Import Your Chart of Accounts in Xero
The next step in setting up your business in Xero is to import your chart of accounts. Your chart of accounts is a list of categories to organize your transactions in your business. You will set up your bank and credit card accounts and set up your bank feeds if they are available in Xero. After the bank set up, you will enter your account balances to ensure your balances match your statements. The last step is to enter any outstanding invoices, bills, credit notes, and any uncleared funds that are not reflected in your bank statements.
The first step is to export the chart of accounts already set up in Xero. You will start from the Dashboard and go to settings and select Chart of Accounts.
Export the chart of accounts and the file will download into a CSV file. My recommendation is to adjust the accounts in the CSV file to exactly what your business needs. I also suggest using a four-digit code to allow for more accounts. You will add any accounts that will be required and delete any that you will not be using.
Once you have made any necessary adjustments, you will import your new chart of accounts into Xero. Remember the chart of accounts will vary based on your industry and personal preference.
The next step is to add your bank account(s) and you will need your bank statement balance for the day before you plan to begin tracking in Xero (also known as your conversion date). In the Chart of Accounts screen, click add bank account and select your bank in the list and follow the prompts to connect your automatic bank feeds. Some banks will not be available for bank feeds, but you will need to set up the account in this screen.
To account for your balance already in your bank account, you will need to adjust your conversion balances in the settings screen under conversion balances. You will select show all accounts and you will put the balance in your bank account line. At this time, you will also account for any other outstanding balances such as accounts payable, accounts receivable, or inventory.
Once you have set up your chart of accounts and your bank accounts, you are ready to start classifying and reconciling your transactions.