Xero is one of the UK’s most popular cloud accounting platforms — and for good reason. It’s intuitive, MTD-compliant and makes bookkeeping significantly more manageable. Here’s how to get set up and get the most from it.
Creating Your Xero Account
Sign up at xero.com and select your plan. For most small businesses, the Standard or Premium plan is appropriate. You’ll enter basic business details — name, VAT registration number if applicable, and your financial year start date.
💡 Key takeaway
National Insurance for the self-employed changed in April 2024 — Class 2 was abolished and Class 4 rates adjusted; check your current liability.
Connecting Your Bank
Xero’s bank feed feature connects directly to most UK banks, importing transactions automatically. This is one of Xero’s biggest time-savers — no more manually entering transactions. Setting up the bank feed is usually the first thing a bookkeeper does when onboarding a new client.
Setting Up the Chart of Accounts
The chart of accounts is a list of all the categories your income and expenses are sorted into. Xero provides a default UK chart of accounts which can be customised to suit your business. Getting this right at the start makes reporting much more useful.
Adding Invoicing Templates
Xero has built-in invoicing that lets you create professional, branded invoices with your logo and payment terms. You can set up recurring invoices, automatic payment reminders and online payment links — all of which improve cash flow.
Working With Your Bookkeeper in Xero
Xero allows you to invite your bookkeeper as a user, giving them access to your accounts without sharing your login. This is the most effective way to work — your bookkeeper manages the bookkeeping while you retain full visibility. We set up new clients on Xero as part of our onboarding process.
Frequently Asked Questions
How much does Xero cost in the UK?
Xero plans start from around £15/month for basic features. Standard is around £30/month and includes payroll for up to 5 employees. Prices change — check xero.com for current pricing.
Is Xero MTD compliant?
Yes — Xero is a HMRC-recognised Making Tax Digital compatible software for VAT and income tax.
Can my bookkeeper set up Xero for me?
Yes — we set up and configure Xero for all our new clients, including bank feeds, chart of accounts, invoice templates and payroll.
