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Xero Tips and Tricks – Get organised with Xero in 2019

Happy new year to all our readers. The turn of a new year is the perfect time to reflect on what more you can be doing to keep your business’ books and records in order to save valuable time, resources and stay in control of your finances. Furthermore, as of 1 April 2019 the Making Tax Digital for business (MTD) initiative is being rolled out and will apply to all VAT registered businesses above the £85k threshold. The below compiled tips and tricks provide some useful insight into what Xero accounting software is capable of, often underutilised by business owners.

  • Keep a closer eye on specific expenditure

To display a specific expenditure account, such as staff entertaining, office costs or travel on the accounts watchlist on your dashboard, simply edit the account and select show on dashboard watchlist. This simple trick will mean that the account data will be immediately displayed when you open your personalised dashboard, giving you improved visibility over sensitive cost accounts.

  • Keep your sales ledger tidy – how to adjust an invoice

In the instance that a customer reports a damaged or faulty item, or a lower price is negotiated, here’s how to adjust the invoice amount, rather than voiding the original invoice and re-entering:

The method is to attach a credit note to the invoice. Firstly, open the invoice that needs crediting, next click invoice options and select add credit note from the drop down. By default, the credit note will equal the total amount of the invoice, so you will need to enter the relevant details (by updating the reference/description/quantity) to finalise, click approve.

  • How to process a refund

To make a cash refund against an overpayment, prepayment or credit note on Xero, follow these simple steps:

In the all tab on your invoices page, locate the overpayment, prepayment or credit note to refund.

Enter the refund details in the make a cash refund section. You may need to adjust the amount if the refund is not for the full value of the transaction. Ensure you create a reference (such as ‘10% fast payment refund’) to easily identify the transaction in the bank reconciliation. Then click Add refund. The invoice will remain under awaiting payment if it is partially refunded. Xero will move fully refunded invoices to the paid section. Click the view overpayment link in the notification to see the updated payment.

  • Use Xero to create a business quote

To create and send a quote for a potential or existing customer, you must have advisor, standard, Invoice only Sales or Invoice only approve and pay user permissions.

Go to Business > Quotes > View and sort by status. Click new quote, fill in the relevant details including an expiry date. The quote number is set by default sequencing (invoice settings). Ensure to add a reference to improve the searchability of the quote on Xero and select a theme e.g. standard.

Attach any relevant documentation using the file icon. Next, click the cog icon and select include with quote for each file/attachment you want to send. Click add title and summary. Select an inventory item (if set up) or manually enter the details of the good or service under provision.  You must enter a description to send a quote. Enter the terms e.g. 30 days. This can be added to your branding theme to save time in the future. Lastly, click save or send.

  • How to add a foreign currency to your Xero account

Firstly, you will need to be on Xero’s premium pricing plan and have advisor/standard user permissions to add additionally foreign currencies, but if your business has increasing overseas trade, this transition could be an effective time saver and prevent any unforeseen FX surprises.

Instead of having to translate all foreign currency transactions at the spot rate and post the payment differences to a foreign exchange (FX) code, you will be able to record euro, dollar and other overseas transactions with up to date (hourly) FX information from XE.com. The final mid-market day rate is taken at midnight. You can view revalued balances and your total foreign currency exposure in the Foreign Currency Gains and Losses report.

To add a foreign currency, click on the organisation name, select settings and click currencies.

Click add currency, select the relevant currency and click add currency once more.

For further advice or assistance on the above, if you would like to migrate your books to Xero in 2019 or have any other questions regarding your accounts, contact us and see how we can help you take control of your finances.