New to Xero? Do These 5 Things First!
If you’re new to Xero or migrating from another accounting system, the first file-setup steps matter. Get them right and you’ll save yourself hours of cleanup later. Get them wrong and you’ll be chasing errors, inaccurate reports, and frustrated clients.
In this guide (and our companion video embedded below), we walk through the first five things you should do after signing into Xero for the first time.
We’ll cover:
Basic settings & advanced settings
Creating or importing your chart of accounts & conversion balances
Invoicing templates, branding, & payment options
3rd party apps & integrations
Inviting users & go live
By following these steps you’ll build a clean foundation that supports reliable financial reporting, compliance and scalability.
What You'll Want to Have Ready Before You Start
Before you dive into Xero’s interface, gather these documents and details. Having them on hand will save time and help you stay organized:
CP-575/EIN letter or business tax-ID.
Last tax return or adjusted financial statements (if available).
Closed or adjusted financial statements (from your cutoff date).
Secretary of State (or equivalent) registration.
Sales tax certificate (if applicable).
Chart of Accounts (COA) (from old system or new, use our AI prompt below to generate one).
A “go-live” conversion date and any opening balances you’ll need.
Step 1: Set Up Basic Settings & Advanced Settings
Your first stop in Xero should be the Settings area. This is where you define how Xero will treat your business going forward.
Key items to configure:
Company legal/trading name, address, and financial year settings.
Tax basis (cash vs accrual), important for how you report income and expenses.
Lock dates (especially once the previous year is final) to prevent retroactive changes.
Time zone and tracking categories (e.g., locations, departments).
If you have sales tax or VAT, ensure the correct tax ID and method are entered.
Setting these items correctly now means your reports will align with how your CPA or tax advisor expects them to look. Skipping or doing this hastily often causes misalignment between your accounting file and your tax filing.
Start your Xero journey the right way. Sign up for Xero with our partner link: https://xero5440.partnerlinks.io/CertumSolutions
Book a free 30-minute consultation with Certum Solutions: https://www.certumsolutions.com/book-consultation
Step 2: Build or Import Your Chart of Accounts
The Chart of Accounts is the backbone of your bookkeeping in Xero. It dictates how every transaction is categorized and how your reports will be presented.
Should You Import or Build from Scratch?
If you’re switching from another system and your old chart was well-structured, importing can save time.
If you’re starting fresh or your old chart is messy, building a clean new chart tailored to your business is smarter.
Xero comes with a default Chart of Accounts, but you may want to adjust it to fit your business type.
PRO TIP: Use an AI-Assisted Prompt (like the one in the free downloadable we created linked below). If you’re creating a new COA, consider using a privacy-conscious AI assistant, like Lumo or ChatGPT, to generate a safe starting template. Always review before importing.
AI Prompt: GAAP-Compliant Chart of Accounts Generator
For U.S.-based businesses following GAAP, you can use an AI tool to generate a preliminary COA framework. Use responsibly; this prompt is for educational purposes only. Always review with a qualified accounting professional. Prompt to use with ChatGPT, Lumo, or another AI assistant:
“You are a senior accounting consultant who knows U.S. GAAP, the IRS tax-form structure (Schedule C, Form 1120, Form 1065, etc.), and the specifics of building a Chart of Accounts in Xero. Create a complete, hierarchical Chart of Accounts for a U.S.-based business that aligns with the company’s primary industry, tax form, and GAAP structure.
Include Xero’s four-digit numbering scheme (1000–1999 Assets, 2000–2999 Liabilities, 3000–3999 Equity, 4000–4999 Revenue, etc.), with rationale for each major category. Output in a CSV-compatible format.”
Download our full COA prompt template
Reminder: Use this only as a structure. Don’t insert personal or PII into AI tools.
Key Structuring Tips:
Use numbering consistent with Xero’s hierarchy (e.g., 1000–1999 Assets, 2000–2999 Liabilities, 3000–3999 Equity, 4000–4999 Revenue, etc.).
Align major account groups with tax forms (Schedule C, Form 1120-S, etc.).
Limit sub-accounts early — keep it manageable, so you don’t overcomplicate your first year.
Include rationale comments (in the COA template) so the next person who opens the file understands what you did.
PRO TIP: Properly building your COA now means you’ll generate accurate Profit & Loss, Balance Sheet, and Cash Flow reports without adjusting things later.
Enter Conversion Balances
If you’re migrating from an old system, this step is critical. Conversion balances are the opening balances as of your go-live date (for example, December 31 or January 1). They help ensure your books start clean and without legacy confusion.
Here’s how to do it:
Choose a clean cutoff date (for example, the end of your last fiscal year).
Enter balance sheet figures (Assets, Liabilities, Equity); avoid importing full historical transactional detail unless necessary.
Ensure debits = credits
Lock prior periods once the balances are input and verified.
PRO TIP: By starting fresh, you’ll avoid throwing off your comparison periods, and your reports will start showing meaningful data from day one. When connecting bank feeds or third-party apps, only accept transactions dated on or after your conversion date to avoid data conflicts.
Step 3: Invoice Templates, Branding Themes, & Payment Options
It’s tempting to skip “cosmetic” things like branding but setting them early saves you from re-work and client confusion.
Branding:
Upload your company logo, choose your invoice theme.
You can set up custom invoice numbering to help differentiate old and new system invoices (for example, INV-001).
Update payment terms, default due date.
Payments:
Connect payment gateways (Stripe, PayPal, etc.) so clients can pay directly via invoice.
Configure automatic payment reminders (e.g., 7 days, 14 days, 21 days overdue).
Ensure your tax settings populate correctly for invoices.
PRO TIP: Doing this early makes your business look professional, speeds up cash flow, and reduces follow-up chasing.
Step 4: Connect 3rd Party Apps & Reconcile Everything
How your other systems (bank feeds, ecommerce, payroll) connect.
Integrations:
Connect bank feeds so transactions import automatically
Hook up third-party apps (for example: Avalara for sales tax, Shopify for ecommerce) before you invite users, so setup hiccups don’t cause confusion
Use bank rules and automated categorization to streamline reconciliation
PRO TIP: Getting this part right ensures your team accesses the correct data and workflows run smoothly.
Step 5: Invite Users & Go Live
Your accounting file isn’t just about you. It’s about how everyone interacts with the system (your bookkeeper, CPA, team members).
Inviting Users:
Set up user roles and permissions (some users only need invoice view, others full access)
Invite your accountant/bookkeeper early and give them access
Once everything else is tested, invite your team to go live
PRO TIP: Getting this part right ensures your team has access to the system; permissions are accurate, and your data stays secure.
Why Following the Five Steps Matters
When you build your Xero file the right way from day one, you get:
Accurate, timely financial reports
Fewer manual adjustments and fewer surprises during tax time
Automated workflows and less bookkeeping administrative drag
A system that scales with your business rather than holding it back
And when things go smoothly, it lends credibility to you and your business; something every small business needs.
Bonus: Top Mistakes to Avoid
Don’t start without setting lock dates. Changing historical data can invalidate your reporting.
Don’t migrate a messy or unstructured Chart of Accounts without review. Clean it first.
Don’t link key apps (payroll, ecommerce) after dozens of users are already in the system. Test first.
Don’t invite everyone to the file without reviewing user roles. Sensitive data can be exposed inadvertently.
Your Next Step
Ready to get started? Use our Xero Discount Link: https://xero5440.partnerlinks.io/CertumSolutions
Download our free xero setup checklist + AI Chart of Accounts prompt to help you stay on track and launch confidently.
If you’d rather have us handle it, we’re ready. Book a professional Xero setup with Certum Solutions. We’ll walk through everything and ensure your file is CPA-ready from day one.
Free Xero Software Consultation
Contact Xero Software Expert Now
FAQs
Can I set up Xero myself?
Yes, many businesses do. But if you want accuracy, faster results, and fewer headaches, working with a certified Xero advisor (like us) helps.
How long does the Xero setup take?
For a new file with clean data: 1–3 hours. For migration with conversion balances: a few days.
When is the best time to switch to Xero?
At the beginning of a fiscal year is ideal, but you can switch mid-year. Make sure your conversion date, balances, and filings are handled correctly.
Your first 30–60 minutes in Xero set the tone for months (and years) of financial clarity. These five steps are your foundation: settings, COA, conversion, invoices, integrations.
Follow them. Do it right. And your accounting system becomes an asset, not a burden.
Start your Xero journey the right way.
Sign up for Xero with our partner link: https://xero5440.partnerlinks.io/CertumSolutions
Book a free 30-minute consultation with Certum Solutions: https://www.certumsolutions.com/book-consultation