Do you know any business that is possible without accounting? We bet you don't. Accounting is one of the foundations of companies' operations. With it, you can track overall finance indicators, increase transparency in corporate expenses, keep everything in order, and lots more.
To manage finance-related operations efficiently, you may need some help. And Xero — holistic accounting software for SMBs, can become a real friend in this.
Xero provides many abilities for a smooth accounting process, from managing bookkeeping operations to tracking corporate expenditures. From an accounting perspective, you can work with budgets, conversion balances, recordings, charts of accounts, and more in Xero.
In this article, we'll cover a chart of accounts type in Xero and how to manage them. Scroll down to learn more about this.
What is the chart of accounts in Xero?
The chart of accounts (COA) is a unique tool for recording and tracking all company transactions. With it, you can easily build a logical structure for finance records, categorize each transaction, and create valuable reports about your bankroll resources.
Using the chart of accounts in Xero, companies can divide transactions by specific aspects such as revenue, assets, and more. Such actions help detect the needed accounts anytime and provide better insights into the company's expenditures.
The chart of accounts in Xero usually contains the following information:
- A particular account name.
- Short description.
- Identification code
What are the chart of accounts types in Xero?
Typically, a bookkeeping industry has five main chart of accounts types. Xero allows you to use all of them depending on your business needs.
Any type of resources, either tangible or intangible, your company owns. It can be office, inventory, technical equipment, etc.
The amount of money that your company owes to others, e.g., accounts payable and taxes payable.
Resources that are fully owned by company owners, like common stocks or retained earnings.
Everything your company spends on producing your goods/service, e.g., utility bills or advertising costs.
The amount of money that your company earns from selling goods/services.
How to create the chart of accounts in Xero
- To create the chart of accounts in Xero, go to the Accounting menu first and select the "Advanced" category.
2. Select the "Chart of accounts."
3. Click the "Add Account" button.
4. Select the account type and fill in the required information.
5. (Optional) Click the "Show on Dashboard Watchlist" button to display this account on your Xero dashboard.
6. (Optional) Select "Show in Expense Claims" to use the account for classic expense claims.
7. (Optional) Click the "Enable payments to this account" if you want to record transactions from this account.
8. Click the "Save" button.
How to edit the chart of accounts in Xero
You can edit the chart of accounts in Xero anytime you need it. Please note that you can apply only limited modifications for locked and system accounts.
- Click the "Advanced" category in the Accounting menu.
- Select the "Chart of Accounts."
- Click the particular chart of the account you want to edit.
4. Click the "Edit Account" button.
5. Fill in the details you need to change in the required fields.
6. (Optional) Click the "Show on Dashboard Watchlist" button to display this account on your Xero dashboard.
7. (Optional) Select "Show in Expense Claims" to use the account for classic expense claims.
8. (Optional) Click the "Enable payments to this account" if you want to record transactions from this account.
9. Click the "Save" button.
Besides the mentioned above options, you can also delete the chart of accounts, archive them, or restore them in Xero anytime.
To delete or archive your chart of accounts, just choose the relevant checkbox and click the "Delete" or "Archive" button.
To restore the chart of accounts, go to the Archive tab, choose the account you need to reactivate, and click the "Restore" button.
This action only works for archived charts of accounts. The "Delete” option will erase the chart of accounts from your Xero profile completely.
Direct Precoro integration with Xero for a seamless sync of accounting and procurement operations
If you want your accounting and procurement department to work as one mechanism, Precoro and Xero integration may be helpful for you.
With it, you can:
- Sync financial and purchasing data in a few clicks.
- Import chart of accounts, items, tax rates, etc.
- Transfer attachments and notes.
- Track documents history in logs.
- Sign in or Sign up via Xero login.
Want to see direct Precoro integration with Xero in action? Sign up for a 14-day trial or contact your dedicated customer success manager for more information.