Daily tasks concentrate on knowing your balances and inputting your data before it piles up and becomes a chore.
Check statement lines downloaded overnight
If you have automated bank feeds you can simply check if any new items have arrived overnight. Otherwise upload your online bank statement for processing.
If you’re waiting for any payments to come in you can add them into Xero or tick them off if they’re already there. If you’re adding them during bank reconciliation, enter ‘sensible’ names into the Xero side to become your Contacts – often downloaded statement lines are in ‘bank speak’ which will make them hard to recognise later.
- Reconcile any transactions (items) that have appeared on your dashboard.This will update your dashboard with any direct credit payments that have been received or made giving you a real time picture of your business
- Separate any payments received or accounts to be paid.
Scan the Dashboard to check your bank balance and Accounts Receivable / Accounts Payable movements
Pay attention to any upcoming payments you’ve got and that the age of your debtors is acceptable. Send out copies of any invoices that have been outstanding to you for too long as a reminder.
Open your mail (and email) and enter any invoices you have to pay or money received manually
Check the Accounts Payable Draft and Awaiting Payment tabs for any regular invoices automatically generated; enter money received directly on the invoice. These can then be checked off during bank reconciliation once these funds go through your bank account.
The main transactions might include:
Accounts Receivable – Recording Cheques/Cash Received
- Select Money Coming in on the Xero Dashboard to go to Accounts Receivable
- Select Awaiting Payment tab
- Choose the invoice that has been paid and record any payments received
- Collate these payments together, and prepare a bank deposit slip for banking
- Payments received in cash, that do not have an invoice need to be recorded in Xero as a ‘Receive Money’
Accounts Payable – Recording new invoices received
- Select ‘Add Payable Invoice’ on the Money Going Out panel on the dashboard
- Enter the accounts payable invoices – with due date to be paid
- Keep these invoices to be cross referenced against the statement once received
Accounts Payable – Paying invoices due today
- On the Dashboard choose the bar on the Money Going Out graph for today – this will take you to Accounts Payable where a list of invoices due to be paid today will display
- Choose the invoice you want to pay and record any payments received
- Log onto your online banking and load up payments to be made
If you have completed any jobs, invoice straight away and send them out.
If you invoice once a week or more, enter any invoices for jobs completed that day and save them as draft invoices so that you can easily remember what the invoice is for when you come to do your processing later. If you have large jobs spanning a number of days you could enter each day or portion of a job as line items onto a draft invoice to build it up to the full amount.
Accounts Receivable – New invoices to be raised
- Collate job cards, orders and any other sources that you create your accounts receivable invoices from
- Select ‘Add Receivable Invoice’ on the Money Coming In panel on Dashboard to enter new invoices
- From the Accounts Receivable Draft tab approve any invoices you’ve been working on and saving over time
- Email out your invoices
Record incidental expenses
Gather up receipts collected during the day from coffees, travel and other purchases that the business owes you for and enter these onto your expense claim. It’s handy to write the number assigned to the receipt in Xero onto the back of the receipt. If you’re away from home and you operate a ‘per diem’ allowance, enter the rate and any other claimable expenses for that day.
Doing expenses every few days eliminates the dreaded end of month catch up and gives you a good handle on your real costs. If you try to catch up at the end of the month you will miss some and that means you don’t get all of your expenses and pay more tax than you have to. This might add a few thousand dollars to your tax refund so is worth doing.
End of day
- Gather all ‘bankings’ for the day – paid invoices and cash sales (recorded in Xero as ‘Spend Money‘)
- Prepare deposit book for banking
- Check that the balance at bank on the Dashboard is higher than the current account balance. Why? The current account balance shows all unbanked cheques and payments. By checking these balances it will ensure that your bank account will not go into overdraft.
Some businesses will choose to wait until the bankings or payments made have been imported into Xero as a bank transaction.
Businesses need to be recording details on the day that payments were made and received to show any unbanked cheques/cash and to give them an accurate cashflow forecast.
Without recording transactions in Xero daily it could present a problem with reporting at month end but critically at year end processing.