Xero – Xero Lesson 3 – Banking and Bank Feeds

[et_pb_section bb_built=”1″ admin_label=”section”][et_pb_row admin_label=”row” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_text background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]

The bank feeds are very much central to how Xero is built to work. Everything centers around them. I mentioned earlier in the course, that you really wouldn’t every record a payment that you made with your debit card in Xero, until the following day, when that transaction is downloaded from the bank. That’s when you’d book your office supplies purchase.

The idea behind how Xero’s banking works, is that you reconcile daily. You can run your monthly reports, and cut the dates off based on the same dates that your statement shows, to be sure everything agrees.

You are not going to reconcile your bank accounts in the traditional sense, when you’re using Xero. In other words, you will not enter the ending balance, and check off items. Xero calculates the balance per bank every day, based on what was downloaded. The difference between that, and the balance in Xero would be the un-reconciled items.

You can manually reconcile an item in Xero, but it’s highly recommended that you don’t, unless you really know what you are doing.

As long as you set your bank accounts up with the right starting balance, and you don’t duplicate transactions by manually reconciling, or delete reconciled transactions, your bank feeds should work perfectly, and seamlessly.

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]

Xero – Xero Lesson 2 – The Expense Cycle

[et_pb_section bb_built=”1″ admin_label=”section”][et_pb_row admin_label=”row” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_text background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]

  • Your purchases are your A/P, where you can enter a bill to be paid later.
  • Checks are what you record when you’re paying for it now.
  • Inventory is where your items live – both inventory, and non-inventory. Anything you sell, every product and service goes here.
  • Expense Claims are where you can submit a receipt for reimbursement. If you want to show a receipt as a contribution by the owner (ie) (s)he paid for it with personal funds, then you have to set up the appropriate equity or loan account, as an account that can be used in a payment. I’ll show you that in the video.
  • Fixed Assets can be set up for tracking. If you’re familiar with the QuickBooks Desktop Fixed asset manager, this is the same idea. For the same reasons, as with QuickBooks I am going to suggest shying away from using this. It’s a cool feature, don’t get me wrong, but it wants to calculate depreciation, for you, and in my opinion, that is better left to the tax professional who is using their tax software to calculate the tax basis depreciation. If you have the Fixed Assets module in Xero calculating depreciation on some other basis, then you are going to have to make adjustments to get your books into agreement with what is reflected on your tax return. Also, once you create the fixed asset, it can be challenging to get your payment(s) for the item linked to it. I’ve seen fixed assets get duplicated here. Once for creating it directly in the Fixed Assets area, and again when the purchase was recorded. Keep it simple. Record the purchase to the Fixed Asset account, and book the depreciation manually based on what your tax professional gives you.

These are the ways we can record expenses, or in the case of inventory.. inventory purchases, as well as fixed assets. The video will walk you through what all of this looks like.

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]

Xero – Lesson 1 – The Revenue Cycle

[et_pb_section bb_built=”1″ admin_label=”section”][et_pb_row admin_label=”row” background_position=”top_left” background_repeat=”repeat” background_size=”initial”][et_pb_column type=”4_4″][et_pb_text background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” background_position=”top_left” background_repeat=”repeat” background_size=”initial”]

As you’re going to see, the bookkeeping fundamentals don’t change a bit, when you swap out one cloud accounting package for another. We’re going to book the very same transactions, in each product.

In the T-Accounts template, you will find a new tab there for Xero. I’ve kept the transactions from the first 2 lessons, where I gave you an overview of the bookkeeping fundamentals. If you haven’t already, I highly recommend that you review the first three lessons. Then come back here to work on Xero:

  1. LESSON 1 – DEBITS AND CREDITS
  2. LESSON 2 – T-ACCOUNTS – BASIC TRANSACTION FLOW
  3. LESSON 3 – FINANCIAL STATEMENTS IN QUICKBOOKS ONLINE, XERO, SAGE ONE, AND ZOHO BOOKS

Now let’s look at how to capture revenue in Xero.

To create new transactions in Xero, click on the “Accounts” menu item.

Then for all things revenue, click “Sales.”

Xero is great about keeping the navigation really simple, and logical.

On the next screen, where it says “New” click the drop down arrow to the right of the button.

Now you can see each of the sales transaction types, that you can enter in Xero:

  • Invoice
  • Quote
  • Repeating Invoice
  • Credit Note

Watch the video and see how you can capture these transactions in Xero

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]