This video walks through the essential setup steps within Xero's advanced settings menu. You will learn how to customize financial details, tax rates, and chart of accounts to ensure your organization is correctly configured.
How do I access the Organization Settings?
To get started with your setup, you need to click on your Organization name in the top left corner and select Settings. From the settings dashboard, you'll see various tiles that allow you to control how your business operates within Xero. Start by clicking on Organization details to ensure your contact information, logo, and physical address are all updated and correct for your invoices.
💡 Action Steps
Click the Organization name
Select Settings
Click Organization details
Where do I update my Financial Settings?
Next, go back to the settings menu and click on Financial Settings. Here is where you define your financial year end and your tax defaults. You want to make sure your Sales Tax ID is entered correctly and that your tax basis—whether you are on a cash or accrual basis—is set to match your reporting requirements. This ensures that all your reporting accurately reflects your business structure.
💡 Action Steps
Select Financial Settings
Enter Financial Year End
Input Sales Tax ID
Select Tax Basis (Cash or Accrual)
How do I manage the Chart of Accounts?
Now we'll move into the Chart of Accounts. Click the Chart of Accounts tile to see the list of categories Xero uses to track your finances. You can add a new account by clicking the Add Account button at the top. You'll need to choose an account type, give it a unique code, and a name. If you have an existing list of accounts from another system, you can use the Import button to bring them all in at once using a CSV file.
💡 Action Steps
Click Chart of Accounts
Select Add Account
Assign Account Type, Code, and Name
Use the Import button for bulk uploads
What is the process for setting up Tax Rates?
If you need to customize your tax settings, click on Tax Rates in the advanced settings area. Here you can see the default rates provided by Xero. If your region requires a specific tax percentage that isn't listed, click New Tax Rate, give it a display name, and enter the specific component percentage. This ensures that when you raise an invoice, the correct tax is calculated automatically.
💡 Action Steps
Click Tax Rates
Review default rates
Click New Tax Rate
Enter Tax Component and percentage
How do I invite and manage users?
To give other people access to your data, go to the Users section under settings. Click the Invite a user button to send an email invitation. You will need to enter their first name, last name, and email address. From there, you can toggle permissions on or off, such as giving them full Advisor access or restricting them to just Projects or Payroll depending on their role in your business.
💡 Action Steps
Go to Users
Click Invite a user
Enter first name, last name, and email
Select specific user permissions
Where can I find Invoice Settings?
To change the look and feel of your documents, head into Invoice Settings. You can create different branding themes by clicking the New Branding Theme button. This allows you to change the font, margins, and logos for your invoices, quotes, and credit notes. You can also set up payment services here so that your customers can pay you directly from the invoice using a Pay Now button.
💡 Action Steps
Select Invoice Settings
Click New Branding Theme
Adjust fonts and margins
Configure Payment Services
How do I set up Tracking Categories?
For more detailed reporting, you can use Tracking Categories. Click on Advanced Settings and then select Tracking Categories. This allows you to track different departments or locations without adding more accounts to your chart of accounts. Click Add Tracking Category, give it a name like 'Region' or 'Department', and then list the different options you want to track in the category options box.
💡 Action Steps
Click Advanced Settings
Select Tracking Categories
Add a new Tracking Category
Input Category Options
What are Currencies and how do I add them?
If you deal with international customers, you'll need to manage your Currencies. Go to the Currencies setting and click Add Currency. You can search for the currency you need from the list. Once added, Xero will automatically pull in the latest exchange rates for you. You can see the current rate on this screen and use it to revalue your foreign currency accounts at the end of the month.
💡 Action Steps
Go to Currencies
Click Add Currency
Select the required currency from the list
Review exchange rates
How do I configure Payment Services?
To get paid faster, you should set up your Payment Services. From the settings menu, select Connected Apps or Payment Services. Here you can link your Xero account to services like Stripe or PayPal. Once connected, your invoices will include a link for customers to pay online instantly. Follow the prompts to log in to your provider and authorize the connection back to Xero.
💡 Action Steps
Select Payment Services
Choose a provider like Stripe or PayPal
Click Connect
Follow authorization prompts
Where do I enter Opening Balances?
Finally, if you're moving from another system, you'll need to enter your Conversion Balances. Under Advanced Settings, click Conversion Balances. Here you enter the closing balances from your previous software as of your conversion date. Make sure the total debits and credits match so that your trial balance is zero. Once you're happy with the numbers, click Save to lock in your starting point in Xero.
💡 Action Steps
Click Advanced Settings
Select Conversion Balances
Enter balances for each account
Click Save
Learn how to manage your inventory by setting up products and services within Xero. This guide covers how to organize your items using categories to streamline your invoicing and reporting.
How do I access the Products and Services area in Xero?
To get started with managing your items, you need to navigate to the Products and Services section. Head over to the Business menu at the top of your dashboard and select Products and Services from the dropdown list. This opens up your main inventory dashboard where all your items are listed.
💡 Action Steps
Click on the Business menu
Select Products and Services
How do I create a new product or service?
When you want to add a new item to your list, click on the New Item button. This will open a window where you can enter the details of what you sell. You'll need to provide an Item Code, which is a unique shorthand for the product, and an Item Name that will appear on your documents.
💡 Action Steps
Click the New Item button
Enter a unique Item Code
Enter the Item Name
How do I track purchasing and sales information for an item?
For each item, you can decide if you purchase it, sell it, or track it. If you purchase the item, tick the 'I purchase this item' checkbox and enter the unit price, the specific expense account, and the tax rate. Similarly, for sales, tick 'I sell this item' and fill in the sales price, the relevant revenue account, and the tax rate for your invoices.
💡 Action Steps
Tick the 'I purchase this item' checkbox
Select a Purchase Account and Tax Rate
Tick the 'I sell this item' checkbox
Select a Sales Account and Tax Rate
What is the process for tracking inventory levels?
If you want Xero to keep a count of how much stock you have on hand, you need to tick the 'I track this item' checkbox. You will then be prompted to select an Inventory Asset Account. This allows Xero to automatically update your balance sheet as you buy and sell physical goods.
💡 Action Steps
Tick the 'I track this item' checkbox
Select an Inventory Asset Account
How do I organize items using categories?
To keep your product list organized, you can use categories. From the main Products and Services screen, click on the Options button and select Manage Categories. Here you can create new categories like 'Hardware' or 'Labor' to group similar items together for better reporting.
💡 Action Steps
Click the Options button
Select Manage Categories
Create new category names
How do I assign an item to a specific category?
Once your categories are set up, you can assign your items to them. You can do this by clicking into an individual item and selecting the category from the dropdown menu, or you can select multiple items from your list and use the 'Edit' function to move them into a category all at once.
💡 Action Steps
Open an existing item
Select a category from the dropdown menu
Use the bulk edit feature for multiple items
How do I import products in bulk using a CSV file?
If you have a large list of products, you don't have to enter them one by one. Click on the Import button and choose Items. You should download the Xero template file first to ensure your data is in the correct format. Once your CSV is ready, upload it to bring all your products and services into Xero instantly.
💡 Action Steps
Click the Import button
Select Items
Download the Xero template file
Upload the completed CSV file
How do I search or filter my product list?
To find a specific item quickly, use the search bar at the top of the Products and Services page. You can search by the item code or name. You can also use the filter options to view only tracked items, untracked items, or items within a specific category you've created.
💡 Action Steps
Type in the Search bar
Apply filters for tracked or untracked items
Filter by Category
This video provides a detailed walkthrough on setting up and managing payment plans within Xero. Learn how to negotiate installment schedules with customers and track their progress against outstanding invoices.
What are payment plans in Xero?
Payment plans allow you to manage customers who are unable to pay their full invoice balance upfront. Instead of waiting for a lump sum, you can break the total amount down into manageable installments over a set period of time. This helps maintain your cash flow while providing flexibility to your clients.
💡 Action Steps
Identify an outstanding invoice
Determine the total balance to be restructured
How do I create a new payment plan for a customer?
To get started, you'll want to navigate to the specific invoice that requires a plan. From the invoice options, you can select the setup for a payment schedule. You will need to agree on the frequency of the payments—whether that's weekly, fortnightly, or monthly—and the start date for the first installment.
💡 Action Steps
Open the specific sales invoice
Click on the payment plan setup option
Select the payment frequency
Enter the start date for the first payment
How do I calculate installment amounts?
Once you've set the frequency, you need to decide if you are splitting the total into a specific number of installments or if the customer is paying a fixed amount until the balance is cleared. Xero will then calculate the remaining balance and show you exactly when the final payment is expected to be made.
💡 Action Steps
Enter the number of installments or the fixed payment amount
Review the calculated final payment date
Confirm the total matches the invoice balance
How do I track payments against the plan?
As payments are received through your bank feed, you'll need to reconcile them against the invoice. The payment plan view will update to show the 'Paid' status for each installment. This gives you a clear vision of whether the customer is sticking to the agreed schedule or if they have missed a specific milestone.
💡 Action Steps
Match bank feed transactions to the invoice
Check the installment status in the plan view
Identify any overdue installments colored in red
How can I edit or cancel an existing payment plan?
If a customer's circumstances change, you might need to adjust the plan. You can go back into the payment plan settings to change the installment amounts or the dates. If the customer decides to pay the full remaining balance at once, you can simply cancel the plan to return the invoice to a standard 'Awaiting Payment' status.
💡 Action Steps
Select Edit Plan from the invoice menu
Update installment dates or amounts
Click Remove Plan if the schedule is no longer needed
What happens to automatic reminders when a plan is active?
When a payment plan is active, Xero's standard invoice reminders are typically suppressed for the main invoice. Instead, the focus shifts to the individual installment due dates. This ensures you aren't sending aggressive 'Overdue' emails to a customer who is currently following their negotiated payment schedule.
💡 Action Steps
Review invoice reminder settings
Ensure installment tracking is prioritized over the original invoice due date
Learn how to manage, edit, and apply tax rates within Xero to ensure your financial transactions are recorded with the correct sales tax requirements. This guide covers setting up default rates and creating custom tax components for your business needs.
Where do I find the tax rate settings in Xero?
To get started with your tax settings, you need to head over to the organization menu. Click on your organization name in the top left corner and select Settings. From the settings dashboard, look for the Advanced settings link. Inside the advanced menu, you will find the Tax Rates option. This is the central hub where all your sales tax, VAT, or GST rates are managed depending on your location.
💡 Action Steps
Click on the Organization Menu
Select Settings
Click on Advanced settings
Select Tax Rates
What are the default tax rates available?
Xero comes pre-loaded with a set of standard tax rates based on the country edition you are using. You'll see common rates such as Tax on Sales, Tax on Purchases, and Tax Exempt. These accounts are already linked to the correct reporting lines for your tax authority. It is important to review these before you start processing transactions to ensure they match your specific business requirements.
💡 Action Steps
Review the listed Tax Rates
Check Tax on Sales
Check Tax on Purchases
How do I create a new custom tax rate?
If you have a specific requirement that isn't covered by the defaults, you can add a new rate. Click on the 'New Tax Rate' button at the top of the page. You'll need to give the tax rate a display name, which is what you will see when selecting it on an invoice. Then, you enter the tax components. You can add multiple components if you are in a region that requires state and local taxes to be tracked separately.
💡 Action Steps
Click the New Tax Rate button
Enter a Tax Rate Display Name
Add Tax Components and percentages
How do I edit or delete an existing tax rate?
To make changes to an existing rate, simply click on the name of the tax rate in the list. This opens the edit screen where you can update the percentage or the name. If you find a rate you no longer use, you can delete it, provided it hasn't been used in any transactions yet. If it has been used, you should keep it for historical reporting purposes or use the archive function if available.
💡 Action Steps
Click the name of the tax rate to edit
Update the rate percentage
Click Save
How do I assign a default tax rate to an account?
You can save time by assigning default tax rates to your Chart of Accounts. Go to the Accounting menu and select Chart of Accounts. When you click into a specific account, like 'Sales' or 'Cleaning', you can choose a default tax rate from the dropdown menu. Now, every time you use that account on a bill or invoice, Xero will automatically apply the correct tax for you.
💡 Action Steps
Go to Accounting then Chart of Accounts
Select a specific account code
Choose a rate from the Tax Rate dropdown menu
Save the account changes
How do tax rates appear on my invoices and bills?
When you are creating a new invoice, the tax rate column appears next to the account selection. If you have set a default on the account, it will populate here automatically. You can always manually override this by clicking the dropdown arrow in the tax rate column and picking a different rate from the list. The total tax amount is then calculated at the bottom of the invoice based on whether your prices are tax-inclusive or tax-exclusive.
💡 Action Steps
Identify the Tax Rate column on an invoice
Select a rate from the dropdown
Toggle between Tax Exclusive and Tax Inclusive options