Xero Tips and Tricks

Matching Payment to Multiple Bills or Invoices

I. In the reconcile area of the bank account, click the Match (1) tab next to the relevant funds in the account.

II. Use the supplier (or recipient) name or the first few letters of the name (2) to search for the customer invoices and click Go (3).

III. Then check the tick box next to each of the relevant invoices (4).

IV. Once the invoices selected total the amount of funds received (or spent for bills), the top box under match will turn green, and you can select OK (5).

Record Rounding – If Someone’s Payment Doesn’t Quite Match

Sometimes, clients might pay a slightly different amount than what is due. Examples of this
are:

a. They round the purchase price up or down, so you may pay $10.00 instead of $9.95.
b. They transpose a figure so that you may pay 10.98 instead of 10.89.

When this occurs, we want to absorb the slight over or underpayment. To do this:

Select the relevant invoice/s, then click Adjustments and Minor Adjustment.

The following box will come up…

Enter 0.10 in the orange box. This will balance, and the reconcile button will become blue, so you can press this.

Please note that the above example shows the client overpaying by $0.10. If the client had underpaid by $0.10, you would enter -0.10 in the minor adjustment box.

Record Partial Payment of a Bill or Invoice

Sometimes, we allow a client to pay off our invoice, or we might choose to pay off a large bill to spread the cost. For example, let’s say our client had a bill to pay of $4,000, and we allowed them to make monthly payments of $2,000. You would match the first payment by clicking the Match tab and searching for the client.

Then click the tick box (1) on the relevant invoice and select Split (2). This will bring up a new box, which should default to the amount received. If not, enter that here (3) and click the Split (4) blue box.

This will then match, and you will be able to click ok to match it. The next $2,000 received. It will match exactly, and there is no need to do any split.

Built-in Calculators

Xero has a built-in calculator in a few different places, including bills, invoicing, and quotes. It’s easy to use in the quantity, unit price, and discount fields. Once you enter the calculation, simply press enter or tab to get the result. A simple calculation may look like this:

Basic Functions

Managing Overpayments

Part One – Accounting for the overpayment in the Xero bank account

In this video, I walk you through the process of handling overpayments in Xero. City Limousines overpaid $100, but only had a $50 invoice. I demonstrate how to record the overpayment and match the client in Xero.

Part Two – Allocating the overpayment to a new client invoice

In this video, I demonstrate how to allocate an overpayment to a new invoice for the City Limousines. It’s a simple process, and Xero will prompt you to allocate the overpayment prior to finalising your new invoice.

Part Three – Recording the refund of the overpayment to the client

In this video, we record the overpayment refund to the client. Don’t forget to actually make the payment to the client through your bank.

Common Codes in TCOB standard Chart of Accounts

200 – Sales
248 – Direct wages and salaries
For those staff who work hands-on in the business
474 – Wages and Salaries
For support staff like office administrators
210 – Purchases (also known as cost of sales and cost of goods sold)
Expenses directly related to income making. Eg wires for a sparky, pipes for a plumber and paint for a painter.
285 – ACC Levies
287 – Accountancy Fees
289 – Advertising
302 – Bank Charges
308 – Cleaning and Laundry
313 – Computer Expenses
For computer accessories and the like. Not for the purchase of actual computers or similar assets.
410 – Motor Vehicle expenses
Fuel, cleaning supplies, car wash, oil etc.
431 – Printing and Stationery
462 – Subscriptions
Often used for software subscriptions and professional organisation fees.

Tax Codes

820 -GST
For all GST payments to and refunds from IRD
824 – Income Tax Provisional (and AIM) Payments – Companies Only*
814 – Drawings code for Income tax – Individuals and Partner One of a partnership
824 – Drawings code for Income tax – Partner Two of Partnership

*If the company is paying income tax on behalf of the shareholders, this should be coded according to the drawings code for that particular shareholder.