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Step-by-step guide to setting up Xero for your business

As a small business or entrepreneur, having the right tools to run your day-to-day business is so important. That’s why we love using Xero at True North — it’s accounting software specifically for small businesses that lets you automate everyday tasks, get up-to-date financials and run your business from anywhere. We use it ourselves, and we recommend it to our clients. 

 

An intro to Xero for small business 

 

Reasons why we love Xero

You can customize it the way you like. Set up online invoices and add your logo, payment terms and payment options (Paypal, Stripe, etc.). Create invoices easily on the go and get paid faster than traditional invoicing. 

It works with your existing software. You can export your invoices from Sage, Wave, Quickbooks or whatever software you use, and import them right into Xero. You can also import your Contacts, Fixed Assets, Chart of Accounts, etc... 

Need to separate business transactions from personal? Easy, download your personal credit card transactions from your incorporation date to now. Remove any personal transactions, so then you only have the business transactions that went through the personal credit card. Import these transactions into Xero and ensure no business expense gets missed! 

It works with your banking. Connect your bank feeds for your chequing account and credit card. This will bring your bank transactions into Xero everyday, so you can sort them into the proper accounts on your books.

Get a free Hubdoc Account with your Xero Subscription! Hubdoc is like a smart, digital filing cabinet where you can send all your receipts and business documents for safe keeping and delivery to your bookkeeper. It's smart because it will fetch and save your bank and other account statements each month. You can send invoices and receipts to Hubdoc, and it will extract key data and set up Bills in Xero

Run your business on the go. You can download the Xero and Hubdoc apps on your phone. Xero allows you to invoice and look up contacts, and with Hubdoc you can snap pics of receipts from your phone. So you can run your small business from wherever you are. 

 

The low-down on the plans 

Xero has a ton of features to help you build and run your business. You can keep accurate records by quickly categorizing your bank transactions, stay on top of your business health and get paid faster with online invoices and reminders. 

There are three different business plans: Starter, Standard and Premium. Each has a monthly fee and covers the basics. Additional users will cost extra for each option. 

The Starter plan is $20 USD a month and lets you send 5 invoices and quotes. You can reconcile 20 bank transactions and capture bills and receipts from Hubdoc. 

The Standard plan is $30 USD a month. You can send unlimited invoices and quotes. Reconcile as many bank transactions as you need, and capture bills and receipts from Hubdoc. 

The Premium plan is $40 USD a month and has all the same features as Standard, with one added feature: it can handle multiple currencies. 

 

Set up Xero for your business 

Xero has a series of videos to help you get familiar with the basics of Xero. (You'll need a Xero account to view these.) Our guide is for those who are running their own books on Xero, or are looking to get started on it. You’ll find that Xero makes managing small business finances easier, so you can focus on your actual business. 

    1. Set up your business on Xero (video)

      You can start and manage your free trial account. Play with a demo company if you wish and get support with any questions that you may have.

    2. Get to know the dashboard (video)

      This displays all of your most important financial information. You’ll find everything you need to know how your business is performing this month.

    3. Edit your settings (video)

      Enter your financial and organizational settings. When is your year end? Your GST number? Do you use the accrual or cash method?

    4. Customize your invoices (video)

      Besides adding your company’s branding, verify your address, contact information and social media links are accurate so your customers can easily reach you.

    5. Edit your Chart of Accounts and GST (video)

    6. Enter your opening or conversion balances (video)

    7. Connect your bank accounts (video)

      Set up your bank accounts in Xero and connect bank feeds to bring in all bank transactions in real time. 

    8. Reconcile your bank accounts (video)

      With auto match and bank rules, you can quickly reconcile your bank transactions. 

    9. Connect your apps (video)

      Navigate the Xero App Marketplace to find the apps are best suited to your business. You’ll likely need Plooto for accounts receivable and accounts payable automation, Stripe to accept debit and credit card payments, and Hubdoc, which comes free with Xero Business. Don't forget Wagepoint for payroll.

      Hubdoc reduces data entry by accurately capturing information from bills and receipts and publishing it to Xero.

    10. Manage Expenses and Projects (video)

      Xero Expenses helps you reduce the hidden costs of processing expense claims by providing simplified workflows and integrated accounting.

      Xero Projects lets you track time and money spent on each job. It’s a great solution for job costing. You can create a project, add time and expenses, invoice the project, and monitor its profitability.

Other apps you’ll need 

While Xero is a stellar cloud bookkeeping and accounting software for small businesses, it doesn’t handle everything. You’ll need other apps to help you keep track of mileage, payroll and time tracking. Here are ones we recommend: 

Mileage - Keep track of your personal vs business mileage accurately and effortlessly – we like MileIQ for this. 

Payroll - Wagepoint and Humi are both favourites to take care of your business’s payroll. 

Time tracking - TSheets lets team members track their time and it integrates with payroll software. 

Are there any other tools and apps that you love to use for your small business? We’d love to hear about them!  

 

Read more about Small Business Basics topics that may be helpful to you and your small business. 

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