![]() ![]() Often we see people roll with the default vanilla Xero chart of accounts. All done! However getting those first few steps right is critical to your business, and the first place to start when setting up Xero is your chart of accounts. It's easy to breeze through the Xero setup wizard. Xero has designed their customer onboarding to make it simple and easy to get started. Whether it's been done by the business owner or their accountant - here are some of the common mistakes we see with Xero setups ![]() Once you’ve got Xero tracking categories set up, they are easy to use.ĭollars + Sense can help you to set up your categories, as well as talk you through how it all works and how you can run your own reports each month.As a seasoned Xero Partner and certified advisor at Digit, I've seen it all when it comes to the wonderful ways in which people can set up Xero. ![]() How do I set up Xero tracking categories? Xero tracking categories can take some time to set up, so we recommend you only do that if you know that you will do something with the information. It’s also a waste of time to create tracking categories if you know you’ll never take the time to look at the segmented data and make any changes based on that information. If you are running a simple, small business, it might not make sense to divide it up into categories that don’t exist yet. Xero tracking categories aren’t for everyone. Who doesn’t need Xero tracking categories? Running your tracking category reports each month can give you clear visibility on the profit and loss of each of your segments, which gives you the information you need to make decisions about your business budgeting, where to expand, where you might save some money, and what might need some attention. And you can also segment your Xero payroll report, which can be useful for calculating your payroll tax. You can run reports which makes it easy to assess each segment and see how they’re performing. If you use Xero tracking categories, you can segment that information further to get more granular about your detail. In your Xero bank feed reports, you’ve usually got income, cost of goods, and expenses – and all of these have account codes assigned to them. It can also be useful if you have a larger business with different departments, for example, marketing, sales, admin, etc., that you would like to be able to look at separately. For example, a yoga studio with various locations or a marketing company with various sales regions. Whether you use outsourced bookkeeping service s or manage your accounts yourself, the tracking categories can be helpful if you have different branches of your business. ![]() Who is Xero tracking categories useful for? In older accounting systems, you would need to set up a subcategory to pull out incomings and outgoings of specific sections of your business, and Xero’s tracking categories do the same thing. Tracking categories are groupings that you can assign to different profit and loss entries for your business in Xero Projects. Will using Xero tracking categories be useful in your business? Well, that depends on the structure of your business and what you might use that information for. But you might find it helpful to take your record-keeping to the next level with Xero’s tracking categories. If your business uses Xero Projects, you already know it’s a time saver and fantastic at keeping your accounts organised and in order. ![]()
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