xero and you
can click on the organisation name at any time to return to the step in the process that you were up to.

How long does it take?

Honestly, anywhere from a few minutes upwards. It depends on how much data you want to bring into
Xero, how readily available it is and whether or not you need assistance well help you work this out
during the set up phase. You must complete the Setup process before you can use Xero for your day to
day transactions. You can invite your accountant or financial adviser during the Setup process and they
can see what you've entered or complete the process for you.
Can I stop part way through?
As you move on to each step, what youve just completed will be saved and from any step you can exit
the Setup process using the Save and Quit link. Next time you log in to Xero youll be taken back to the
same step to carry on. You can change anything youve entered along the way nothing will be saved
into Xero until youre at the last step and click Finish. If you complete the Setup process without fully
completing some screens, you can still get to all of this information from the Settings menu in Xero.

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The steps
1.

Introduction this guide as a PDF and a couple of video tours of the Setup process

2.

Organisation Settings your organisation name in Xero and on reports and address

3.

Financial Settings your organisation's year end and Activity Statement settings

4.

Invoice Settings your logo, invoice address and invoice numbering sequence

5.

Invite Users allow your financial adviser to log in and help with the Setup process

6.

Currencies choose if you want to use this, and which currencies youd like

7.

Chart of Accounts use Xeros default accounts or import your own

8.

Account Balances the date you want to start using Xero and the balances from your previous
accounting system if you have them

9.

Done commit it all and start using Xero

A checklist of things youll need

In order to fully complete each step of the Setup process, you should organise these things now so that
youre not scrambling when you get to that step! If you dont have this information ready now, you can
just complete what you can of the Setup process and once in Xero, revisit the Setup screens from the
Settings menu as necessary to complete or change it.
Collect or decide on the following:
1.

The legal name and ABN (Australian Business Number) of the organisation to appear on
financial reports.

2.

The organisations financial year end most organisations in Australia use 30 June but you will
be able to provide something different if needed.

3.

Activity Statement Settings for the organisation you are setting up (if it is registered for GST)
Tax File Number, Accounting Method (invoice or payments), Calculation and PAYG Withheld
Period (whether you file monthly, quarterly, or annually), PAYG Income Tax Method and
whether or not you claim Fringe Benefits, Fuel Tax Credits and Excise. If youve filed Activity
Statements with the ATO before, all this information will have been used on your Activity
Statement.

4.

A logo and contact details for your organisation to appear on outgoing (Accounts Receivable)
invoices and credit notes, if you use them.

5.

The email address of your financial adviser or someone that you want to invite during the Setup
process if you need a hand. If you dont have a financial adviser, check out the Business Support
section of our website for a list of advisers who are trained and ready to help you use Xero.

6.

A conversion date and account balances - the date you want to start using Xero from for your
day to day business, and balances for the accounts youve been using up until this date.

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Tips for choosing a conversion date

Youll start using Xero on the 1st of a month which month you choose will depend on how
youre currently managing your accounts and what data you want to bring across. We suggest:

The month your current GST period starts from if you are GST registered, or

The current month if you are not GST registered.

When choosing a month to start using Xero take the following into consideration:

The date you start using Xero can be different to the start of your financial year.

If youve been using another system for managing your accounts up until now, each
account (or category) youve been recording your accounts against will have a balance
for your financial year to date.

The balance for each of the accounts youre currently using is entered against each
account in Xero during the Setup process meaning you dont have to enter and
reconcile of all your transactions back to the start of your financial year. The balances
should be as at the last day of the month before the month you want to start using
Xero. If you have a current accounting system, you should be able to generate a Trial
Balance which will show the balances of all your accounts.

Whichever month you choose, choose one that you are happy to obtain and enter past
data for. Whether you go back to the beginning of your financial year, or to the
beginning of the current GST period, youll need account balances and unpaid invoices
up until the day before your Xero conversion date.

If you have recorded invoices or credit notes in your current accounting system that you
havent yet paid or received payment for as at your Xero conversion date, youll need to
enter these as historical transactions. If you do, it is likely your Trial Balance will show a
balance for Accounts Receivable or Accounts Payable accounts and when Xero see this,
it will prompt you to enter the invoices/credit notes that make up these balances. Each
invoice/credit notes is entered individually so that when you receive and process the
payments once youve started using Xero, you can match them back to these invoices.

Whether or not youve got account balances to bring into Xero youll need to enter all
your existing invoices and transactions back as far as the date youve chosen to start
using Xero once the Setup process is complete. If cash or invoice payments have been
processed through your bank account you can download these and reconcile them
what youve entered into Xero depending on how far back your Xero conversion date
is, make sure your bank allows you to import data back that far. If you do start with
Xero several months ago, we suggest you reconcile one month at a time to save having
to deal with possible large lists of statement lines.

You can also choose the start of the following month as a conversion date if you want
to get Xero set up prior to the month you want to start using it on a day to day basis.

If you choose a conversion date that is part way through your current GST period you
wont be able to use Xero to generate an accurate Activity Statement for that period
because Xero wont have all the relevant transactions to calculate the GST from.

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7.

Your Chart of Accounts or a list or an idea of categories you might want to organise your
accounts by e.g. Rent, Stationery, Sales. Xero has a default Chart of Accounts (list of coded
account categories) which you can use or customise. You can also import an existing Chart of
Accounts from another Xero organisation. Make sure you have on hand the bank account or
credit card numbers for any bank accounts you want to set up in Xero.

8.

The data and reports youll need for entering and checking so that Xero matches what you have
recorded in your current system. Youll need:
a.

All the invoices and credit notes that are outstanding from your previous accounting
system when you convert to Xero i.e. the amount owing to you or you owe as at your
conversion date. These are the items that make up your Accounts Payable and Accounts
Receivable balances. Youll also need the total amount of any uncleared funds (e.g.
unpresented cheques) - this is essentially the difference between your actual bank
account balance, and the bank account balance you have recorded in your current
accounting system.

b.

Reports (if you have them) detailing balances as at the day before your Xero conversion
date so that you can just copy the balances into Xero e.g. Trial Balance or Balance Sheet.
If youre not sure how to work out your balances, you should ask your financial adviser
for help. If you have balances to enter into Xero its better than you get them right at
the start.

c.

If you dont have any reports, use the balance of any bank accounts or categories that
you have.

How to complete each step

Introduction
Familiarise yourself with the Setup process by watching the Getting Started video tours (you can just
watch them on screen within Xero, you dont need to download anything). The videos show an example
of setting up an organisation in Xero that doesnt currently have an accounting system, and one that
does.
Note the brief points given for each step are intended to provide you with some pointers on how to
complete each step for a typical organisation. You may or may not need them depending on how
complex your current accounting system is. Each step refers you to the full online help in the Xero Help
Centre (http://help.xero.com) where you can get very specific information for each screen youll be
using which you should use if you are unsure or have a specific scenario not covered in this quick guide.

Organisation Settings
Enter your organisations name and address:
1.

Legal Name & organisations address.

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2.

Australian Business Number (ABN)

3.

In Xero, you can access this information again to edit or complete it from Settings > General
Settings > Organisation Settings.

4.

View the Organisation Settings help.

Financial Settings
Enter financial information used in the production of invoices and reports, especially tax settings if you
need to record and file Activity Statements:
1.

Change the financial year end if the default 30 June is not right for your organisation.

2.

Activity Statement Settings/GST Information (you'll be prompted on this screen to confirm if

you're registered for GST).

3.

Choose a time zone (this is for time stamping the audit trail of changes made to invoices and
determines the date for running reports.

4.

In Xero, you can access this information again to edit or complete it from Settings > General
Settings > Financial Settings.

5.

View the Financial Settings help.

Invoice Settings
You can skip this step if you dont send out invoices and credit notes otherwise enter the details youd
like to appear on the invoices and credit notes (that you send directly out of Xero) that your customers
receive:
1.

Your organisation name and contact details (especially useful if you want to use a different
address than your main company address for invoices/credit notes).

2.

A logo youll need to provide an image file just follow the instructions for uploading on the
Invoice Settings screen.

3.

A starting point for your invoice/credit note numbering sequence if you dont want to use the
Xero default.

4.
5.

Payment terms (or other default text you want to appear on all your invoices).
In Xero, you can access this information again to edit or complete it (even if you skip this step
now) and access options to customise the format of your invoices as PDFs from Settings >
General Settings > Invoice Settings.

6.

View the Invoice Settings help.

Invite Users
You can skip this step if you dont want to invite anyone else to log in during the Setup process. The
remaining Setup steps require some accounting knowledge (depending on how youre currently
managing your accounts) so its a good idea to invite your financial adviser now if you need help. Its
easier for them to correct what youve done (if need be!) before you complete the Setup steps.

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1.

For each person you invite, youll need just their email address and name.

2.

You should choose the Financial Adviser option when entering their details so that once the
Setup process is complete theyll have the necessary access rights to correct anything that
might need further adjustment.

3.

You can choose the option to Invite Xero Customer Care during the Setup process (or any time
in Xero) if youd like us to log in to your organisation to help with an aspect of the product
youre not sure of. Your financial adviser or accountant remains your first point of contact for
how you should actually do the accounting for your business.

4.

In Xero, you can invite your financial adviser (if you dont invite them during the Setup process)
and all the other people you want to access your accounts from Settings > General Settings >
Users.

5.

View the Invite Users help.

Add multi-currency option

If you do business in other countries and would like to have foreign currency bank accounts or issue
foreign currency invoices youll need to choose the right pricing plan now.
1.

Multi-currency is only available on the Large pricing plan.

2.

If you are setting up a trial organisation or have already chosen a pricing plan that is not the
Large plan, you will need to change to this plan now.

3.

Once you are on the Large plan you can add the currencies you require in your organisation.

4.

View Multi-currency settings help.

Create a Chart of Accounts

Use Xeros default Chart of Accounts or import one of your own so that you have all the accounts that
youre used to using set up in Xero to record (or code) your transactions against.
1.

If you want to use Xeros default Chart of Accounts take a quick look to make sure all the
accounts you need are included You can make any changes necessary so it suits your
organisation by adding, editing (codes or account names or both) or deleting accounts.

2.

You can import a Chart of Accounts as a Comma Separated Values file (CSV). There are a couple
of options to import:
a.

Xeros default accounts as a CSV with changes youve made to it if you want to create
your own this is a good place to start if you are using another accounting system and
you want to recreate its Chart of Accounts. As long as you use the Xero default accounts
as a basis i.e. stick to the same account types, and system accounts you can essentially
replace all of Xeros accounts with your own.

b.

A Chart of Accounts that has been exported from another Xero organisation.

c.

An MYOB Chart of Accounts exported from MYOB as a text (.TXT) file. Xero currently
supports importing from MYOB Accounting 18, MYOB Accounting Plus 18, MYOB
Premier 12. If you import an MYOB file, you can choose to import the accounts with
balances or without. Note that MYOB has several GST account and these (and any
balances) will automatically be merged into the one GST account that Xero uses.
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3.

If youre importing a Chart of Accounts we urge you to check and tidy your accounts in that
system (because youll be more familiar with it than Xero) before exporting it for import into
Xero (well provide guidelines for doing this). During the import youll be shown a summary of
what Xero will import so youll have a chance to change your file and import it again if
necessary.

4.

You should include at least one bank account in your Chart of Accounts (whether you add it to
the Xero default Chart of Accounts or import it) although you can proceed without one. Youll
need to provide the bank account or credit card number.

5.

If you have balances or transactions that you want to bring into Xero from another accounting
system, its important that you make sure you have got the appropriate accounts set up now.
This will save you having to come back and do this when youre asked for your account balances
during the next step.

6.

Any reports you generate from Xero use the Chart of Accounts as a basis so if you want
particular accounts to display in your reports, this is another reason you might want to review
and set up the Chart of Accounts now.

7.

In Xero, you can make changes to the Chart of Accounts youre choosing now (or import again)
from Settings > Chart of Accounts.

8.

View the Chart of Accounts help or help for Importing a Chart of Accounts.

Enter your Conversion Date & Account Balances

Conversion Date:
Enter the month youve chosen to start using Xero on a day to day basis. If you imported an MYOB file
with accounts youll skip this step because you will have already provided a date.
Account Balances:
Enter the balances you have from your existing accounting system including your bank account
balances. Depending on the Conversion Date chosen Xero will prompt you with the last day of the
previous month as the date you should enter balances for. Typically youll be entering figures straight
off your Trial Balance. If you dont have any balances to enter, leave the accounts balances as 0.00 and
move to the final step.
In Xero you do not need to journal entries to create opening balances, you simply need to enter the
balances you have from your existing accounting system into the Account Balances screen. You can
enter balances for previous financial years after completing the Setup wizard by entering Comparative
Balances
1.

Use Add new line to add each account from your Chart of Accounts and input the account and
bank account balances (as debits or credits), reconciled and as at the day before your conversion
date. If you imported an MYOB file with balances, all the accounts and balances will already be
listed for you to review.

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2.

If you have invoices or credit notes for which payment has not yet passed through your bank
account these will already be included in the balances youre entering (i.e. Accounts Receivable
and Accounts Payable) Xero will prompt you to enter the individual invoices/credit notes that
make up these balances so that you can reconcile them later in Xero when you receive payment.
If you dont have the invoices and credit notes to hand, you can leave the balances as 0.00 and
complete the Conversion Balances screen in Xero after the Setup process is complete. If you
have a lot of historical invoice data to enter, you can choose to leave the invoice balances at
0.00 and import your invoices once the Setup process is complete.

3.

If you have fixed asset or accumulated depreciation balances to bring from a previous
accounting system, enter these balances as at the day before your conversion date in the same
way as for other balances you're bringing into Xero. Once the Setup process is complete, fixed
assets and depreciation can be entered into the Fixed Assets register in Xero, whether these are
assets you held at the beginning of your financial year or in the time between the start of your
financial year and conversion date to Xero (if you're not starting with Xero at the beginning of
your financial year). If you have unpaid invoices for fixed assets, these assets will be
automatically entered into the fixed asset register when you enter historical invoices to match
your Accounts Payable balance entered as long as you choose a fixed asset account when
entering these invoices.

4.

If you have a balance for uncleared funds (i.e. youve recorded non-invoice transactions in your
current accounting system but the money hasnt passed through your bank account yet) add a
Current Asset account called Uncleared Funds and enter the balance against it. Once you
receive these funds you can create the corresponding cash transaction(s) in Xero to match this
balance.

5.

Xero only has one account for GST. If you have used more than one GST account in your current
Chart of Accounts, add these balances together and enter this as the starting balance into
Xeros account GST. If you have imported an MYOB file the GST accounts will have been
merged automatically and the individual GST account balances already totalled and entered
against the Xero GST account.

6.

If your debits and credits dont match, the difference will be recorded as an historical
adjustment which your financial adviser can correct during the Setup process or later.

7.

If all you have is a bank account balance, enter this and leave the other side as an historical
adjustment for your financial adviser to redistribute later.

8.

If you want to use the multi-currency option in Xero and have outstanding invoices or a bank
balance in other currencies you can enter these balances in their original currency. Make sure
you have the exchange rate at which these balances were arrived at on your conversion date as
youll need to enter this when you enter your foreign currency balances.

9.

In Xero, you can get to this information again to update your conversion date or account
balances from Settings > General Settings > Conversion Balances.

10. View the Conversion Date and Conversion Balances help (enter Conversion Balances for foreign
currency accounts), or Import invoices help.

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Outstanding (historical) Invoices:

If no balance was entered for the Accounts Receivable or Accounts Payable accounts, you wont be asked
to enter outstanding invoices or credit notes and you can move onto the final step.
If you entered a balance against Accounts Receivable and/or Accounts Payable, youll be prompted to
enter the individual invoices/credit notes that make up these balances. These are the invoices/credit
notes that are currently unpaid with an invoice/credit note date before your conversion date NOT those
with a date after your conversion date which youll need to enter into Xero after you have completed
the Setup process.
1.

Enter each invoice/credit note that makes up the Accounts Receivable or Accounts Payable
account balance entered.

2.

Keep the invoice/credit note number, account(s) and tax rate(s) the same as when it was
entered into your previous accounting system. Xero will default the invoice/credit note date to
the day before the conversion date you've chosen and you should leave it at this. You can
change the date as long as it remains before the conversion date. Enter the outstanding
amount as at the date you are converting to Xero (this might not be the original invoice/credit
note amount if the invoice/credit has already been partly paid).

3.

Once in Xero youll see these invoices and credit notes listed on the Awaiting Payment tab in
Accounts Receivable or Accounts Payable where they can be processed when payments are
received or made.

4.

In Xero you will only be prompted to edit these historical items if you make a change to your
conversion date or balances.

5.

View the Add Accounts Receivable Invoice help, Add Accounts Receivable Credit Notes help, Add
Accounts Payable Invoice help or Add Accounts Payable Credit Notes help.

Done!
Before you give your Setup information the big tick you have a chance to go back and review and
change anything youve entered and its not too late to invite your financial adviser in to take a look at
what youve done. Once you click Finish, Xero will create all the necessary journals behind the scenes
and youll be ready to start using Xero. If you have a Trial Balance from your current accounting system
its a good idea to go straight to Xeros Report menu to generate a Trial Balance Xeros version should
match the one you already have.
If you need to make any changes to the information you added during the Setup process you can access
the same screens again from the Settings menu. NOTE: your accounts are automatically locked as at
your conversion date so that your Setup data cant be inadvertently changed. If you do need to change
it, only a user that has Financial Adviser permissions (access rights) can do this. You can access your
own user information to change your permissions to this if necessary, from Settings > General Settings >
Users.

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What next?
Now you are ready to start using Xero on a regular basis to record and report on normal business
transactions. There is full online help and tips on each screen in Xero if you need them. Its really up to
you what you do next. How about:

Add invoices, transactions and expense claims.

Set up repeating invoices for those invoices you regularly send or receive.

Import Contacts or add to Contacts the people you regularly transact with.

Set up your bank accounts (if you havent already).

Import your online bank statements from the date you started using Xero and reconcile them to
transactions already created or create them as you go. If your conversion date is a while ago, we
recommend you download your transactions month by month so theyre easier to keep track of.

Set up tracking categories (cost centres).

Create a Price List of things you regularly invoice your customers for.

Create a budget.

Run reports over your data.

Use My Xero to change your password, add another organisation or manage your billing plans.

Your Dashboard is the first thing youll see and it includes an introductory tour of the dashboard and
Xero features view the Dashboard help.
Help

At any time on any screen in Xero you can get help for that screen from the Help menu.

All the screen help and more is also available on its own searchable website
http://help.xero.com you dont even need to be logged into Xero to have access to this.

In Xero, send us feedback, ask a question or tell us about any issues from the Help menu using
the Contact Support option or email us at any time on [email protected]

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