We’ve put together a quick help sheet to assist you with keeping your books up to date in Xero:
Each month or quarter, you’ll need to do the following:
Sales:
- Create a sales invoice for any sales or work you do
- Watch: this video takes you through the process of creating a sales invoice in Xero: https://www.loom.com/share/9df8d9e99de743209fc266a39adf5516
- Read: http://www.loveaccountancy.co.uk/how-to-create-a-sales-invoice-in-xero/ for guidance on how to create an invoice – this is a useful guide when used in conjunction with the video above
Purchases:
- Process any purchase invoices or receipts as bills – this is a similar process to raising sales invoices. Remember you can attached scanned copies of any invoices or receipts received – we recommend doing this for ease of review and as evidence
- Watch: https://www.loom.com/share/9227978d4ea24adfb7e0c6ae4e622587 – this video takes you through the process of inputting a purchase invoice into Xero.
- Read: http://www.loveaccountancy.co.uk/how-to-process-a-purchase-invoices-bill-into-xero/ on how to process bills (this is a good summary guide to reference after watching the video above.
- If you have expenses that you paid for out of your own pocket (cash or personal bank account), mark these bills off as paid to the “Director’s Loan Account” if you are trading as a Limited Company or the “Capital Introduced” account if you are trading as a sole trader or partnership.
Reconcile the bank:
- Match bank receipts and payments with sales invoices and purchase bills. Create new transactions/transfers if necessary.
- See http://www.loveaccountancy.co.uk/how-to-reconcile-the-bank-in-xero/ on how to reconcile the bank
- If you’ve bought something using the business money that is personal in nature, you can reconcile this to the “Director’s Loan Account” if you are trading as a Limited Company or the “Drawings” account if you are trading as a sole trader or partnership.
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