Tracking in Xero

Tracking in Xero enables users to allocate costs to different categories.

Why use tracking in Xero

Monitoring business performance is an important part of running a small business. Breaking down financial information into smaller chunks makes monitoring performance much easier. This also in turn makes it easier to identify the most profitable areas to focus on. If your business has different channels for sales leads, you may want to track which of those leads are the most profitable. If your business has different geographical areas, you may want to track which areas generate the most sales.

How to use tracking

Setting up tracking in Xero is easy. Firstly, identify the 2 most useful categories for your business to track.

Most of my clients choose:
1 – where there sales leads have come from – e.g. Networking groups, Referrals, Existing Clients, etc.

2 – the type of service they are providing – e.g. for a plumber – Heating, Plumbing repairs, Bathroom fitting, etc. Or for a marketing consultant – Websites, Social Media, Training, etc.

To set tracking up, go to Xero and select Settings, then General Settings. The second option on the left hand side is Tracking. Click on this and then on Add Tracking Category. Give your category a name and then add the options.

Xero tracking

Although you can only have 2 categories in Xero, you can set up an unlimited number of options.

 

 

 

You can assign tracking options in invoices, bills, quotes, purchase orders, money transfers, budgets etc. You can add a default tracking option to contacts too.

You can edit previous transactions to add the tracking categories but this can only be done by editing each individual transaction so if you have a lot of transactions it may be easier to decide to only change the ones in your current financial year or just start using the tracking on new transactions.

Reports

Once you’ve started assigning transactions to the new categories, you will be able to select to filter by the categories in reports, allowing you to see how much has been allocated to each option.Xero tracking report

 

 

 

For more details on tracking in Xero, visit the Xero Help Centre. If you would like advice on setting up tracking in Xero and how it will benefit your business, call us on 01604 330220.