23 Mar 2015
March 23, 2015

Xero Tracking

1 Comment

This is the first of a series of posts on useful features in Xero Bookkeeping software.  As I come from a history of using Sage 50, I will highlight in these posts the equivalent area of Sage which this relates to , in order to assist others who move from Sage to Xero.

Tracking your Finances

When your business has several income or expense streams which you need to keep track of, then you can use tracking categories to analyse different areas and for producing reports.

In our business we like to separate our income for hardware, software, training and support. If you keep track of the expenses and income for a business area you can see exactly how profitable each part of your business is and you can plan which areas you should grow and concentrate your time on.

Setting Up Tracking

In Xero you can have two completely separate tracking categories, which are set up from  Settings -> General Settings -> Tracking.  Click +Add Tracking Category, then within each category you can have unlimited options to split your transactions.

Setting Up Tracking Categories

Setting Up Tracking Categories

Recording Tracking

Once set up each transaction has the option to be allocated against one option within each of the two categories, meaning transactions can be reported on in two different ways, although just the one is sufficient to most businesses I have helped.

You can record the tracking information in sales invoices, bills, bank transactions and receipts.  You simply need to choose the option from the drop down menu during input.

Invoice showing Tracking

Invoice showing Tracking

Should you need to rename a category you can do this in the Settings ->General Settings -> Tracking area and just click rename next to the category you need to change.  Categories can also be deleted and archived if they are no longer needed.

Applications for Tracking

There are many ways you can use this flexible option within Xero. For example, if you run several company vehicles you could record the costs associated with each vehicle, or as we do track the costs and revenue relating to different areas of business, or track sales for different sales staff.  The opportunities are endless.

If you have migrated from Sage 50 the tracking option can be used to replace departments in Sage 50.

Reporting

There is a tracking summary report which can be customised for specific groups of accounts for reporting purposes, or you can also use the categories within some standard reports such as the Profit  and Loss report, Balance Sheet, Journal reports and Account Transaction Reports.

For example in the P&L report you can click on the compare option at the top of the report, in my example the tracking categories are called Bookkeepers and Trucks, then you can see the split as to how the P&L as allocated to the different category options.

Profit and Loss Options

Profit and Loss Options

Profit and Loss

Profit and Loss

 

This is a fantastic tool for really helping you improve the way you manage your company finances.  If you would like some advice on how tracking in Xero, or departments in Sage , can help you take control of your business finances then get in touch.

 

One Response to Xero Tracking
  1. I have used this tracking feature to help a client see how each of 4 areas of their business is working well and which are not. It has really helped with planning and focussing on which areas of the business need more work


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