If you’re getting standard financial statements from your Xero file, then you’re not getting the value you should. If your profit and loss statement simply shows income less expenses, you’re not getting the detail you need to successfully build your business to reach your goals.

The problem is that your Xero file was set up by your accountant or bookkeeper using the standard templates that help them to produce financial statements, BAS and income tax returns. These reports are not management reports and they don’t give you the information you need to manage your business.

My 10-point checklist will help you to optimize your existing Xero file and make sure that you have it set up to give you the information in a format that will help you run your business.
Go through each of these items and make sure you have them ticked off.


Bank feeds are working for all accounts

This means not just the main business bank account, but also credit cards, Paypal, Stripe and other accounts used to collect money from your clients or customers.


Weekly review of accounts receivable

The bookkeeping needs to be done weekly at worst, preferably daily, so that you have up-to-date information about who owes you money. With this information, you should be checking your Accounts Receivables Report every week and chasing up any invoices which are outstanding beyond your standard payment terms.


Use tracking categories to separate income and costs associated with different revenue streams

This makes it easy to pull reports directly from Xero on each revenue stream and if you have different people responsible for different services, you can provide them with their figures for review and discussion.


Expand the expense categories into more accounts

This is a great way to see exactly how much money is spent on the different components of advertising for example, and each individual subscription. As you look through your expense accounts, you will identify other areas that need more detail too.


Identify groups of expenses to categorise together

Putting similar expenses into a group gives useful information to track where you’re spending most of your money. Use categories like rent & occupancy, sales/marketing, finance, employment & contractor costs, overheads and so on.


Set up specific reports for different aspects of the business

This may be for the different revenue streams or it could be based on locality or team members.


Enter budget figures into your Xero file

First, of course, you need to create a budget, at a minimum consider using last year as a base and then change figures from there. But the key is to have it in your Xero file.


Review monthly reporting actual vs budget to see how you are tracking to what you had planned

This helps to keep you on track to your goals but also will allow you to change direction and amend your plans if necessary.


Review reports – monthly vs past 3 months.

These reports will help you to identify trends in your figures. From identifying trends you can either ensure that you focus on continuing or if the trend is negative, consider what action you need to take to change the result for the next month.


Set time aside in the diary to review reports every month

Without regular review, issues and challenges that are within the numbers will continue on without you being aware of them until potentially it is too late.

You have Xero, that’s great. Now use it to its full potential to help you to manage your business and make better decisions.


If you want to get more from your Xero reports and want help getting them set up properly, sign up now for a

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