Do you have lots of transactions that all relate to the same thing?

Use cash coding to reconcile multiple transactions rather than creating a payment for each one individually!

If you sort by payee, reference or description you can then highlight each similar transaction by ticking each box down the left hand side, you will then be able to select the account from the drop down (in any of the highlighted transactions). If you then ‘Tab’ on the keyboard you will go to the next box to the right and the account code will automatically be inputted for each transaction.

Give it a try to save time on those bank lines that need paying manually!

A common question we receive is how to correctly account for input VAT on imports in Xero. If your business imports goods and needs to reclaim VAT, it’s essential to record transactions accurately to stay compliant with HMRC regulations. This guide will walk you through the correct process for both accruals and cash accounting VAT schemes.

Understanding Input VAT on Imports

When importing goods from outside the UK, VAT is usually payable at the point of entry. Businesses using Postponed VAT Accounting (PVA) can defer the VAT payment and reclaim it on their VAT return. If PVA is not used, VAT will typically be charged by HMRC or included on an import VAT certificate (C79).

For businesses using Xero, correctly recording input VAT on imports ensures accurate VAT reporting and compliance.

Accounting for Input VAT on Imports in Xero

For Accruals Accounting VAT Scheme

1. Go to Bills to Pay and select New Bill.
2. Enter the supplier details and invoice information.
3. Set the Tax Rate as Zero Rated Expenses (0%) for the supplier invoice (since import VAT is handled separately).
4. Create a separate manual journal to record the VAT amount, crediting VAT Control and debiting VAT on Imports.
5. Ensure the VAT amount is correctly reflected on your VAT return under Box 4 (Input VAT Reclaimed).

For Cash Accounting VAT Scheme

1. Record the payment to the supplier as normal, ensuring no VAT is added.
2. When paying import VAT to HMRC, create a manual journal entry:
   • Debit: VAT on Imports
   • Credit: HMRC VAT Liability
3. Check that VAT is included in the correct return period under Box 4.

How We Can Help

Correctly recording input VAT on imports in Xero is essential for accurate VAT returns. At Lewis Brownlee, we provide expert Xero support and VAT compliance advice. So, when you need expert help, we are only a phonecall away!

If you need assistance, visit our contact page to speak with one of our accounting experts.

Step-by-Step Screenshots

Below are screenshots demonstrating how to record input VAT on imports in Xero:

If you need any more help or information on how to use Xero please feel free to contact the office for help or take a look at the Xero website: www.xero.com 

BARCLAYS BANK FEEDS ARE HERE AT LAST!!

Other news:

Uncoded statement lines

If you have the Adviser user role, you can export a list of unreconciled statement lines to a PDF or CSV file for clients to work with offline.

• Go to Accounts, then click Bank Accounts.
• Click Uncoded Statement Lines.
• Select a bank account, date range, and sort order.
• Click Update.
• Click PDF or CSV to download the file.
• Clients can add information directly in the file in the Your Comments column.

Copy from last invoice

If you have a repeat invoice for the same customer you can now copy item from the last invoice. Once an invoice has been approved this functionality is then available.

Start a new invoice

• Enter the contact
• Click on the add items tab

Microsoft Power BI

Microsoft Power BI is a business analytics tool to analyse data and share insights.

If you want to dive deep into your data, this is the way to do it. Microsoft Power BI complements Xero financial data with Microsoft Power BI to deliver powerful analytics and compelling data visualizations. And you don’t need any IT support to make it work. With the click of a button your financial data in Xero can be paired with data from other sources – such as CRM, marketing and support systems – to surface new insights. These can be saved as graphs and images to give you a visual snapshot of how your business is tracking.

A reminder that Xero will be moving their customers’ data to a new platform.

Xero will be down while your data is being transferred. The transfers will take place between 7 and 9 pm on Saturdays starting in June.

You will be warned in advance of your move day and will also get a 15 minute warning just before hand.

Once you have had the warning please do not go back into Xero for a couple of hours.

See the link below for up to date information about the move:

https://www.xero.com/blog/offline-status-page/?mkt_tok=eyJpIjoiWVdOa1pXWmlabU15TW1KaCIsInQiOiJSanZIdUNoREhBMmR2cHVcL3F4aGxyN09yemVrcnY2MFh2cDVteUVVU0dBTVg4WFRuaXhaaFhcL1JHeU12eEMxZHZKOWRkUGw4SFJJOWswcHlrYTc4TE5aRUhDTEJ4dStLZHNMaHh6R0pqTVwvbz0ifQ%3D%3D

For more information have a look at Xero’s website.

Any questions on these or Xero in general please contact us.

If a purchase invoice in Xero is cleared by multiple payments, Xero will not automatically be able to match the bank transactions to the correct item. Below are the steps on how to deal with this:

This example is taken from the demo company and assumes we have a £24 invoice outstanding to Central City Parking dated 01 June 2016.

1. Find the first of the relevant payments on the bank reconciliation screen. Then click the match tab followed by find and match

 2. Select the relevant invoice by ticking the check box. If you are struggling to find it the search boxes can be used to search for the supplier name, invoice number or amount.
If you have done this correctly you will see “Split” appear on the line. Now click this.

3. If the whole of the payment is to be set against the invoice selected you can simply click split at this point, followed by ‘Reconcile’

4. If just two payments cover the total by refreshing the page Xero may create a match as shown below.

However, if there are more payments involved steps 1-3 may need to be repeated, to reach this point.

If you are still having difficulty do not hesitate to contact a member of our Xero team who will always be happy to assist you.

The big news in Xero Updates and Features this month is BARCLAYS BANK FEEDS WILL BE HERE NEXT WEEK – Hooray!!

Other not quite so big news:

• The bank statements have had a bit of a make over and can now be viewed in a long run and feed permitting will also show the balance after each entry, making finding that difference easier if there has been a problem.
• Xero now supports a new payment service – Braintree. Check it out under settings, payment services.
• A ‘view online invoice’ function has now been added to the approved invoices so there is no longer the need to download the PDF to see the finished invoice.
• In payroll the Employers NI rebate journals have now been automated.

A reminder that Xero will be moving their customers’ data to a new platform.

Xero will be down while your data is being transferred. The transfers will take place between 7 and 9 pm on Saturdays starting in June.

You will be warned in advance of your move day and will also get a 15 minute warning just before hand.

Once you have had the warning please do not go back into Xero for a couple of hours.

See the link below for up to date information about the move:

https://www.xero.com/blog/offline-status-page/?mkt_tok=eyJpIjoiWVdOa1pXWmlabU15TW1KaCIsInQiOiJSanZIdUNoREhBMmR2cHVcL3F4aGxyN09yemVrcnY2MFh2cDVteUVVU0dBTVg4WFRuaXhaaFhcL1JHeU12eEMxZHZKOWRkUGw4SFJJOWswcHlrYTc4TE5aRUhDTEJ4dStLZHNMaHh6R0pqTVwvbz0ifQ%3D%3D 

For more information about the latest in Xero updates and features remember to visit the Xero website!

Any questions on these or Xero in general please contact us.

Keeping up with Xero

Keeping up with the latest Xero updates and features can be overwhelming, but we’re here to make it simple for you. Our team of Xero experts ensures you’re always informed about new tools, enhancements, and integrations that can benefit your business. From setting up Barclays bank feeds to automating payroll processes, we provide personalised support to help you leverage Xero’s full potential. Whether you need training, troubleshooting, or advice on maximising efficiency, we’re ready to assist. Stay ahead of the curve and let us help you use Xero to its fullest. Contact us today to see how we can support you.

For those looking to set up and manage a website or online store, Xero has an add-on partner just for you. Introducing Airsquare!

“The quick & easy way to create your own business website or online store. Sell products online and receive payment, seamlessly integrated with Xero”.

Everything you need to set up an online store, manage stock, accept payments & process your orders.

Promote, manage and sell tickets to your events online.

Create a fully-featured website that works on any screen.

Why connect my Xero account to Airsquare?

If you are using Xero for your business, and have an online shop with Airsquare, it’s a great idea to get them talking to each other.

By connecting Xero, Airsquare will:

• Create an invoice in Xero when an order is received.
• Update an invoice in Xero when an order status is changed.
• Attach an invoice to the order confirmation sent to the customer.
• Allow you to download & print invoices from Airsquare.
• Record payments against invoices.
• Record inventory item codes against invoice line items.

Please contact a member of our Xero team to find out more!