There are a few key areas that will help when you are getting started in Xero, especially if you are used to QuickBooks. For general help, the Xero Business Help Center is a great place to start.

 

Bank Reconciliation works differently in Xero. The idea is that Xero imports transaction data directly, either from an automated bank feed or from a downloaded statement file. These show up as “statement transactions” in the Reconcile window, and you assign or “reconcile” them to transactions in Xero. As you do this, you can either create a new transaction or you can match the transaction to a existing item, like a bill, invoice, or payment you have already entered in the system. Once all the statement transactions are assigned, the account is considered to be reconciled.

Make sure to reconcile your transactions to existing items when appropriate, so that you don’t create duplicate income or expenses.

The automated bank feeds are available for major banks such as Wells Fargo, Chase, and Bank of America. Some local banks credit unions are also available. In some cases, we need to download the statement file (as OFX, QFX, CSV or some other filetype) and then import it to Xero manually. Either way, this process can happen more often than on a traditional monthly cycle. The number of transactions to reconcile is your guide for how up to date your account is. When there are no transactions to reconcile, you are caught up.

With a different reconciliation process, the error-catching process is also different. We will be checking your bank reconciliation monthly against the PDF statement issued by the bank to make sure that when Xero says your account is reconciled, it truly matches the bank’s records.

Xero considers credit cards and PayPal accounts to be bank accounts, so they will also use this same process. When you pay down a credit card balance or move money from PayPal into the bank account, you book it as a transfer in both places.

 

Contacts also work differently in Xero. In QuickBooks, you must save people you pay with Bills as Vendors, and people who pay you with Invoices as Customers. In Xero, you simply save them as a Contact, and you can issue invoices or bills to any contact. The system auto-categorizes them for you into Customers (people who usually pay you) and Suppliers (people who you usually pay).

 

The QuickBooks Class system is replaced in Xero with Tracking Categories. Tracking Categories provide a similar functionality to Classes, where you can pull a Profit and Loss (or an Income Statement, as it is called in Xero) that shows the accounts in rows and the tracking categories in columns. Generally, we set up your Classes under a category called Department. Similarly, we set up the Customer:Job system from QuickBooks as a tracking category called Location.

 

Here are a few more links that will be useful as you get started.

Adding Bills (to pay someone)

Paying Bills by Check

Adding Invoices (for someone to pay you)

Record an Invoice Payment

 

For more details on how to edit a transaction that has already been reconciled, see How to edit transaction coding in Xero.

Alex Nitta

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