Building thorough, precise customer records will improve the accuracy and depth of your transactions and reports.
How did you keep track of your customers before you started using Xero? On paper forms in file folders? 3×5 cards? Maybe you created a file in Excel.
How did that work for you? Probably not that well. Paper records get messy when you have to edit them. They get lost sometimes. You find yourself entering customer information for a second – and sometimes a third – time when you fill out a transaction form or try to assemble a report manually.
Xero solves all of those problems by providing clean, in-depth customer record forms that you can:
- Fill out and save, ensuring that you have the same types of details for each customer,
- Edit easily, and,
- Use in transactions and reports without having to enter the same data repeatedly.
Figure 1: You’ll have to enter – or import – contact details about your customers to create records for them. This data will be available to use in other areas of the site.
If you already have a database of customers in .txt or .csv format (most commonly, an Excel spreadsheet), you should be able to import it into Xero.
Warning: Data import is a complex process that must be done absolutely correctly, or you’ll end with scrambled records. Should you choose to do this, let us help.
To start entering customers manually, click on the Contacts tab, then on Customers. Once you’ve started entering and saving records here, you’ll see a list of them displayed on this page. Click the Add Contact button in the upper left to open a blank Contact Information page.
Note: Xero uses the same record formats for both Customers and Suppliers (Vendors), which is why you won’t see the word “Customer” in this form.
The top half of this screen consists of a series of blank fields. Enter as much information as you have. Two links here let you enter an account number and additional contacts if you choose to; these are optional.
Figure 2: To create a customer record, you’ll fill in the blanks on the Add Contact form.
When you’ve entered all of the customer details you know, click on Financial Details. Xero will tell you that Nothing is currently set. Click the Edit button and scroll down.
This lower half of the Add Contact screen is more complicated. If you are new to accounting and/or to accounting applications, you may not know how to complete some of the items there. Please don’t guess. We’ll be happy to explain what these mean and help supply the correct answers.
The first setting that you must assign, for example, is your Default Account for Sales. All transactions you create in Xero must be assigned to one of the accounts in your Chart of Accounts, which is a master list of all of your company’s accounts. Think of them as types of transactions. There are several of these in accounting: Assets, Liabilities, Equity, Expenses, and Revenue.
The default account for sales – the account that you’ll assign to transactions like invoices, quotes, and sales credit notes — is typically called Sales, which is a Revenue account. If you know your way around the Chart of Accounts, you’d click the down arrow next to the blank field under Default Account. (Be sure that this is the field under For Sales; you’ll assign an account For Purchases when you create Supplier records.) “Sales” will appear in the Account field in new transaction forms, but you can override this if there’s a reason to.
Figure 3: Setting a Default Account For Sales
Other Financial Details in this section include:
- Sales Tax. Are you already charging it in your business? If so, go ahead and enter the customer’s Tax ID Number and Sales Tax rate or status.
- Sales Discount. Enter a percentage if the customer is usually given a discount.
- Currency. Select the default for this customer here. As with other defaults, this can be overridden on individual transactions.
- Batch Payments. This applies to Suppliers.
- Invoice Settings. You can change the look and some of the content of invoices to represent your company’s brand. Here, you can specify which version the customer should receive, as well as establishing a default due date.
Finally, you can view the history of changes made to this contact record (and by which user) and add notes at the bottom of the screen.
We’ve suggested a few areas here where you might want to get help from us. If you’re running into this situation a lot, we’d recommend that you sign up for more comprehensive training from us. Xero is an exceptionally flexible accounting website, but its structure calls for a thorough understanding of financial concepts and workflow. We’ll be happy to help with both.