Introduction 1 Part 1: Getting Started with Xero 7 Chapter 1: Getting to Know Xero 9 Chapter 2: Getting Organised: Setting Up Xero from Scratch 25 Chapter 3: Converting to Xero from Another System 63 Chapter 4: Fine-tuning Your Set-Up 91 Part 2: Daily Activities 115 Chapter 5: Managing Your Contacts 117 Chapter 6: Managing Your Sales 137 Chapter 7: Managing Your Payables 183 Chapter 8: Reconciling Your Bank Accounts 221 Part 3: Making the Routine, Routine 257 Chapter 9: Generating Reports 259 Chapter 10: Mastering Your Weekly and Monthly Tasks 279 Chapter 11: End of Financial Year Reporting 315 Part 4: Getting the Most Out of Xero 331 Chapter 12: Monitoring Your Business 333 Chapter 13: Managing Your Inventory Items 379 Chapter 14: Working with Fixed Assets 393 Chapter 15: Working with Multi-Currency Transactions 409 Chapter 16: Exploring the Xero Marketplace 423 Part 5: The Part of Tens 439 Chapter 17: Ten (Plus One!) Tips for Long-Term Success with Xero 441 Chapter 18: Ten Common Mistakes Made in Xero and How to Avoid Them 447 Index 453 Introduction 1 About This Book 2 Foolish Assumptions 3 Icons Used in This Book 4 Where to Go from Here 4 Part 1: Getting Started with Xero 7 Chapter 1: Getting to Know Xero 9 Understanding the Advantages of Xero 10 Exploring Xero''s Different Editions 13 Homepage: Checking Out the Dashboard 16 Understanding Your Team''s Needs 17 Integrating Xero into Your Strategic Planning 21 Generating accurate, complete and timely data entry 21 Introducing Management Reporting and the analysis capabilities of Xero 22 Taking Advantage of Support Options 22 Using Xero in a Training Environment 23 Chapter 2: Getting Organised: Setting Up Xerofrom Scratch 25 Preparing for Set-Up 26 Checking your browser and system requirements 26 Collecting your business data 28 Signing Up for Xero 29 Getting started 30 Organisation Settings 34 Financial Settings 36 Understanding Bookkeeping Basics 38 Working out how account types affect your reports 39 Creating a chart of accounts that works for you 42 Developing your own chart of accounts 43 Setting Up Your Chart of Accounts 45 Using Xero''s default Chart of Accounts 45 Customising your chart of accounts 46 Putting Your Accounts into Practice 50 Checking your conversion balances 50 Adding comparative balances 52 Entering historical invoices, bills and credit notes 54 Adding Ways to Get Paid 55 Setting up bank accounts 55 Including credit cards 57 Online payment options 57 Tax Rates 58 Chapter 3: Converting to Xero from Another System 63 Preparing to Import Data from a Non-Accounting Program 64 Converting paper-based records 64 Working with spreadsheets 65 Getting Ready to Convert from an Accounting Program 65 Getting ready to convert 67 Converting exported CSV files into Excel 70 Preparing data for import 73 Mapping tax rates 75 Importing Data into Xero 75 Chart of accounts 76 Contacts 78 Inventory items 79 Sales 81 Purchases 82 Bank transactions 84 Manual journals 86 Fixed assets 87 Unpresented payments or uncleared funds 88 Turning Off Your Old System 89 Accessing historical data 89 Moving to the new system 89 Confirming the switchover date 90 Chapter 4: Fine-tuning Your Set-Up 91 Tools of the Trade: Understanding the Dashboard 92 Xero balance versus bank balance 93 Total Cash In and Out 94 Account Watchlist 94 Invoices Owed to You 95 Bills You Need to Pay 96 Dealing with expense claims 96 Setting Up Users 96 Understanding user access levels 96 Inviting other users to access Xero 98 Taking Advantage of Live Bank Feeds 102 Activating live bank feeds 102 Organising bank accounts on your dashboard 105 Managing bank feeds 106 Manually Importing Statements 107 Bank Rules 107 Setting up bank rules 108 Managing bank rules 111 Using File Storage and the Xero Inbox 112 Part 2: Daily Activities 115 Chapter 5: Managing Your Contacts 117 Setting Up Customers 118 Setting Up Suppliers 126 Connecting Your Contacts to Workspace or Office 365 126 Sync Xero contacts with Google contacts and Microsoft Outlook 126 Connecting your email account to your contacts 127 Tweaking Your Contacts after Set-Up 128 Finding your contacts 128 Managing your contacts 129 Grouping your contacts 130 Merging your contacts 130 Unpicking accidentally merged contacts 131 Archiving your outdated contacts 132 Setting Up Employees 132 Utilising Smart Lists CRM Functionality 134 Chapter 6: Managing Your Sales 137 Navigating the Sales Dashboard 138 Money Coming In 141 Customers Owing the Most -- list 141 Customers Owing the Most -- pie chart 141 Mastering Basic Invoice Functions 141 Creating a new sales invoice 142 Accessing additional functionality in New invoice style 146 Saving, approving and cancelling invoices 147 Sending an invoice to a customer 149 Mastering More Advanced Invoice Functions 153 Designing clear invoices for a positive cash flow 154 Working with repeating invoices 162 Invoicing contact groups 164 Managing credit notes 165 Creating a new quote 167 Recording Payments 169 Receipting against sales invoices 169 Sending receipts 170 Recording income for a simple cash business 170 Making use of batch payments 172 Removing allocated payments 174 Taking Advantage of Email Templates 174 Defining your user email addresses 175 Creating a new email template 176 Deleting customised templates 178 Connecting with contacts via social media 178 Following Up on Outstanding Debtors 179 Setting up invoice reminders 180 Making use of statements 181 Chapter 7: Managing Your Payables 183 Navigating the Purchases Dashboard 184 Managing Your Supplier Bills 187 Creating a new bill 187 Approving and cancelling bills 191 Generating a purchase order 193 Making Payments 196 Recording an individual payment 196 Recording batch payments 198 Removing allocated payments 201 Mastering Other Payment Considerations 202 Printing bills 202 Working with Repeating Bills 202 Scheduling payments 204 Stylising your check 205 Sending remittance advice 207 Managing credit notes 208 Taking advantage of Hubdoc 209 Entering Expense Claims 209 Understanding Xero Expenses functionality 210 Defining Expense Settings 212 Adding a new expense claim 213 Making mobile expense claims 215 Submitting a claim for approval 217 Reviewing and authorising the claim 217 Paying the claim 218 Adding a new mileage claim 219 Chapter 8: Reconciling Your Bank Accounts 221 Preparing to Reconcile 222 Automagically Reconciling Accounts 224 Understanding the hierarchy for matching 225 Accepting transactions Xero has matched correctly 225 Tweaking Transactions to Reconcile 229 Matching misfit transactions 229 Create 234 Transfer 235 Discuss 235 Reviewing other possible matches 236 Taking Advantage of Cash Coding 236 Getting familiar with Cash Coding 237 Understanding bulk coding 238 Viewing Bank Statements 240 Viewing Account Transactions 241 Using the Spend Money and Receive Money Options 242 Direct payment 243 Prepayment 244 Overpayment 244 Underpayment 244 Processing prepayments and overpayments 245 Searching for a transaction 245 Fixing Errors 246 Resolving the difference between Xero balances and bank balances 247 Undertaking detailed searches to find and recode transactions 249 Unreconciling a bank transaction 253 Removing and undoing a bank transaction 254 What Happens in Life Happens in Xero 254 Part 3: Making the Routine, Routine 257 Chapter 9: Generating Reports 259 Understanding the Reports Available in Xero 259 Accessing Xero''s business reports 260 Selecting your favourite reports 265 Sorting and filtering 266 Customising Reports 267 Customising report layouts 267 Adding reporting ''bling'': Text Blocks and Footnotes 272 Changing views 274 Understanding Xero''s Different Reporting Options 274 Draft 274 Published 275 Archived 276 Exporting Reports 276 Accessing Management Reports 277 Chapter 10: Mastering Your Weekly and Monthly Tasks 279 Confirming Accounts are Complete 280 Reconciling Bank Accounts, Credit Card and Online Payment Gateway Accounts 281 Checking Off the Transactions in Your Clearing Accounts 283 Reconciling Your Consumer Tax Control Account 284 Reviewing Your Business Information 287 General Ledger Exceptions report 287 Invoicing 287 Aged Receivables 288 Aged Payables 290 Rep.