Xero Tips and Tricks for Small Australian Business Accounting

2. Use Bank Rules for Efficient Reconciliation

If your business has recurring transactions, like regular payments to suppliers or monthly subscriptions, you can set up bank rules to automatically categorize those transactions when they’re imported. This speeds up the reconciliation process, leaving you more time to focus on growing your business.

Tip: Create specific rules for common transactions like utilities or rent. This way, Xero can automatically categorize them for you.

How to Set Up:

• In Accounting > Bank Accounts, click Create Rule to define how your transactions should be categorized.

3. Customize Your Invoices

As a small business owner in Australia, it’s important that your invoices reflect your brand and are compliant with Australian tax requirements. Xero lets you easily customize invoices by adding your logo, business details, and preferred payment methods.

Tip: Ensure that your invoices include your Australian Business Number (ABN), as this is required for GST-registered businesses in Australia. Xero can automatically add this information to your invoices.

How to Customize:

• Go to Settings > Invoice Settings and select or create a template that matches your branding.

4. Set Up Recurring Invoices for Subscription-based Services

If your business operates on a subscription-based model or offers ongoing services, Xero allows you to set up recurring invoices that are automatically generated at specified intervals. This is a huge time-saver, especially if you have a large number of repeat clients.

Tip: Don’t forget to set up reminders for clients about upcoming payments. Xero lets you send automated reminders for overdue invoices, helping you improve cash flow.

How to Set Up:

• In the Sales section, click on New Recurring Invoice and define the frequency (weekly, monthly, etc.).

5. Track GST and BAS Automatically

GST is a key part of doing business in Australia, and Xero makes it easy to stay compliant. With Xero, you can automatically track your Goods and Services Tax (GST) and generate Business Activity Statements (BAS) to lodge with the Australian Tax Office (ATO).

Tip: Ensure that your tax settings are configured correctly from the start to avoid GST errors. This can save you time when preparing your BAS.

How to Set Up:

• Go to Settings > Tax Rates and ensure the correct GST rates are set up for your invoices, bills, and expenses.
• When it’s time to submit your BAS, simply go to Reports > GST Report to generate your BAS-ready report.

6. Use Tracking Categories for Better Business Insights

Tracking categories in Xero help you get a clearer picture of your business’s financial performance. You can use them to track income, expenses, and even projects by categories like location, department, or product type.

Tip: Set up tracking categories to manage multiple streams of income or expenses, such as different product lines or business locations.

How to Set Up:

• Go to Settings > General Settings > Tracking to create and apply tracking categories.

7. Leverage Xero’s Mobile App for On-the-Go Accounting

As a small business owner, you’re often on the move. Xero’s mobile app allows you to manage invoices, check your cash flow, reconcile transactions, and approve expenses from anywhere. Whether you’re meeting clients or out in the field, you can stay on top of your finances.

Tip: Use the mobile app to snap photos of receipts and upload them directly to Xero, making expense tracking hassle-free.

How to Set Up:

• Download the Xero mobile app from the App Store or Google Play and log in with your Xero account.

8. Enable Two-Factor Authentication (2FA) for Extra Security

With sensitive financial data on the line, securing your Xero account is crucial. Two-factor authentication (2FA) adds an extra layer of protection by requiring a second form of identification (usually a code sent to your phone) when logging in.

Tip: Enable 2FA to protect your business’s financial data from unauthorized access.

How to Set Up:

• Go to Settings > Security and enable Two-Step Authentication.

9. Utilize Xero’s Reporting Features for Financial Clarity

Xero offers a wide range of financial reports, including profit and loss, balance sheets, and cash flow statements. These reports are essential for keeping track of your financial health and making informed business decisions.

Tip: Schedule regular reports to be emailed to you or your accountant. This way, you always have a snapshot of your finances at your fingertips.

How to Set Up:

• Go to Accounting > Reports, select the report you want, and schedule it for automatic delivery.

10. Track and Approve Employee Expenses

If your employees incur expenses while conducting business, Xero lets you set up an expense claim system. Employees can submit expenses through Xero, and you can easily approve or reject them before reimbursement.

Tip: Set clear guidelines for employee expense submissions, and use Xero’s approval process to keep your finances in check.

How to Set Up:

• Go to Business > Claims to create an expense claim process for your employees.