Working From Xero Records Accounts Preparation GuideWorking From Xero RecordsAccounts Preparation Guide

Introduction

This guidance is designed to take you from never having used Xero before through to being able to complete any job based on Xero records. The guide is split between jobs where the client has completed their bookkeeping on Xero, and jobs where the client has provided bank statements either in paper copy or electronic version and Xero will be used to analyse the transactions.

If you come across any particular problems or have specific queries please do interrogate our certified advisors

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The beginnings and basics of XeroWhat is Xero?3Access & Users3Menus and Navigation4The Demo Company6

When the client completes bookkeeping in Xerox

When the client gives us bank statements to analysey

The Beginnings and BasicsWhat is Xero?Xero is, to quote them, beautiful accounting software. What this really means is that the software has been designed with ease-of-use in mind and avoiding technical accounting terminology that a non-accountant may find confusing.The service is cloud based, which means that the data is stored at various server banks across the globe, and the physical computer processing of the data is also done by Xero themselves rather than on your computer under your desk. All you need to run the software is access to the internet Xero also have specific iPhone and iPad apps that can be used alongside the normal browser-based service.The advantages to this system over normal desktop-based software are: Access to your data anywhere. Clients bookkeeping in Xero no longer have to sit at their desks to do it; they can do it on their sofa or lounging in their private pool (just dont get the iPad wet!) Real-time information sharing. No more waiting for backups to come in we can see what the client can see remotely. Using an old computer? No problem! So long as you are using an up to date internet browser the speed of your computer wont slow you down. Constant software updates. No longer would you have to spend a frustrating few hours trying to get the latest update installed on your machine, or worry about opening files in the wrong version. When Xero make an update to their software everyone gets it at the same time, automatically.

You can get more information on the advantages of Xero at: https://www.xero.com/uk/accounting-software/why-xero/Access & UsersXero has a user-based log in, which means that each individual should have their own account to access data in Xero. You will need to be added as a user for each different organisation you need to access. Each user can have different levels of access for different organisations although we would recommend the Advisor role for staff, as this will give the full functionality of Xero to not only run off reports but also add adjustments to the system when necessary.There are no additional costs for extra users in Xero. All that is required for a Xero account is an email and password, and there is no limit to the number of organisations you can access with your account.If you have never used Xero before and therefore do not have an account: when you are invited to your first organisation you will receive an email from Xero with a link, which will allow you to either log in with an existing account or create a new one. This is all you need to do to create your account! You can add additional information to your profile if you wish, but this is not necessary.Menus & NavigationAcross the whole of the Xero system, there are three different areas. These are:1. The My Xero personal account areas. These are shown in green:

2. The Xero Support pages, which are shown in orange:

3. The organisation accounts screens are shown with a blue background:

The main links and menu options in Xero are: The hamburger (thats what they call it) button in the top left of the screen brings up a list of your most recently used organisations, if you need to quickly swap between them; below are links to your My Xero area. (We currently do not use Xero Practice Manager or Workpapers).

Clicking on your name in the top right hand corner will allow you to access your profile; change any of your account settings, or log out of Xero.

When navigating around an organisations data, the main sections of Xero are shown across the top of the page, and when hovering over each item the drop down menu shows a selection of items under each heading. A quick run-through of each section is given below.

Dashboard the home screen for the organisations data. The left side of the screen will show the banks and credit cards, while the right will show the accounts watchlist, and summaries of the sales and purchase invoices.

Accounts predominantly the data-entry section for Xero. You can add, edit or remove the bank accounts here, manage the sales and purchase invoices, manage expense claims, and if the client uses these then also manage the inventory items and fixed assets.

The Reports tab will give you links to the various reports we would need if reports you regularly need dont show in the favourites selection of the drop down menu, you can add or remove reports from the list by clicking the blue/white star next to the report when viewing the full list of reports (by clicking All Reports). Blue starred items will appear in the list.The Demo CompanyIf you want to practice getting used to using Xero, each user has access to their own Demo Company, which is a copy of a fictitious company. Here you can add invoices, check reports, etc, etc without affecting any live organisations. You can access the Demo company by the link at the bottom of the list of your available organisations in the My Xero screen.Note that you can open as many browser tabs as you need while in Xero (although they all have to be for the same Organisation), so you can have the detailed profit and loss open while the balance sheet is open in another tab, with manual journals open in another, and so on. If you make an edit in one window, you will need to refresh the other windows in order for that change to be reflected.

When The Client Completes Their Bookkeeping In XeroIn these cases, the approach to an accounts preparation job is similar to a traditional Sage or Quickbooks job. The general points and things to watch out for are:AccessEnsure that the right staff members have the right access to the right data. Adding and removing users is very easily done and everyone that would need access should be set up at the start of the job.Update Period LocksWhen you start extracting data from the Xero system, you will want to ensure that no one else starts editing the transactions and information from the period you are reviewing. This will not stop the bookkeeper or client from working in Xero as they normally would, on current-year items.Settings -> General Settings -> Financial Settings:There are two options, for the lock dates one will allow Advisor-role users make edits while the other locks everyone out of a period. This is so you, as an Advisor, can make edits such as year-end journals to the period while preventing the bookkeeper adding any late invoices (as these should be posted by now...).You can always come back and set the locks back to an earlier date if the client has a need to, but then obviously you would need to reflect the updated changes in your accounts too.Dont forget to hit Save!

Export the Reports You NeedAbove are the most common reports note that the blue/white stars next to the report indicate whether the report will show up in the drop-down menu when you hover over the Reports tab. If the client calculates their VAT Returns in Xero, the published (i.e. saved) returns for each quarter/month will be listed under the Published tab.

Exporting OptionsAt the foot of each report there are the following similar options:The ones we want to use are the Export button and either to Excel, which as it says on the tin, will give you the report in a spreadsheet; or as a PDF. The PDF versions usually format slightly better, but note that Xero will round to the nearest pound for PDF reports but give you the pence in the spreadsheet copy. Hitting the print option works, but uses the internet browser print function, so your report wont look as good and you cant save this electronically either.

Report OptionsSeveral of the reports have options at the top. The one that each report has is the date of the report for which you can enter as 31 Mar 2015, 31/3/15, 31.3.15 however you like to type it (or youll have to select the month-end from the list above, as in the case above).The other options you can play around with as and when you need to for instance, to get the P&L for the year, change Period to 12 months.Setting sort by to Account Code often gives better reports than by Account Name, as the codes often reflect the nominal type, sales, direct costs, overheads, etc. Note that sometimes bank accounts are set up with a nominal code that differs from the rest of the chart of accounts so you can find bank accounts cropping up in strange places on the TB, but so long as theyre marked as bank accounts Xero knows they belong on the balance sheet.You will need to hit Update for any changes in you report settings for them to take effect.Some reports are designed to be seen in widescreen, such as the VAT Audit Report. If this is the case, click the wide view link in the top right hand of the screen, and Xero will automatically correct the view within the browser.Getting the TB into DigitaThere are instructions for how to transfer the Xero TB into Digita on Sharepoint.You can find these under AG Documents -> Business Services -> Xero -> How to...

The General Ledger ReportThe General Ledger report will give you all the postings for your period, sorted by each nominal code. The report can therefore be quite long, and can only be viewed by exporting it to Excel:Make sure to update the dates, sort by account code, hit update then the button at the foot of the page will generate the spreadsheet of full transactions. This is similar to Sages Nominal Activity Report and is a useful reference document. When the document is in Excel, you can then use Control + f to search for amounts or by text.

The Account Transaction ReportThe Accounts Transaction report will display a particular nominal account on screen (which can be exported too), with links for each transaction that you can then drill down into:

Note that, as you can have as many tabs of Xero open as youd like in your internet browser, you can right click on a specific transaction and open in new tab. You can then view this transaction/invoice without closing the original report.

The Banks & Reconciliation ReportsWhether the client uses a bank feed or manual uploads, we will need to check that the bank reconciles and agrees to a physical bank statement. With a direct bank feed we can be much more confident that the bank balance per the bank statement that Xero is quoting is accurate, but it is still an important and easy check to do.

Each bank account has the manage account button in the top right corner of its box. Here you can get to the Reconciliation Report, but also the other functions for the bank, such as checking the bank feed status (in example above, there is no bank feed). The Account Transactions here is not the account transaction report described above, but the account transactions for that particular bank only. You can perform searches by date/amount/description using this report though, which can be quite useful.

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