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Xero Bookkeeping Made Easy: Simple Tips and Tricks

Xero is a popular software among small business bookkeepers and accountants due to its intuitive interface and the ability to automate many bookkeeping tasks.

In this blog post, we'll be sharing some tips and tricks to make bookkeeping easier and more efficient using Xero. You don't have to be an accountant to use these tips - they're straightforward and easy to implement, so anyone can benefit from them.

1. Reconcile Multiple Transactions with Cash Coding

Cash coding is a quick way to reconcile multiple transactions at once. This feature is in the second tab of the bank feeds section.

Cash coding is great for reconciling regular or straightforward transactions like bank fees or subscription revenue. If you've already entered a transaction in Xero, don't use cash coding to avoid creating duplicates. Instead, match them first before using cash coding. You can also create bank rules for regular transactions to save time.

With cash coding, you can split a statement line into multiple lines, which is useful for allocating it to different accounts, tracking categories, or tax rates.

2. Simplify Your Invoicing Process with the Repeating Invoices Tool

Are you tired of creating invoices manually for your regular customers every month? Have you ever forgotten to send an invoice to a customer and had to send it out late?

Xero has a useful tool called “Repeating Invoice” which helps simplify your invoicing process and makes it more efficient. With this feature, you can create invoice templates with all the necessary details such as description, tax code, account code, and tracking category. You can even set specific rules for invoice frequency, start and end dates, and tell Xero whether to automatically create and save a new invoice as a draft or to post them. Plus, you can choose to have Xero automatically send the invoices out for you, which reduces the chance of omitting or sending them late. With this feature, you can save time and reduce errors caused by manual invoice creation.

This feature is in the Business Menu under the Invoice section and is especially useful for those who need to invoice for regular services such as accounting retainer fees, subscriptions, management income, or rental income.

3. Save Time Processing Recurring Expenses with Repeating Bills Tool

Repeating Bills is similar to Repeating Invoices, but it's for supplier invoices. This feature is located in the “Bills” section of the Business Menu.

With this feature, you can create recurring bills for expenses like internet, rent, utilities, insurance, and routine subscriptions. This feature is especially useful for those who have regular bills that need to be paid, as it saves time and ensures that you don't miss a payment.

4. Streamline Your Debtor Collection Process with Automatic Invoice Reminders

Late payments can create a cash flow shortage, which can make it challenging to pay your bills and keep your business running smoothly. Xero offers a solution to this issue with the ability to set up automatic invoice reminders.

With this feature, you can customise the frequency and content of the reminders that are sent to your customers. By setting up these reminders, your customers will receive notifications of upcoming and overdue payments, which will encourage them to pay their invoices on time.

Automating this process can save you valuable time, as you won't have to manually send out reminders or make phone calls to collect payments.

5. Save Time on Data Entry with Hubdoc

Hubdoc is a powerful data capture tool that is included with a Xero subscription. This handy tool is designed to extract information from your documents and automatically create transactions in Xero for easy reconciliation.

You can easily send your documents to Hubdoc via email, mobile app or web browser. Once the document is received, Hubdoc automatically extracts essential details like the contact name, invoice date, due date, invoice amount, and tax amount. With this information, Xero will then create an invoice, bill, credit note or spend money transaction. Hubdoc also offers the flexibility of setting up automated processes for regular bills.

You can easily organise your documents online with Hubdoc using tags and folders, and send them to other storage systems like Dropbox, Box or Google Drive.

6. Update Multiple Transactions Quickly with Find & Recode Feature

Have you ever found yourself needing to update the classification or tax code for a large number of transactions in Xero? If so, you know how time-consuming and tedious it can be to manually update each transaction one by one. Additionally, if a payment has already been applied to an invoice, you may need to undo the payment before making any changes.

Fortunately, Xero has a "Find and Recode" feature that solves this problem. It allows you to search for and update multiple transactions at once, saving time and reducing errors. You can easily locate the transactions that need updating using the search function and make the necessary changes in bulk. This feature provides greater flexibility and control over your accounting data, allowing you to quickly adapt to changes in your business, such as new tax regulations or updated accounting standards.

7. Utilise Default Settings

Xero is a software that helps automate data entry. You can set default tax rates for certain accounts or groups of accounts in the Chart of Accounts Menu. For example, if most of your products or services are taxable, it's a good idea to set the default tax rate for sales accounts as GST 10%. Bank feeds, on the other hand, normally have a default tax rate of BAS excluded.

You can also customise default settings for customers or suppliers in the Contacts Menu, including tax rate, currency, payment term, account code, and tracking category. If your customer or supplier also uses Xero, you can even enter their Xero Network Key in the default setting. This way, every time you issue an invoice to them, your invoice will be automatically sent to their Xero and saved under the “draft” invoice section in their Xero organisation.

By setting up these default settings, Xero automatically fills in the necessary information each time you create a transaction with that contact, saving you time and reducing the risk of errors. Although it takes some time to set up, you will save a lot of hours in the long run.

Xero is a powerful and user-friendly accounting software, making it a top choice for small businesses. With the help of some cool tips and tricks, bookkeeping can become a much more efficient and enjoyable task for accountants and business owners alike.

If you require more comprehensive training on Xero, don't hesitate to contact our team at Cleverly Accounting. As a Certified Xero Advisor and a Xero Champion Silver Partner, we have a wealth of knowledge about Xero to share with you. Get in touch with us today and discover the many ways in which we can help you get the most out of Xero.


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