Xero bookkeeping

A login of our own, added as a user in your Xero organisation, with a role that lets us reconcile bank accounts, enter bills and run reports. The roles and what each one allows are set by Xero. Whoever manages users in your organisation chooses ours, and can change it or remove us whenever they like.

Separate logins are how Xero expects a file to be shared. Its security page says people you invite into Xero need their own login and multi-factor authentication, and its bank feeds page says you need a multi-factor authentication app to log in to Xero. So there's no reason to give anyone your own password, us included.

Xero's Australian pricing page says it has no per-user licence fees.

Access builds up as staff and advisers come and go, so the user list is worth a look from time to time. Check:

• who still has a login, including former staff and past advisers
• who can manage users, and so invite others in
• whether each person's role still matches what they do in Xero
• whether anyone shares a login, which Xero's security guidance asks people not to do

It starts with a look at how far the file has drifted: which accounts have unreconciled lines and from when, whether amounts are parked in a suspense account, and whether transactions appear twice. That shows the size of the job before any of it begins.

Mess in a Xero file tends to come from a handful of habits:

• Money from customers coded as fresh sales while the invoice it paid stays open, so the sale counts twice
• Supplier payments coded straight to an expense while the bill sits unpaid
• A bank rule sending a regular payment to the wrong account, month after month
• Transfers between your own accounts recorded as income or spending
• Lines left in the Reconcile tab because nobody knew what they were

Fixes run in date order from the earliest month that's out, because a later month can't be trusted until the one before it is. Each correction goes into the period it belongs to. If one would change a year your accountant has closed off, we raise it with you and your accountant before changing anything.

When many months are behind, the work is catch-up bookkeeping. Once the file is current, the monthly routine takes over.

A bank feed brings an account's transactions into Xero automatically. Xero says its feeds run under the Consumer Data Right framework, and that you can review or withdraw the access from your bank's portal at any time. When an account is first connected, Xero says it can bring in up to a year of earlier transactions, and more with some banks.

Reconciling those lines can be partly automated. Xero's page on JAX, its AI feature, lists four methods: a bank rule you've set up, a match with a record already in Xero, memory of how similar lines were reconciled before, and a prediction from how other Xero users reconciled them. JAX reconciles a line itself when it's highly confident, and suggests a match for a person to decide when it isn't.

Automation speeds up matching, but a rule or a guess can still send a line to the wrong place. So when we reconcile, each kind of line gets its own check:

• A match to an invoice or bill: we confirm the amount and the customer or supplier before accepting it
• A line a bank rule posted: we check the rule still points at the right account
• A line JAX reconciled: Xero shows why it chose the match, and we correct any that went astray
• A line with no match: it goes on your question list

At month end, each account's balance in Xero is compared with its statement. A difference has a cause to find: a payment or deposit that hasn't cleared, an error in the books, or a bank error, which you take up with your bank.

Yes, with the data moved by a conversion service rather than retyped. Xero's conversion page names Jet Convert, a third-party service that takes data from MYOB, Reckon or QuickBooks, or from bank statements.

The bookkeeping sits either side of the conversion. Before it, the old file's bank accounts are reconciled up to the conversion date. After it, Xero's opening balances are checked against the old software at that date, each account is reconciled again in Xero and the bank feeds are connected.

What comes across, and what stays behind, depends on where you're coming from. Moving from MYOB to Xero covers which MYOB files convert and what older desktop files leave out. Moving from QuickBooks to Xero covers the QuickBooks Online side. Businesses on Reckon have their own page, Moving from Reckon to Xero. If you're still deciding, our Xero vs MYOB and Xero vs QuickBooks comparisons set each vendor's own plan details side by side.

After the move, your team needs to find its way around Xero. Training on the screens they'll use is part of our help with a new Xero file, along with getting access and connecting supported bank feeds. Expect the first Xero month to need more checking than later ones, since the opening balances and the first reconciliations both have to be confirmed.

Yes. Your accountant can have a login in the same organisation, so they work from the reconciled figures you see each month, with no copies or exports to keep in step.

Sharing a file works when each side knows which jobs are theirs. A typical split:

When your accountant queries a figure, it can be checked in place, against the bank line and the attached bill, instead of through exported spreadsheets. Entries your accountant makes stay theirs to change. If something they've posted looks out of place against the bank, we ask them rather than alter it.

Once your accountant has finished a year, the months after it carry on from the balances they settled. Questions about what applies to your business at year end are for your accountant.