Xero Tips Every Business Owner Should Know

Xero is one of the most popular bookkeeping tools in New Zealand and for good reason. It keeps your finances organised, helps you meet compliance requirements, and gives you real-time insights into how your business is performing. But many small businesses and not-for-profits only scratch the surface of what Xero can do.

At Leafcutter Business Support, we work in Xero every day, and we’ve pulled together our top tips that will save you time, reduce errors, and make your bookkeeping much easier.

1. Reconcile Weekly for Accuracy

Reconciling regularly is one of the simplest habits that will make your Xero account more reliable. Waiting until month-end or year-end often leads to missing receipts, incorrect coding, and cash flow surprises. By reconciling weekly, you can spot issues early, keep your balances accurate, and get a clear picture of where your business stands.

Example: A business owner who reconciles weekly in Xero often finds it takes only 15 minutes and provides peace of mind that cash flow is accurate.

2. Use Bank Rules and Cash Coding to Save Time

Bank rules in Xero let you set up automatic coding for regular transactions such as subscriptions, insurance, or supplier payments. This saves time by removing repetitive manual entry and helps reduce errors. If you ever end up with a backlog of small transactions, you can also use Cash Coding, which displays your unreconciled items in a simple grid format. This makes it easy to code many transactions at once, instead of processing them individually.

Leafcutter tip: Review your bank rules every quarter to make sure GST is coded correctly and nothing has changed with your suppliers.

3. Fix Mistakes with Find & Recode

If you’ve accidentally coded transactions into the wrong account, don’t waste time fixing them one by one. Xero’s Find & Recode tool lets you select groups of transactions and update them in bulk. It’s particularly useful for correcting GST treatment or moving expenses to the right category.

Note: This tool is only available to users with adviser access. That’s where a bookkeeper like Leafcutter can step in to keep everything compliant and tidy.

4. Automate Invoice Reminders

Chasing unpaid invoices can be stressful. Xero can automatically send polite reminders at intervals you choose, such as seven days overdue and again at 14 days. This helps improve cash flow without you needing to make awkward phone calls.

Example: One of our not-for-profit clients turned on invoice reminders and reduced their average payment time from 35 days to just 19 days.

5. Save Effort with Repeating Invoices and Bills

If you bill clients the same amount each month or have regular supplier invoices, set up repeating transactions. Xero will create them automatically so you only need to approve, rather than re-enter each time.

Leafcutter tip: This works well for things like monthly rent, retainers, or membership fees.

6. Customise Your Dashboard for Clarity

Your dashboard should reflect what matters most to your business. Xero lets you drag, drop, and reorder widgets like bank accounts, invoices owed, or bills due. A customised dashboard gives you the right information at a glance.

Tip: If managing cash flow is your biggest concern, move “Invoices Owed to You” to the top so it’s the first thing you see when logging in.

7. Use Tracking Categories for Smarter Reporting

Tracking categories are one of Xero’s most under-used features. They let you see how different parts of your business are performing without overcomplicating your chart of accounts. You might set them up by branch, project, or funding stream.

Example: A community organisation we work with tracks each grant separately. This makes it easy to report back to funders and ensures transparency across programmes.

8. Capture Receipts and Bills on the Go

Lost receipts are one of the biggest headaches for small businesses. With the Xero mobile app, you can snap a photo of receipts as soon as you spend. Bills can also be forwarded straight into Xero so they’re ready to approve and match when the bank feed comes through. This habit saves hours at year-end and keeps your records audit-ready.

Key Takeaways for Using Xero

Xero is packed with features designed to make your bookkeeping faster, easier, and more accurate. Reconciling weekly, automating repetitive tasks, using tracking categories, and tapping into analytics are just a few ways to get more from it. For not-for-profits, accurate Xero records also mean stronger funding applications and easier reporting to boards and funders.

At Leafcutter Business Support, we shoulder the heavy lifting with Xero so you don’t have to. Whether it’s tidying up your books, setting up time-saving automations, or preparing reports that help you make decisions, we’re here to make bookkeeping simple and stress-free.

📩 Want to get more out of your Xero? Contact our team today and let’s set you up for success.