In this blog Xero Bookkeeping Guide for Beginners we will introduce the bookkeeping software Xero and take you through some simple steps to make it a part of your everyday business activities.
The journey to perfect bookkeeping is never easy, but it can be made smooth and enjoyable using the right tools. This is where Xero comes into picture!
Make sure to also check out our guide on Bookkeeping for Small Business to find out why you need bookkeeping.
Guide to Xero Bookkeeping
Xero is a cloud-based, online accounting software that provides small to medium-sized businesses with the ability to manage their finances and keep track of their finances. It was designed by people who were frustrated with the traditional ways of bookkeeping, so they created something new.
Xero’s goal is to make it easy for any business owner to succeed.
There are many reasons why you should start using this software. These include:
- It is easy to use and saves a lot of time.
- It can be accessed from anywhere and on any device.
- It is user-friendly and has an intuitive design.
- It has advanced features like payroll, purchase orders, invoices, etc.
How to set up an account on Xero?
Setting up an account on Xero is a straightforward process that can be completed in minutes.
- The first step would be to create an account and set up your company profile. Use this link to create a free account for 30 days. You will need to provide your business name, email address, password, company address and phone number among other details.
- The next step would be to add the bank account details of your business and personal accounts so you can pay invoices and make payments through the software.
- You will also need to provide your Australian Tax File Number (TFN) so you can calculate GST on invoices. In addition, you will need to enter your credit card.
Invoicing with Xero – how to create & send invoices on your own?
If you are a freelancer, entrepreneur, or small business owner, then you know that one of the most important aspects of your business is being able to track and bill clients for work. Invoices are not just a formality to get paid – they can also be a way to show your potential clients how professional and organized you are.
Invoicing with Xero is a very easy process. You can create and send invoices on your own by following these steps:
- Log in to your Xero account and select the Invoicing tab on the left-hand side of the screen
- Click Create Invoice
- Add a customer, invoice date, invoice number, and description of the goods or services you are invoicing for
- Enter the amount to charge for each item, including GST if applicable
- Enter any discounts you are offering (if any)
- Add an itemised list of items or services that were provided by clicking ‘Add Item’ at the bottom of the invoice form
How do you reconcile payments with Xero?
You can reconcile payments with Xero by following these steps:
- Click on the “Accounts” tab and select the account where the payment is made.
- Click on the “Reconcile” button to add a new payment.
- Enter the date of the payment and select “Payment Received” as its type.
- Select which bank account to deposit this money into, enter any additional details if you need to, then click “Save Payment & Reconcile Account”
Reporting in Xero
Xero offers various reporting features. These reports can be accessed through the dashboard or through the Xero app. The following are some of the reports available in Xero:
- Income and expense statement
- Accounts receivable
- Accounts payable
- Bank reconciliation
- Balance sheet
- Cash flow forecast
- Customers, clients, and contacts report
- Expenses by category report
- Inventory report for assets, liabilities, and equity accounts.
Real time reporting in Xero
We all know that it is difficult to manage a business without proper reporting. But what if the reports are not generated in real time? Well, this can be a huge problem for any company. That is why we need to find solutions for this issue.
Xero offers real time reporting where you can see your reports in the moment they are generated and updated. This feature is available on both desktop and mobile version of Xero accounting software.
You can also use Xero for your GST
Here are some tips for using Xero to complete your GST obligations:
- Create a new account with the right tax code
- Add all of your customers who are registered for GST
- Import all of the invoices you have received from these customers into Xero
- Track the progress of each invoice as it is paid by entering a payment date and amount
- Enter any other transactions that are taxable, such as interest income or rent payments
In conclusion, Xero is a software that provides accounting and bookkeeping services. It is used by both small and medium-sized businesses as well as large enterprises.
To summarise, it has many features that make it a great choice for any business, such as:
– Ease of use
– Simple design
– Multi-currency support
– Customizable dashboard
We hope you enjoyed the Xero Bookkeeping Guide for Beginners.
If you are a small business owner and looking for online bookkeeping services in Australia, then we might be the right choice for you!
Books & Balance offers accounting services for small businesses. We can be your virtual small business bookkeeper in Sydney, Melbourne, or Perth- wherever you are!
