Xero

User Guide
Contents
Customisable Dashboard........................................................................................................... 3
The + Button...................................................................................................................................... 4
Find and Recode............................................................................................................................. 5
General Settings.............................................................................................................................. 7
Contacts............................................................................................................................................... 8
Quotes and Sales Invoices......................................................................................................... 9
Purchase Orders and Bills......................................................................................................... 12
Bank Reconciliation...................................................................................................................... 16
Files........................................................................................................................................................ 21
Helpful Tips........................................................................................................................................ 23

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Customisable Dashboard
Xero’s dashboard is the main screen for each organisation in Xero.
It displays a snapshot of your organisation’s financial position based
on transactions entered into Xero. Use the dashboard to directly drill
down into a transaction, or perform common tasks quickly.

Account watchlist – If you would like to keep an eye on the balance of key account codes in your chart
of accounts (excluding bank accounts), you can display them on here. The table displays the current
month and year-to-date figures of your chosen accounts.
Bank accounts – You can add an unlimited number of bank accounts to the dashboard. You can
also choose the order that these display in and change this when necessary. Each bank account has
a reconcile button and the number on this button identifies the number of unreconciled transactions
in your bank on Xero.
Invoices owed to you – This is an overall summary of sale invoices still outstanding on Xero. You can
create new sale invoices from the button that displays ‘New sales invoice’.
Bills you need to pay – This is an overall summary of bills still outstanding on Xero. You can create
a new bill from the button ‘New bill’.

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The + Button
On the Xero dashboard you will also find a + button. Here you can
access a multiple of functions quickly and easily without having to
navigate from page to page.

Clicking on this button opens a drop down menu in relation to where you are in Xero and will give you
the option to:

• Create a new invoice

• Create a new bill
• Create a new contact
• Create a new quote
• Create a new purchase order
• Create a new journal
• Spend money from the bank account
• Make a payment to the bank account
• Transfer money from bank accounts

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Find and Recode – for adviser access only
The find and recode section is a handy tool to make adjustments
quickly. It can be found under the Accounting tab in the dashboard
under Find and Recode.

Once selected it will show you a history of recoded transactions or you can click the ‘Find and Recode’
button to start a new process.

Click on ‘+ Add a condition’ and fill out the search criteria to locate the item you wish to recode.

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This will then bring up a selection of transactions to choose from. Select one or multiple transactions
and click ‘Recode’.

Here you will get given the options available to change, if you don’t wish to change part of this transaction
then leave it blank. Fill in the relevant fields and hit ‘Review’.

You are then asked to confirm the recode, please check at this point that this is correct – if so, hit ‘Confirm’.

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General Settings
Xero should now be all set up for you and ready to use. Settings isn’t
somewhere you will be using on a regular basis, in fact you shouldn’t
really need to use it at all.
If anything within the setting needs amending we would advise you to contact a manager and they will
assist you with this. However there are some areas you may require to use within settings.

Items that you may use are:

Organistation details – This will be all set up, information will only ever need to be changed in here if
you change any details of the company such as; address, logo, financial year, VAT registration. If any of
these require updating we would advise you to contact a manager and they will do that for you.
Users – People with access to the Xero organisations.
Currencies – Manage the currencies your business uses.
Connected apps – Add and manage third party connections to Xero.
Invoice settings – Set up invoice templates, add a logo, add payment services and set up invoice reminders.

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Contacts
On the contacts screen you can create your customer and supplier
contacts. The contacts screen lists all Customers, Suppliers, Employees
and Archived contacts. A contact in Xero can be both a Customer and
a Supplier. In other words, a separate record does not need to be set
up. One contact record holds both types of transaction.

From this screen you can:

• Add a new contact (select the green ‘add contact’ on the right).
• View contact details and activity (just click within the client).
• Update contact details (e.g. client has changed their address, just click within the contact and select
‘edit’ on the right). When raising sales invoices please be aware it is the ‘contact name’ within these
settings that will appear on the top of the invoice. You can also enter their bank details (suppliers)
to be able to export a batch payment for payment of invoices.
• Merge contacts (if more than one contact is created for one entity, tick all the relevant contacts,
options, merge. This will then put all the activity from all contacts into one).
• Group contacts (good for batch invoicing), just select ‘new’ next to groups, give the group a name,
tick all the contacts you would like to put into the group, options, add to group.

You can also add a basic contact when entering either a sale or purchase invoice, however this only
includes the company name, it will not include the contact’s address, telephone number and other
details. These can be added later on within the contacts tab.

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Quotes and Sales Invoices
Within Xero there is a sales page, just click on Business and there
will be a dropdown to sales (called Sales Overview). This shows a
summary of money coming in and customers owing money.

Here you can access all the following information:

• Draft invoices/quotes
• Invoice/quotes awaiting approval/sent
• Quotes accepted
• Quotes expired
• Invoices awaiting payment
• Invoices overdue

All of the above show as summaries on the page and are able to go into further to look in more detail.
You can also access the following:

• Paid invoices
• Repeating invoices
• All quotes/invoices, including converting quotes to invoices
• Create a new invoices, repeat invoices, credit notes and quotes

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Creating a quote – for client use

Enter all the correct information:

• Customer – The name of the customer (if never used before enter the full name and select new contact)
• Date – Date of quote
• Expiry date – Date you would like the quote to expire
• Quote number – Quote number (this generates the next number along automatically)
• Reference – Any additional reference you would like to enter (optional)
• Description – Details for the customer
• Unit price – Price per on individual unit
• Discount – Enter discount percentage
• Account – The sales code you would like this to be posted against if transferred to an invoice
• Tax rate – 20% if you are VAT registered
• Region/project – Select the relevant tracking category, if applicable
• Amount GBP – Automatically calculate per prior information
• Add new line – If required
• Terms – Enter any other information you think is relevant for the quote

This can then be saved as a draft (blue button on the bottom left) or sent to the customer (green button
on the right). If sending to the customer, enter the email address that you would like the quote/invoice to
be sent to and change any details within the automated message, then click ‘send’.

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If your quote then gets accepted you can reflect this in Xero, once you are looking at the quote you
have created:

• Click the options dropdown in the upper right

• Select mark as accepted

Now you can create an invoice from the quote:

• Click the green ‘Create Invoice’ button

• Tick the box marked as invoiced
• Click ‘Create’
• Review the new invoice for accuracy
• Select a due date for the invoice
• Select what account code you would like the sale to be posted to
• Click ‘Approve’

Creating a new invoice:

As you have already seen you can enter a new sales invoice straight from the dashboard. You can also
enter them from the invoice page directly.

It is exactly like entering a quote. In the reference section any internal reference can be entered e.g. the
sales order number, however this is optional.

Invoices can be sent straight to customers by from Xero, a message will be generated automatically but
this can be changed before sending.

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Purchase Orders and Bills
Within Xero there is a purchase page, just click on Business and
there will be a dropdown to Purchase Overview. This shows a
summary of upcoming bills.

Here you can access all the following information:

• Draft bills/purchase orders

• Bills/purchase orders awaiting approval
• Purchase orders approved
• Bills awaiting payment
• Bills overdue

All of the above show as totals on the page and you are able to go in to look in more detail. You can also
access the following:

• Paid bills
• Repeating bills
• Billed purchase orders
• All bills/purchase orders
• Create a new bill, repeating bill, credit note and purchase order

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Creating new purchase order:

Enter all the correct information:

• Contact – Name of the supplier

• Date – Date of order
• Delivery date – Estimated date
• Order number – Purchase order number
• Reference – Any Additional reference
• Description – Details of the order
• Quantity – Number of units
• Unit price – Cost individually
• Discount – Any discount percentage
• Account – The expenses code relevant to the purchase
• Tax rate – Select the correct vatable choice
• Amount GBP – This will automatically calculate
• Add new line – use to add additional items

This can then be saved as a draft or saved to wait approval. If approved you can then view this within
purchase orders – approved, you can then send this to a supplier.

This purchase order will stay in approved orders until it is either billed or deleted. If an order has
then been billed, you can transfer this into a bill. Go into the order and mark as billed and select ‘copy
purchase order to a draft bill’. This will then transfer the information from the purchase order and put
it into a bill template, ready for you to complete.

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Creating a new bill:
As you have already seen you can enter a new bill straight from the dashboard.

Not all bills will start as a purchase order. New bills should be entered only when a purchase invoice
has been received so all information on the bill is entered correctly reflecting the invoice received.

It is exactly like entering a purchase order. In the reference selection create a generic bill number, this
number will then be put on the corner of the purchase invoice and kept in a file. This can help with cross
referencing in the future.

Repeating bills:
If you have any bills that repeat and have the same amount you can set a bill to repeat automatically. You
enter all information like a normal bill, however there is some additional information:

• Repeat this transaction every – Select how often you would like to repeat the bill
• Bills date – The first bill date
• Due date – Date the bill is usually due
• End date – When to stop the repeating

Save as draft/approve – if you are 100% sure that the repeated bill will always match the invoice received
then select ‘Approve’.

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Batch payments:
Not all bills are paid individually sometimes one payment is for a number of bills. In this case you can
add a batch payment to bundle multiple bills into one payment transaction.

Create a batch payment:

• Go to accounts then click ‘Purchases’
• Click the ‘Awaiting Payment’ tab
• Tick the boxes of the bills you want to match to the payment
• Click ‘Batch Payment’
• Click ‘OK’
• Enter the payment details (date the transaction as it is on the bank statement, the bank account you
want to pay out of and add a reference for your records) and then click ‘Make Payments’

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Bank Reconciliation
Bank reconciliation is when you match statement lines from your
bank account with transactions you create in Xero. You can manage
your bank account straight from the dashboard, however within
Xero there is a bank accounts page – under Accounting.

Here you can see all your bank accounts and their:

• Balance as per the bank statement

• Balance of the bank within Xero (from the transactions you have reconciled)
• Number of transactions still to be reconciled

From this screen you can also:

• Add a bank account

• Transfer money between bank accounts
• Create bank rules
• Manage the bank account
• Reconcile the bank account

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When you are ready to start reconciling your bank account, just select the ‘reconcile * items’ button.

Xero automatically matches transactions in Xero with statement lines where it can (highlighted green).
However, this isn’t always correct, so it is important to always check. So to try to match your bank
statement lines with your account transactions. You can choose whether to:

• Match – Accept the match Xero suggests by pressing ‘OK’

• Change the match and reconcile – By pressing ‘Find & Match’
• Create – Create your own transaction in Xero to match to the bank transaction
• Transfer – This is only relevant when transferring money between bank accounts on Xero
• Discuss – To leave a note/comment

Once you tick ‘OK’, the transaction will then be removed from the list and you can move on to the next one.

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Only a small handful of transactions on the bank statement should require you to use the create tab, as
all income and expenditure should have supporting documents that if on Xero will match to the bank.
Some potential transactions that may not have a receipt include:

• Bank interest/charges
• Insurance
• HMRC payments – VAT & PAYE
• Staff wage payments
• Loan/HP payments
• Drawings

In this case it is important to fill the following information:

• Who – Who the money has been received/paid to

• What – What account code to assign to
• Why – Any detail about the transaction
• Tax rate – Rate of VAT on transaction

In future Xero will recognise and suggest where you would like the transaction to be posted this is based
on a previously reconciled transaction with similar details. Xero suggests the who, what and why, so the
transaction is ready to reconcile.

Bank rules:
If you have a similar reoccurring transaction (for example bank charges) you can set up a bank rule so
Xero suggests a new transaction for you, which saves you from having to create a transaction manually.
How bank rules work:

• Xero uses conditions you set to match against information on your bank statement lines to decide when
to apply the rule. Your rule may be simple, with only one or two conditions, or complex, with multiple
conditions that evaluate several pieces of information.
• Every bank rule must have at least one condition, but you can add as many as you need to build the
rule. You cannot delete the last condition in a rule.
• If you create a bank rule when you’re reconciling, Xero will automatically add conditions based on the
statement line, using an ‘equals’ comparison on the values from the fields in the line. Any conditions
that you add will also use information from the statement line if possible.

How to set one up:

On the bank accounts page you were originally on, there is a button to bank rules. Here you can view all
the bank rules that have been set-up, create new rules and edit/delete existing ones.

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Creating a new bank rule:
There are two types of bank rules:

• Spend money (payments out)

• Receive money (money in)

1. Creating a bank rule means creating certain search conditions. Set conditions about payee,
description, amount, reference. When a bank statement line meets the conditions, Xero will apply
the bank rule. For example – every month you pay a member of staff their wages and on the bank
statement it will appear with their name. Select description, equals, ‘Tom Smith’. You can set as many
conditions as you need.

2. You then need to set a contact, this can be entered later on the reconciliation. If you enter the existing/
new contact it will match it automatically, for example ‘Tom Smith’.

3. Set fixed line items (where you would like the cost to be posted). This would be for transactions where
the payment amount is the same figure each month for example – insurance.

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4. You can also set line items and/or allocate amounts based on a percentage figure (if unknown). This is
for reoccurring payments of different amounts. For example – the payment to ‘Tom Smith’ is to pay his
wages, enter the relevant information:

• Description – Tom Smith monthly wages

• Account – Net wages
• Tax rate – No VAT
• Percentage – 100%

5. Setting a reference – What part of the bank statement line (transaction) would you like to be set as the
transactions reference within Xero? This can be done during the bank reconciliation.

6. Apply a bank rule to a specific bank account or to all bank accounts.

7. Always give your rule a meaningful title. Because other people may reconcile these lines and a
meaningful title helps check the correct bank rule has been applied. In this example the title would be –
‘Tom Smith Monthly Wages’.

8. Save.

This should now be all set up and will be introduced into the bank reconciliation.

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Files
Xero let you attach files to bills, purchase orders, sales invoices and
contacts. You can also upload files to expense receipts, fixed assets,
accounts in your chart of accounts and manual journals.
You can upload and attach files directly from the transaction screen. However, best practice would be to
add the file to the library and then attach to the transaction screen when entering the transaction.

Files library
Over time, you are likely yo upload hundreds of files. Saving each file to a suitable folder in the files library
allows you to find them more easily later on.

Here you can:

• Upload files
• Take photos
• Create new file folders
• Manage files/folders

Email a file to the file library inbox:

Xero gives your organisation a unique email address for your file library’s inbox. This means you can
email files directly into the inbox. You may also want to share this email address with your colleagues so
they can also email files to the inbox.

To find the unique email address:

1. Click the company name and select files from the dropdown menu.
2. Xero displays the unique email address at the top-right of the screen as per below:

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Attach files directly
You can also attach files by uploading them directly from anywhere you see the file icon. Click the file
icon and then click on the ‘Upload Files’ link. Browse to the file you want to upload, select it and then
click ‘Open’. You can also drag a file directly onto a screen. Locate the file, click on it (to select it) and
then drag and drop the file onto the Xero screen.

To attach the same file to more than one transaction, you’ll need to upload the file for each transaction
that needs it, or you’ll need to create each transaction directly from the file library.

We would recommend all purchase invoices are scanned in electronically and attach to the invoice within
Xero so the receipt can be accessed easier. This allows everyone to be able to view the receipt, so if we
have any queries regarding a purchase we can have a look without contacting the client to send us the
receipt saving time. These can be added as above or by going into the bill and selecting the little page
icon ‘Upload Files’.

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Helpful Tips
Chart of accounts
• You may need to enable an account for payments that is not a bank account, like the directors loan
account for instance, to offset expenses paid by the director. Here you can tick enable payments on the
account code. Once enabled you will then be able to mark invoices as paid by the directors loan account.

Contacts
• Customer and supplier addresses automatically link to Google Maps so you can easily see where they
are located. You can also add their Skype name to speed dial them directly.

Quotes/sales invoices
• ‘History & Notes’ is located at the bottom of the sales invoice screen. The show history button shows
an audit trail of any changes made for the selected sales invoice like, who created the invoice, who
approved it, whether it has been sent or not or viewed online by the customer. Use add note/expected
payment date button to add a note or an expected payment date for the invoice.

Copy a similar invoice

• To quickly re-enter an invoice or bill, copy it from one you’ve already created – all fields will populate
with the original information you entered. You can then edit the invoice or bill where required.

Reconciling bank accounts

• When matching a statement line to invoices and there is a small difference left over you can use the
adjustments button and record a minor adjustment to write it off – this is sometime required in the way
things are rounded.
• Part payments can be applied by going to ‘Find & Match’ and clicking on the split link to allocate the
partial amount against the invoice or bill.
• To create a prepayment click on ‘Add Detail’ on the statement line and then from the direct payment
drop down menu select ‘Prepayment’.
• To handle an overpayment go to ‘Find & Match’, tick the invoices and then go to new, receive money
and from the direct payments drop down menu select ‘Overpayment’.

Bank rules
• Bank rules are for the automatic creation of cash transactions only e.g. spend and receive money and
none matching invoices and bills to payments.
• A spend money bank rule will only apply to money going out and likewise a receive money rule will only
apply to money coming in.

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Our offices:
Spalding office
Bank House
Broad Street
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01775 711333

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01733 560160

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