5 Quick Xero Tips for Efficient Bookkeeping
Bookkeeping can feel like one of those endless admin jobs that takes up far too much of your time. The good news? If you’re using Xero, there are a few smart features and habits that can dramatically cut down the hours you spend reconciling and chasing receipts.
At FHP Accounting, we help hundreds of businesses streamline their bookkeeping and compliance processes. We’ve seen first-hand how much time and money can be saved when Xero is used properly. Below we’ve pulled together 5 quick Xero bookkeeping tips that you can implement straight away to make your accounts more efficient and stress-free.
1. Automate Bank Feeds and Set Up Smart Bank Rules
The majority of bookkeeping time is often spent classifying and matching bank transactions. Automating this process in Xero eliminates repetition and reduces errors.
- Connect your bank feeds so that transactions flow into Xero daily.
- Set up bank rules to categorise recurring transactions automatically. For instance, a regular software subscription payment can be assigned straight to “Subscriptions” without any manual input.
Why it works: Properly configured bank rules can cut reconciliation time by 50% or more, making this one of the highest-return steps you can take.
2. Reconcile Weekly Using Find & Match
Leaving reconciliation until month-end (or worse, year-end) is a recipe for headaches. Instead, aim to reconcile little and often.
- Use Xero’s Find & Match tool to quickly match customer payments to one or multiple invoices.
- Prioritise reconciling receipts and supplier payments first for a clear cash flow picture.
Pro tip: Reconciling weekly keeps VAT returns accurate and avoids that pile up panic later in the year.
3. Capture Receipts and Bills with Hubdoc
Lost receipts are one of the biggest bookkeeping pain points. Luckily, Xero includes Hubdoc, a tool that extracts key data from receipts and bills.
- Staff can simply snap a photo of a receipt on their phone.
- Hubdoc automatically pulls out supplier, date and amount, then creates a draft transaction in Xero.
- Each receipt image is attached to the transaction in Xero, making VAT inspections or year-end audits much smoother.
No more chasing bits of paper and you’ll reduce manual data entry errors too.
4. Use Tracking Categories and Xero Projects for Better Insight
Want to see how each branch, department or product line is performing? Xero’s tracking categories and Projects feature provide just that.
- Tracking categories allow you to split income and expenses by location, department, or product type, without creating multiple Xero accounts.
- Xero Projects adds deeper visibility, letting you assign expenses, bills and even time entries to specific jobs or clients.
Example: A landlord with several properties can set a tracking category per property, generating individual profit and loss statements at the click of a button.
5. Keep Your Xero File Tidy and Controlled
A messy Xero file slows everything down. A tidy one keeps your reporting sharp and your year-end easy.
Checklist for good housekeeping:
- Chart of Accounts: Merge or rename rarely used codes to avoid confusion.
- Repeating Invoices: Automate regular sales to keep cash flow predictable.
- Lock Dates: Once a month is closed, lock it to prevent accidental changes.
- User Access: Give team members only the permissions they need.
- Custom Reports: Create tailored reports (like monthly cash summaries) and schedule them to send automatically.
Why it matters: These steps take minutes each month but save hours in corrections later.
Xero Bookkeeping With FHP Accounting
Xero is a powerful accounting tool, but it’s only as efficient as the way it’s set up. Automating key tasks, reconciling regularly and keeping things organised will not only save you time but also give you clearer, more reliable financial data to run your business with confidence.
At FHP Accounting, we specialise in helping businesses across Nottingham and beyond get the most out of Xero. Whether you want a one-off file tidy-up or ongoing bookkeeping support, our friendly team can help you work smarter, not harder.
Contact FHP Accounting today to find out how we can streamline your bookkeeping and free up more time for you to focus on growing your business.
