Xero Tutorial for Beginners 2026 - Learn How to Use Xero FAST

Hey, I'm Dan and in this video I'll teach you how to start using Xero fast. In just 15 minutes you'll learn how to navigate the Xero dashboard, how to reconcile your bank transactions, how to send invoices, how to manage your bills, and we'll look at reporting. By the end of this video, you'll know exactly how to use Xero to manage your core accounting tasks, all without getting overwhelmed. To get started, sign up using the special link that you see on the screen down below. Or just click on the first link in the video description. When you sign up using that link, you'll get 90% off of your first 6 months, which is a better deal than what you'll find even on the Xero homepage. Once you click that link, you'll join me on this page here. Click here to sign up, and once you've done that, you'll land here on the subscription page. I chose the early plan to get started, but you can always upgrade later to get features like Xero's new auto reconciliation. Let's get your bank account set up first. To connect your bank account, in the top left corner, click on your company name, or on the drop-down here, and select your company name to go there. From the homepage, click accounting, and then bank accounts. Then click add bank account. Search for your bank here or select it, and then click continue and log into bank. Xero will use Plaid to securely connect your account. Just log in, and then your transactions will start flowing in automatically. It's also worth connecting a payment service like Stripe or PayPal. This lets your customers pay invoices online, so you get paid faster. To set that up, go to sales, and then online payments. Then click start with card payments. Here you can add your information, and then you can follow the steps to connect your Stripe account. The last thing to be aware of for the setup is your chart of accounts. Under the accounting tab, click chart of accounts. This is a pre-populated list of every account in your business. This tab shows all accounts, and you can click into assets, liabilities, or the other groups. You likely won't need to change much here as a beginner, but let me show you how to add one so that you know it works. Right here, click add account. For account type, I'll select inventory. You can give it a code and a name and description. Then you can set the default tax setting and click save. Under all accounts, we can see the newly created account in our list. Now that the setup is done, let's take a look at the dashboard. Come up to the top left and click home to return. This is your home base in Xero. It gives you a quick snapshot of how your business is doing at a glance. I'll hide this setup guide. And to customize what you see on the dashboard, click edit home page up here in the top right. From here, you can hide these widgets using this toggle, and you can rearrange them by simply dragging them around. When you're happy with the layout, click done. Or if you want to add a widget that isn't showing, click edit home page again, and then add widget. On any widget, you can toggle the radio button. Click done, and if you scroll down, you'll now see this widget added. To lock it in, click done. And if you want to preview your dashboard with example data, toggle this radio button here. Along the top, you'll see Xero's main navigation bar. This is how you get around. The sales tab is where you'll manage invoices, quotes, and payments coming into your business. Purchases is where you'll handle bills and expenses going out. Accounting is where you'll find your bank accounts and reconciliation, and reporting is where you'll find all of your financial reports. On the far right side, you can use this plus icon to quickly create new items. Jax is Xero's AI assistant, and you can access this by clicking this button here. And the magnifying glass lets you search across your contacts and transactions. Now that you know your way around, let's look at bank reconciliation, one of the most important parts of Xero. To show you how it works, I'm going to switch over to Xero's demo company so that we have some real transactions to work with. To do that, click the drop down next to your organization name over on the left, and then select demo company. Once you're viewing the demo company, come back to accounting and click bank accounts. You'll see the checking account here with items ready to reconcile. Click reconcile 29 items to get started. Bank reconciliation is how you keep your books accurate. Xero pulls in your real bank transactions on the left, and your job is to match them with the records inside Xero on the right. For every transaction, you're answering three simple questions. Who was it? What was it? And why? Once everything is matched up, your reports will reflect your actual financial position. There are three types of transactions that you'll come across. Some Xero has already matched for you. Others, Xero will suggest a match for. And finally, you'll need to create some manually. Let's walk through one of each. The easiest ones show up in green. That means Xero has found an exact match between your bank transaction and an existing record, like a check or an invoice. Just click okay to confirm them and you're done. Some transactions won't be an exact match, but Xero can still make a suggestion. Let me scroll down to find one of those. In this case, Xero is recognizing the payee and it's suggesting a bank rule that's already been set up. Bank rules are a great way to automate recurring transactions so that you don't have to code them manually every time. Let's right click and open this rule in a new tab so we can see how it works. In this tab, you can see the condition that Xero is checking. When the payee matches, it automatically fills in the contact and assigns it to the right account. Let's close this tab and then click okay to apply the rule. In this other suggested transaction, there is no rule, but zero has enough information to make a likely match. You can enter a description if you want, and then you can click okay to reconcile. For transactions where zero has no match or no suggestion, we create the entry manually. Type in the contact name here, and you can create the new one on the spot in line if needed. Then click here and choose an account. You can add a short description, and then to reconcile, click okay. These manual entries are common for small one-off expenses, and over time, they get faster as zero learns your business. Now that you know how to reconcile your transactions, let's look at invoicing. To do this, I'm going to switch back to my own organization. So, scroll to the top, then to the drop-down, and select your org. Now, let's head to sales and click sales overview. This is your central hub for everything coming into your business. You can see all of your invoices and quotes in one place, organized by status. We'll create our invoice from here, and then I'll show you the dedicated invoices page as well. Click the arrow next to new and select invoice. If this is your first invoice, zero may prompt you to set up an invoice template. If you're not automatically prompted, you should see a banner like this. Click add details. You can add your logo and address here, so that your details are included on every invoice that you send. I'm going to skip this for the tutorial, but I recommend taking a second to do this and to complete the stripe setup if you haven't already. I'll click cancel to continue creating the invoice. The first thing we need to add is a contact. Start typing in the contact field, and if the contact doesn't exist yet, you can create them right here on the spot. Just click create. Then you can update the contact details and then save them. Then, you'll see a few more fields across the top. The issue date will be today's date by default. You can set a due date here. Zero will automatically generate the invoice number, but you could change this. And there's also a reference field here if you want to add anything to search by later. And then down below, we can add our items. Go ahead and click in this item field. And since we're just getting started, we'll create a new one. Click new item. I'll give this item a code, NGP white, and a name. For the sales price, I'll enter $6.60. And then you can choose a sales account. I'll scroll down and I'll select 5000, cost of goods sold. I'll keep the tax rate as tax exempt. You can add or modify a description and then I'll click save. Back on the invoice, you can change the quantity. So, I'll update this to 10. And you can add a discount here. For the discount, you can enter them as just a numeric value or percentage. I'll add 10%. Then, you can continue to add more items by adding a row. And you can always delete rows on the far right as well. Once you're happy with your invoice, you can approve it and send it through email in just one step. But if you're not ready to send it just yet, click this drop-down and then click approve. When you are ready to send that approved invoice later, go to sales and then invoices. Click on the invoice to open it up. And then using this three-dot menu in the top right, you can click email. Then you can review the subject and the message. And when you're happy, you can send this off. Now, let's take a quick look at quotes and products. Quotes are great for sending a cost estimate to a customer before they commit. And you can convert quotes directly into an invoice once they accept. In the top navigation, click sales, and then click quotes. Click new quote in the top right, and you'll notice that the fields here look very similar to the ones on the invoice. Fill in your contact, make changes to your issue date if you need to, add an expiration date, and add your items. Once you've reviewed it and made any necessary changes, click send. Here you'll be prompted to create a subject and message. You can review these like we've done with the invoice, and then you can send it. To view your quotes, click sales and then quotes. The quote we just sent will be in the sent tab here, and for this tutorial, I can accept the sent quote on my customer's behalf so that we can move it to the accepted pipeline. To do so, check the quote we want to move, and then accept. That will move that quote to this tab here. And finally, when you're ready to bill them, you can take this accepted quote, and then you can use it to create an invoice. I'll mark this as invoiced and click create. All the details carry over automatically, and I'll save and close this. From our invoices page, we can see this invoice is under drafts, and we can see that it references the quote that it originally started as. Earlier, we created a product when setting up our first invoice. To see where all of your items live, come up to sales and then click products and services. This is where you can view everything that you sell, update prices or descriptions, and add new products without needing to start a new product from the invoice view. Whenever you need to create a new one, just click on new item here. Then you can fill out all the information required and add your new item. Next, let's talk about bills. Bills are how you track money going out of your business to the suppliers. To get to bills, click purchases and then bills. You might wonder, why bother creating a bill in Xero? Can't you just let it show up in your bank feed when you pay it? And you could, but your bank balance only tells you what has already happened. If you have a large bill due next week, your bank balance itself won't warn you of that. But when you enter a bill into Xero, it then shows up in your cash flow reporting. So, Xero can show you what's coming out of your account before it actually leaves. Your bank balance itself tells the past, bills help you understand the future. You can create them in several ways, but for now, click new bill and then new bill in the drop-down. Add your bill details here at the top and then your items down below. When everything looks good, click approve. Finally, let's take a look at reporting. This is where everything you've entered in Xero starts to come together. To show you reporting with some real data, I'm going to switch back to the demo company. Click the drop-down next to your organization name and click here to switch to the demo. Go to reporting and click all reports. You'll see a large list of reports here. There are lots of options, but don't let that overwhelm you. You'll only use a handful of these regularly. You can star any report to add it to your favorites. Those will then appear in the top of the reporting menu so that you can get back to them in one click. Let's open up the balance sheet. This report gives you a snapshot of your business finances at any point in time. Up here, you can change the date range using these presets or you can enter a custom date. You can also add a comparison period. This is useful for seeing how your numbers have changed month over month, quarter over quarter, or year to year. Click update to apply your changes. You can also filter the report by clicking the filter here. Choose a filter, apply it, and then click update. You'll see that the data changes, and the filter will be reflected in the report header. To clear it, just click the X, and then update again. If you want to adjust how the report looks, click edit layout here at the bottom. From here, you can drag and drop sections into a different order, and you can rename things to match how you think about your business. When you're done, either update the layout, or cancel to exit the editor and go back to your report. Whenever you need to share this report, you can always export it. Click export, and that will show your export file type options. And once you have the report set up exactly how you like it, click the drop-down under save as, and select custom report. Give the report a name, and if you want to make this version the default balance sheet, check this box. Then click save. If you go back to reporting and all reports, you'll find it under the custom tab anytime that you need to reference it. That way, you'll never have to make those adjustments more than once. And that's a quick look at reporting in Xero. If you haven't signed up yet, remember you can use the special link in the description to get 90% off of your first 6 months. If you want to go deeper with Xero, I have a more detailed tutorial that covers everything we didn't have time for today. That includes more reporting, contacts, quotes, purchase orders, and more. Click on that video here, and I'll see you there. Thanks for watching.