Chart of Accounts

Every transaction you enter into Xero is 'coded' to one of the accounts in the Chart of Accounts. When setting up Xero, you can choose to use the Chart of Accounts which comes with Xero, a modified version of it, or import your own. Once your accounts are confirmed in Xero, reviewing and working with the Chart of Accounts is the same wherever it came from. After set up, you'll be able to access and modify the Chart of Accounts from the Settings menu.

Your Chart of Accounts is a list of accounts that every transaction you enter into Xero is 'coded' to (i.e. classified) for management and reporting. You can leave the Chart of Accounts as it was originally set up when you created your organisation in Xero, or edit and delete items from it, or add your own to suit your business.

To get to the Chart of Accounts screen go to Settings > Chart of Accounts. Your user role will determine whether you can access this screen, and if so, what you can do on it.
Settings role comparison

Video  Video: How account types affect reports (0:48)

About the Chart of Accounts in Xero:

Adding or modifying accounts:

Elsewhere in Help Centre:

Chart of Accounts video Video (2.12) Chart of Accounts

Confirm COA

Confirm COA

Confirm COA

Confirm COA

Main Chart of Accounts screen in US.

Chart of Accounts

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COA

Main US Chart of Accounts screen.

What is a Chart of Accounts?

If you're unsure what a Chart of Accounts is, the following definition might help:

The Chart of Accounts is a listing of all the accounts used by a business to code their transactions to. It is in effect an index to all the accounts within the General Ledger. The accounts fall under the broad headings of assets, liabilities, equity, revenue and expenses.

If you are used to coding your transactions to 'cost centres' (or similar), or if you want to use the same account multiple times with different names to create categories, you could use Xero's tracking feature. Tracking is available once you have completed the Setup Guide. Find out about tracking while you're setting up your Chart of Accounts if you think it might be a useful option for you as it may save you creating more accounts than necessary during the set up stage.

Introduction to the Chart of Accounts in Xero

If you're using the Xero default Chart of Accounts you'll see it contains a broad range of typical accounts that will be suitable to most businesses. If you are unsure how to use or customise the Chart of Accounts for your business or you're unsure of which accounts to use on particular transactions or in particular scenarios (e.g. processing loans) you should seek the advice of your accountant or bookkeeper - you can do this as part of setup or later after you have started using Xero. Customising the Chart of Accounts is entirely optional – you can just use it as it is.

You can use Tracking in Xero as a way to minimise the number of accounts you require. If you want to use the same account multiple times with different names as a way to create categories, we recommend you look at using Tracking instead. If you are used to coding your transactions to 'cost centres', 'department codes', 'branches' or similar you can apply tracking to your accounts in Xero instead. This gives you detailed reporting across your accounts and also can reduce the number of accounts you need.

If your Chart of Accounts has no bank accounts, make sure you set up at least one so that you can enter bank transactions, transfers and invoice or bill payments, and monitor and reconcile your accounts with your online banking accounts. You can add bank accounts during setup or at anytime after you start using Xero.

Be aware that a user's role will determine whether they can view the Chart of Accounts and if so, whether they can edit it. Take this into account if you're setting up an organisation on behalf of someone else or another organisation e.g. if you're using Xero Partner Edition only users with the Adviser user role can make changes to accounts other than the bank accounts, or map to report codes.

What’s in the Chart of Accounts?

View

Your user role will determine what you can see and do with the list of accounts.
Settings role comparison

COA tabs

COA tabs

COA tabs

Tabs in the Chart of Accounts.

Your Chart of Accounts is arranged in tabs: a complete list of accounts, followed by the account types Assets, Liabilities, Equity, Expenses and Revenue. The account types are also used to determine how accounts are displayed on your financial reports in Xero. You can customise certain reports in Xero to change where accounts display or create your own groupings on these reports.

COA tabs

The 'Archive' tab displays all those accounts you have archived.

Use the search box to find an account within the tab you are on currently. The search covers code, name and description fields.

Word 'equipment' entered in search box and Search button being clicked.

The display and options available (like adding, deleting, printing, importing) on each tab are the same and may or may not display depending on your user role. Reorder the list of accounts on any tab by clicking on a column heading - they are arranged by Code by default.

The accounts within each category have:

Select account

Click account

Select account

Click on account name or year to date figure for further details.

Click on any account (on any tab) to edit the existing account details.

Click on the account name to make changes to the existing account details. Your user role may allow you to view the account details and transactions, but not edit the account.
Settings role comparison

Click on the YTD balance (even if it’s $0.00) as an alternative to view and edit the account details and to see every transaction that has been entered against this account.

Click on the YTD balance (even if it’s £0.00) as an alternative to view and edit the account details and to see every transaction that has been entered against this account.

The Xero default accounts

Each line item on each transaction (invoice, bill, credit note, bank transactions, expense claim receipt) is coded to an account.

When you start out with Xero you will receive a default Chart of Accounts that you can edit or add to as required by your business. Talk to your accountant if you are unsure of which accounts you need and how to code them.

If you have got account balances (most likely from your Trial Balance) you need to make sure that you've at least got accounts that match in your Chart of Accounts so that you can enter these balances against them.

Account codes

Code

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Code

Code column has codes for each account.

The default Chart of Accounts in Xero has a code assigned to each account. This is a numbering system adopted by Xero for the different types of accounts (revenue, expenses, fixed asset overhead etc). An account code is simply an identifier that can be used to group similar or frequently used accounts together in your Chart of Accounts. There is no one 'right' code for each account. If you've imported your own Chart of Accounts you may or may not have codes. If you do, they're like to be different to the codes used by Xero (which doesn't matter at all).

  • You can see the codes used against each Xero account in the listing of default accounts above. When you add a bank account you can choose where in the numbering sequence your codes for bank accounts will go.
  • If you are used to a different coding system or would prefer to create your own you can edit any of the Xero accounts and change the code.
  • As you become familiar with the default codes or your own system you can use them to find and sort accounts as an alternative to using the account’s name. Your accountant or bookkeeper may have a preferred set of codes that they would like you to use.

The code ranges used to group the Xero default Chart of Accounts are:

  • 100's - assets
  • 200’s – revenue
  • 200's - liabilities
  • 300's - equity
  • 400’s, 500’s – expenses
  • 300’s, 400’s, 500’s – expenses
  • 400's - revenue
  • 600’s, 700’s – assets
  • 500's - 800's - expenses
  • 800’s, 900’s – liabilities
  • 800's - liabilities
  • 900's – equity

You can use code ranges to create your own groups of accounts on customisable reports so you might like to bear this in mind when you are creating and changing accounts in your Chart of Accounts.

Account Name & Description

All the default accounts in Xero have a generic name and description. If you've imported a Chart of Accounts each account will have a name and possibly a description if you added one.

COA name

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Name

Name column features the account names and a brief description.

The description is intended as a general guide for what the account is and does not seek to advise you how you should specifically use the accounts. If you would rather use different terminology for account names or alter the descriptions to suit your business you can edit any of the Xero accounts and change the name or description. The description is not mandatory so you can remove it altogether.

Account types

Account type column shows account types, e.g. Revenue.

Type column shows account types, e.g. Revenue.

Type column shows Revenue, for example.

Type column has account types in it. Revenue, for example.

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Type

Type

Each account has a type and this determines which category in the Chart of Accounts it displays and where on the various financial reports, transactions of this type will appear. Each of the default accounts (listed above) in Xero's Chart of Accounts has one of these types.

When you add an account (explained below) you can choose the type your account will be - an illustration on the Add Account pop up box shows you where on your reports the different account types will display (by default).

Add account

The account types used and available for your use in Xero are arranged into 5 main 'classes':

Assets

  • Bank
  • Current Asset
  • Fixed Asset
  • Non-current Asset
  • Prepayment

Liabilities

  • Current Liability
  • Liability
  • Non-current Liability

Expenses

  • Depreciation
  • Direct Costs
  • Expense
  • Overhead

Equity

  • Equity

Revenue

  • Other Income
  • Revenue
  • Sales

Notes:

  • Account types: You choose which class/type an account should be when you add an account. The account type you choose will be specific to your business and your accountant or bookkeeper will likely recommend the best way to divide up your accounts. Your 'type' choice will determine where on the reports the account is shown and how it is treated.
  • Fixed Assets: Any purchases coded to an account that has the type 'Fixed Asset' will have those items automatically added to the fixed asset register. (They'll be created as 'pending' so you can complete the asset details and later on depreciate them.)
  • Editing: You can edit an existing account and change the type to another Xero account type (except for 'bank' if the account is not a bank account).
  • Default tax type: Each account has a default tax type which you can change for the account.
  • Bank accounts: A bank account in Xero has specific behaviour to make and receive payments which you can reconcile to the statement lines coming from your actual bank account. You can also specify other accounts to record payments against internally in Xero when you add an account or edit an existing account.

Tax

Find out more about how the tax treatment and tax rates determine what amounts are reported on your GST Return in the GST Return help.

Find out more about how the tax treatment and tax rates determine what amounts are reported on your VAT Return in the VAT Return help.

Find out more about how the tax treatment and tax rates determine what amounts are reported on your BAS Return in the GST Calculation Worksheet help.

Find out more about how Xero determines sales tax figures for your Sales Tax Summary report.

Each account has a default tax type applied depending on the account type and determines how the transactions in each account should be treated with respect to tax.

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COA tax

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Tax rate column.

Tax rate column.

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Tax

To account for New Zealand GST requirements, the following tax rates are available in Xero and some are already applied as the default tax rate on each account:

  • 15% GST on Expenses
  • 15% GST on Income
  • GST on Imports
  • No GST 
  • Zero Rated

If you add your own accounts to the Chart of Accounts, you choose the tax rate at the time. At any time you can change the tax rate by editing an account, or select multiple accounts and use the Change Tax Rate button to apply a new tax rate to them all at once.

There is no need for you to set up other GST accounts (e.g. Input GST, Output GST, Paid GST, GST on Imports) as Xero's default GST account '820 - GST' is the only one you need. GST on purchases and sales is automatically picked up from any tax rate used on invoices, bills or transactions and is fed through the system to display in the appropriate places on the GST Return and GST Audit Report. As part of this process Xero is constantly adjusting the single GST account to include all necessary transactions and payments in order to show your current liability or asset. So, you don't need to create any GST accounts for imports or transactions that have no GST - use the default GST account or other account as appropriate and use the tax rate to determine the GST calculated on the transaction. Find out more about how the tax treatment and tax rates determine what amounts are reported on your GST Return in the GST Return help.

To account for United Kingdom VAT requirements (and the reporting scheme you've chosen in Financial Settings - see the next section for flat rate scheme information), the following tax rates are available in Xero and some are already applied as the default tax rate on each account:

  • 20% (VAT on Expenses)
  • 20% (VAT on Income)
  • 17.5% (VAT on Expenses)
  • 17.5% (VAT on Income)
  • 15% (VAT on Expenses)
  • 15% (VAT on Income)
  • 5% (VAT on Expenses)
  • 5% (VAT on Income)
  • Exempt Expenses
  • Exempt Income
  • Zero Rated EC Expenses
  • Zero Rated Expenses
  • Zero Rated Income
  • Zero Rated EC Goods Income
  • Zero Rated EC Services
  • VAT on Imports
  • No VAT

If you add your own accounts to the Chart of Accounts, you choose the tax rate at the time. At any time you can change the tax rate by editing an account, or select multiple accounts and use the Change Tax Rate button to apply a new tax rate to them all at once.

There is no need for you to set up other VAT accounts (e.g. Input VAT, Output VAT, Paid VAT, VAT on Imports) as Xero's default VAT account '820 - VAT' is the only one you need. VAT on purchases and sales is automatically picked up from any tax rate used on invoices, bills or transactions and is fed through the system to display in the appropriate places on the VAT Return, Flat Rate VAT Return and VAT Audit Report. As part of this process Xero is constantly adjusting the single VAT account to include all necessary transactions and payments in order to show your current liability or asset. So, you don't need to create any VAT accounts for imports or transactions that have no VAT - use the default VAT account or other account as appropriate and use the tax rate to determine the VAT calculated on the transaction. Find out more about how the tax treatment and tax rates determine what amounts are reported on your Return in the VAT Return help.

Flat rate VAT

If you are using flat rate VAT reporting, please note the difference in your Chart of Accounts:

  • Additional default tax rates will be added to your Chart of Accounts automatically.
    • 20% (VAT on Capital Purchases)
    • 20% (VAT on Capital Sales)
    • 17.5% (VAT on Capital Purchases)
    • 17.5% (VAT on Capital Sales)
    • 15% (VAT on Capital Purchases)
    • 15% (VAT on Capital Sales)
    • You can only use these rates on transactions that are coded to an asset account (see account types above) and Xero will let you use this rate on a transaction of any amount even though you may be subjected to limits by HMRC. You should check with your accountant or bookkeeper if you are unsure what applies to you.
  • All asset and expense accounts will be changed to 'No VAT' by default
  • If you change from a flat rate scheme back to a standard VAT scheme you will need to update your asset and expense accounts to the relevant VAT tax rates for your business. The capital sales & purchases rates will remain and you shouldn't use these as they are not included in the standard VAT Return (or you can delete them from the Tax Rates screen).

To account for Australian GST requirements, the following tax rates are available in Xero and some are already applied as the default tax rate on each account:

  • BAS Excluded
  • GST Free Capital
  • GST Free Expenses
  • GST Free Exports
  • GST Free Income
  • GST on Capital
  • GST on Capital Imports
  • GST on Expenses
  • GST on Imports
  • GST on Income
  • Input Taxed

If you add your own accounts to the Chart of Accounts, you choose the tax rate at the time. At any time you can change the tax rate by editing an account, or select multiple accounts and use the Change Tax Rate button to apply a new tax rate to them all at once.

There is no need for you to set up other GST accounts (e.g. Input GST, Output GST, Paid GST, GST on Imports) as Xero's default GST account '820 - GST' is the only one you need. GST on purchases and sales is automatically picked up from any invoices, bills or transactions and is fed through the system to display in the appropriate places on the Business Activity Statement (BAS). As part of this process, Xero is constantly adjusting the single GST account to include all necessary transactions and payments in order to show your current liability or asset. So, you don't need to create any GST accounts for imports or transactions that have no GST - use the default GST account or other account as appropriate and use the tax rate to determine the GST calculated on the transaction. Find out more about how the tax treatment and tax rates determine what amounts are reported on your GST Return in the GST Calculation help.

If the tax rates don't meet the needs of your business you can create your own tax rates in Settings > General Settings > Tax Rates and apply these rates as default against particular accounts or use them as needed on transactions. e.g. special GST rates outside of the default percentage ratesrates for sales or purchases from the EC.

Default sales tax rates are applied to each account in the Xero default Chart of Accounts. The tax rates are all set to (0%) initially and you can change these percentages, or these tax rates or create your own tax rates altogether to meet the tax requirements of your country. If you have completed the Setup Guide and changed the default rates at that time, those rates will display in your Chart of Accounts now. The default rates are:

  • Tax Exempt (0%)
  • Tax on Purchases (0%)
  • Tax on Sales (0%)
  • Sales Tax on Imports (0%)

And are applied by default to accounts like this:

  • Tax Exempt - range of revenue and expense accounts for things like interest, fees, wages, depreciation, taxes, loan, drawings, funds introduced and system accounts.
  • Tax on Purchases - all other expense accounts (general accounts like insurance, motor vehicle, office/general expenses, rent, advertising etc) and fixed assets (equipment).
  • Tax on Sales - the revenue accounts for sales.

Use the Tax Rates screen to make any changes to these rates or the rates you have set up. Note, you can't edit the default rates Tax Exempt (0%) and Sales Tax on Imports (0%), and you can't delete tax rates that are currently being used as default. Each transaction using each different tax rate is listed on the Sales Tax Summary Report for the tax filing period you've chosen.

If you add your own accounts to the Chart of Accounts, you choose the tax rate at the time.

If the default tax rate used on an account is not right for your business, you can edit any of the Xero accounts and change the tax option, or select multiple accounts using the check boxes and use the Change Tax Rate button to change them all at once. You can also change the tax option in a particular single instance on any line item on an invoice or bill transaction or expense claim.

If you require a particular tax rate to be used any time you enter a transaction for a specific Contact you can add default tax rates for each Contact which will override the default tax rate applied to the account (if it's different).

GST Free Expenses and BAS Excluded tax codes

Rules of thumb

Here is a simple way to look at the GST Free Expenses and BAS Excluded tax codes for the reporting outcome you require. (Please note there are other options, but this is one typical way.)

  • Use GST Free Expenses on expense transactions when they are to be treated as GST Free expenses.
  • Use BAS Excluded for transactions that are to be excluded from the Activity Statement.

Not GST Registered

For more help on changing your GST registration setting in Xero see our help: How do I change my GST registration status?

If you signed up to Xero using the ‘Not registered for GST’ option then all accounts in Xero’s default Chart of Accounts will not have tax applied. All accounts displayed in the Chart of Accounts or on transactions, invoices, bills or receipts you enter will have a default tax option of No GSTBAS Excluded.

COA no tax

COA no tax

No GST

No GST

If you register the organisation for GST then you will need to edit each account to change the default tax option to include the appropriate tax.

Not VAT Registered

For more help on changing your VAT registration setting in Xero see our help: How do I change my VAT registration status?

If you signed up to Xero using the ‘Not registered for VAT’ option then all accounts in Xero’s default Chart of Accounts will not have tax applied. All accounts displayed in the Chart of Accounts or on transactions, invoices, bills or receipts you are entering will have a default tax option of No VAT.

COA no tax

Non-VAT

If you register the organisation for VAT then you will need to edit each account  to change the default tax option to include the appropriate tax.

YTD Balance

Each account listed in the Chart of Accounts displays a Year to Date (YTD) figure. This is based on your financial year, as set in the Financial Settings screen.

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YTD

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The YTD balance for the account displays a balance particular to the type of account this is:

  • Expense and revenue accounts (i.e. Profit and LossIncome Statement accounts): a financial year to date balance displays i.e. all transactions through the account from the start of the current financial year until today's date. When you click on the YTD balance to view the details for this account you will see all transactions for the account, not just those for the financial year.
  • Asset, liability & equity accounts (i.e. Balance Sheet accounts): an 'as at' balance displays i.e. all transactions through the account showing the balance as at today's date. When you click on the YTD balance to view the details for this account all the transactions that display will be counted in the balance.
  • Whether a YTD or 'as at' balance, this is the balance that displays in the YTD column on the Dashboard if you have marked the account to go on the Account Watchlist (which you can do by clicking on the name of the account to edit it and choosing the 'Show on watchlist' option).

Click on the YTD balance (even if it’s 0.00) to access the account details screen and a list of every transaction that has been entered against this account.

Select

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Add Bank Account button.

PDF

Import

Export

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The following options are available from the Chart of Accounts tabs but your user role will determine which options are available to you:

Add Account

From any tab add an account to the Chart of Accounts.

Add Bank Account

From any tab add a bank account to the Chart of Accounts.

Edit accounts

Click onto any account name to review or edit the account details.

View account transactions

Click onto the YTD figure for any account to view the account details, showing all the transactions that have been recorded against this account.

Print PDF

From any tab, open a PDF version - this lets you view or print the Chart of Accounts in one go.

Import

Instead of manually customising the Xero default Chart of Accounts to suit your organisation, create a CSV file and import it into Xero.

Export

Export the current Chart of Accounts to a CSV file. You can make adjustments to it if required and import it again into this organisation or any other organisations you have in Xero that require the same Chart of Accounts.

Delete or Archive

Choose one or more accounts using check boxes next to the account name to delete or archive.

Delete

Choose one or more accounts using check boxes next to the account name to delete.

Restore

If you are on the Archive tab, you can restore accounts  previously archived.

Change Tax Rate

Rather than editing each account individually to change its default tax rate, you can change the default tax rate for several accounts at once by using the check boxes next to the accounts you want to change.

Add or edit accounts

Add account

Add Account button.

Your user role will determine whether you can add accounts to the Chart of Accounts.
Settings role comparison

Add as many accounts as required if the default Chart of Accounts or one you've imported doesn't have all the required accounts for your business. You can also add accounts at any time outside of the Setup Guide.

If you have got account balances (most likely from your Trial Balance) you need to make sure that you've at least got accounts that match in your Chart of Accounts so that you can enter these balances against them.

New accounts can be added from several places in Xero to save you having to come to the Chart of Accounts if you’re in the middle of doing something and realise you don’t have an appropriate account. Adding a bank account is slightly different.

Add an account from any tab on the Chart of Accounts screen.

Add account

Add account

Later on in the Setup Guide if you need to enter historical invoices or bills as part of entering your Account Balances you can also add an account directly from the invoice or bill if you realise the account you need is not already in the Chart of Accounts.

Add an account from any account drop-down list when you are adding or editing a transaction or invoice or bill.

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If you're using Xero Partner Edition be aware that your client users for this organisation can view but not make changes to accounts.
Cashbook Client user role

Edit account

Your user role will determine whether you can edit 'standard' accounts.
Settings role comparison

Editing an existing default account or one you have created yourself is done in the same way as adding an account. In the Chart of Accounts, click on the account you want to edit. If you want to edit just the default tax rate applied to one or more accounts use the check boxes and Change Tax Rate button.

COA select account

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Select to edit

Edit

Select account to edit it.

Editing a bank account is slightly different.

Within Xero Partner Edition, some users are also able to further edit an organisation's accounts by mapping them to report codes.

Enter or edit account details

All fields are mandatory except for ‘Description’ and the check boxes for Dashboard, Expense Claims and enabling payments.

Your user role will determine whether you can add or edit 'standard' accounts.
Settings role comparison

Any changes made to existing accounts that you are using in Xero will be applied to transactions and reports.

Account Type

Choose or change an account type from the drop-down list. 

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  • The account type determines how transactions in this account are reported on - if you change the type on an existing account, the account may appear in a different section of a report depending on what you change it to (unless the report has already been published). The location of the account does not affect existing or future transactions coded to that account - wherever the account is displayed on the report, all transactions for that account will be counted in the amounts displayed.
  • Each account type has a default tax rate (as explained below). If you change the account type, the tax applied to any transactions coded to this account from now on will use the default tax for the account type applied. Any existing transactions (regardless of their status) will retain the tax applied when the transaction was created.
  • You can change the type for any existing account (including system accounts) except for bank accounts, which will always be of the type 'Bank'. (Adding and editing bank accounts requires different information to be completed.)
  • You can't change an existing account (which is not a bank account) into a bank account.
  • Unless you are confident with the impact changing an account type has on your reports you should avoid changing the type for system accounts unless advised by your accountant or bookkeeper.
  • If you are using Partner Edition you may also be able to map accounts to report codes.
  • More information about Xero’s account types is shown above.
Code

Add a code or change the existing one as required.

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  • You can use symbols or letters to group accounts and the code can be up to 10 characters. Avoid starting code numbers with symbols because if you want to export the Chart of Accounts at any stage these symbols can be interpreted by Excel as the start of a mathematical formula and will not be exported to the CSV correctly.
  • If you do choose to use lettering or symbols in your codes, just be aware of how this will affect sorting and grouping your accounts. The code is mandatory and each code must be unique. As you enter a code, Xero will tell you if the code has already been used by another account.
  • The code must be unique. As you enter a code, Xero will tell you if the code has already been used by another account.
  • More information about Xero’s account codes is shown above.
Code for bank accounts (optional)

The Code is optional for bank accounts. Go to Settings > Chart of Accounts if you want to add a code to a new or existing bank account. (The Code field is not available if you are adding or editing a bank account from the Bank Account section.)

Add Bank Account pop-up showing code for Chart of Accounts.

Name & Description

Add or change the name or description of the account as required.

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  • Each account must have a unique name (up to 150 characters) but the description is optional.
  • Use letters and numbers in names and descriptions. Don’t use symbols because Excel may interpret these as formula if you export your chart of accounts.
  • More information about Xero’s account names and descriptions is shown above.
  • The Xero default descriptions you might want to change are those that you want to use for Expense Claims. If you have users who are unfamiliar with the Chart of Accounts you can provide quite detailed descriptions that automatically appear in a Help window that your users can refer to when they are entering receipts and choosing an account for their purchase.

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Tax

Choose or change the tax applied to this account as relevant to your business.

Tax

Add acct tax

Add acct tax

Tax rate

  • If you are adding a new account or changing the account type, a tax rate will be applied by default depending on the account type chosen. Some account types can only have certain tax codes - the list of available tax codes will change to what is allowed e.g. a 'sale' account can have a tax on income applied, but not a tax on expenses.
  • If a tax rate you want to apply to the account is not available, you can create your own tax rates before adding or editing accounts.
  • If you're not sure what tax rates you need or how you tax rates should be applied to certain accounts, please check with your accountant or bookkeeper. Also check with them if you feel the need to change the tax rate applied to a Xero system account to ensure your reports and tax returns will still behave as expected.
  • If you change the tax setting here, it will apply to all transactions assigned to this account. When you are using Xero to enter invoices, bills and transactions you'll be able to change how tax is applied to an individual transaction as required.
  • If you change the tax here, it will apply to all transactions assigned to this account in future - existing transactions will remain at the tax rate applied at the time the transaction was created or saved. If you want to change how tax is applied to an individual transaction that uses this account, you can change the tax applied when you enter the transaction using Accounts > Receive Money, Accounts > Spend Money, Sales > Add Invoice or Purchases > Add Bill.
  • If you change the GST registration for your company (i.e. become GST registered when not previously) then you will need to update the tax option for each account here. 
  • If you change the VAT registration for your company (i.e. become VAT registered when not previously or change from flat rate VAT to standard accrual or cash basis) then you will need to update the tax option for each account here.
  • More information on Xero's tax types is shown above.
  • You can change the tax rate used on several accounts at once using the Change Tax Rate button.
Account display & behaviour

Using the following optional check boxes you can determine where in Xero this account will display and when it can be used:

Tick boxes

Show on Dashboard Watchlist

Select this option (it's not checked by default) if you would like to see this account on your Dashboard (listed alphabetically). Transactions are shown based on the date they were raised. Deselect to remove the account from the Dashboard.

Acct watchlist

If you're using Xero Partner Edition, only Cashbook Client and Adviser user roles are able to view the list of accounts and balances on the Watchlist. Only users with the Adviser user role are able to add or remove accounts from this list.
Cashbook Client user role

Show in Expense Claims

Check this option to have the account display in the list of accounts that can be chosen when entering a receipt into an Expense Claim.

Expense Claim list of accounts when entering a receipt.

  • By default, all accounts that exist or are imported as the type ‘Overhead’, ‘Expense’ or ‘Fixed Assets’ are checked to display in the account drop-down when adding a receipt.
  • This applies to any Chart of Accounts file imported that contains these types of accounts unless you changed this before importing. If you export the Chart of Accounts from Xero, the setting to display the account when entering a receipt will be retained.
  • This option applies only to accounts displayed when using expense claims.
  • Choose any account to display in the receipt account drop-down except for a bank account.
  • When adding a new account this setting is not automatically applied so if you want the account to display when entering a receipt you must check it.
  • Limit the number of accounts that are shown in the receipt account drop-down list by removing checks against those that you don’t want to display. There must be at least one account checked.

Change Tax Rate

Change tax

Your user role will determine whether you can delete or archive accounts.
Settings role comparison

Change tax rates for more than one account at once

Each account in the Chart of Accounts has a default tax rate (whether a Xero default or one set by you) that will be applied to each line item on a transaction, invoice or bill when you choose to code it to that account. You can change the default tax rate that is applied for the account.

  • On any tab (except the Archive tab) use the check boxes to select (or deselect) the accounts you want to change the default tax rate for. Select (or deselect) all accounts by using the very top check box.
  • Click the Change Tax Rate button to view a list of available tax rates and choose one to change all the selected accounts to.

Change tax

Change tax

Change tax

Change tax

  • The tax rates available are the Xero default rates (unless you have renamed, deleted or edited them) and any you've created yourself. All rates are displayed but you can only change to another tax rate that 'matches' your account type e.g. GST on Incomethe GST on Income rates can only be used for revenue account types but any GST rate can be used on equity, liability or asset account types or No GST BAS Excluded can be used on any account type.
  • The tax rates available are the Xero default rates (unless you have renamed, deleted or edited them) and any you've created yourself. All rates are displayed but you can only change to another tax rate that 'matches' your account type e.g. any of the VAT on Income rates can only be used for revenue account types but any VAT rate can be used on equity, liability or asset account types or No VAT can be used on any account type.
  • The tax rates available are the Xero default rates (unless you have renamed, deleted or edited them) and any you've created yourself.

    You can choose any tax rate to be applied to any account type - the same sales tax applied to both revenue and expense account types will result in a net amount being displayed wherever a total sales tax figure for this rate is reported e.g. Sales Tax Summary report.

  • You can still change the tax rate on any transaction, invoice or bill itself when you enter transactions in Xero if you don't want to use the default rate for that particular item.
  • If you change the tax here, it will apply to all transactions assigned to this account in future - existing transactions will remain at the tax rate applied at the time the transaction was created or saved. If you want to change how tax is applied to an individual transaction that uses this account, you can change the tax applied when you enter the transaction using Accounts > Receive Money, Accounts > Spend Money, Sales > Add Invoice or Purchases > Add Bill.
  • If you change a tax rate on an account that an inventory item uses, also update the inventory item.

Select

Save

button - cancel-61225426.png

Save

Create or update the account using the details entered.

Cancel

Exit this screen without saving any of the changes entered.

Delete or archive accounts

Choose account

Archived accounts are stored on the Archive tab and can be used again later.

Your user role will determine whether you can delete or archive accounts.
Settings role comparison

During the set up phase, you can permanently delete accounts you don't need (other than locked accounts). After you've set up Xero, you'll also be able to archive accounts, which means you have the potential to restore them later if necessary.

Check the box next to the account you want to remove, then click Delete. This will permanently remove the account from the Chart of Accounts.

COA delete

COA delete

Note: if you have imported a Chart of Accounts that has balances included in the file, or you have balances to enter against certain accounts, you will need to choose a new account to enter the balance against when you get to the 'Account Balances' step in the Setup Guide.

Note: if you have balances to enter against certain accounts, you will need to choose a new account to enter the balance against when you get to the 'Account Balances' step in the Setup Guide.

Deleted or archived accounts are no longer shown in the list of accounts that makes up your Chart of Accounts.

On any tab (except the Archive tab) use the check boxes to select (or deselect) the accounts you want to delete or archive. Select (or deselect) all accounts by using the very top check box.

Select the Delete button once you've ticked the account you want to delete.

Once you have made your selection, click Delete or Archive to remove the account from the Chart of Accounts. Archived accounts will be moved to the Archive tab where you can still access them. Xero will tell you if you have selected accounts that can’t be deleted.

You can restore an archived account from the Archive tab.

What is the difference between deleting and archiving accounts?

Select

Delete button

Archive button

Delete or archive individual accounts

You can also delete (or archive) each account individually by clicking on the account's YTD figure to get to the Account Details screen.

Delete account from account details screen.

Delete account from details screen.

Delete button on Account Details screen.

Archiving vs deleting accounts

You can only delete an account which is not locked and has no transactions coded to it (and therefore no journals created).

If an account has (or has had) transactions in it, and is not locked, it can be archived, but not deleted.

Archive available but not delete if account has transactions on it.

System or locked accounts can not be deleted or archived.

Full details on deleting and archiving accounts are below:

Deleting accounts

What can be deleted?
  • You can delete any account except a system or locked account.
  • You can delete any accounts that have not had any transactions coded to them, except:
  • Bank accounts which haven't had any transactions through them yet can be deleted, whether they've been used in a condition of a bank rule or not.

Note: Even if an account has a balance of 0.00, you will not be able to delete it if there have ever been any transactions coded to that account. This is the case even if all the transactions in the account have been deleted. You'll need to archive the account instead.

Deleted accounts are completely removed from Xero
  • You cannot view or access deleted accounts again, and they will not show up in reports.
  • Deleted accounts will not be available to choose when entering or editing an invoice, bill or transaction.
  • The code that was assigned to this account can be used again.
  • If the account has been used on an inventory item, you'll need to update the inventory item's account to another account. Until then, any new invoices or bills entered or existing ones edited that use the inventory item will have the account field left blank on the invoice or bill.

If you're using Xero Partner Edition, only users with the Adviser user role can delete 'standard' accounts. Any user can delete bank accounts.

Archiving accounts

You can only archive accounts that have balances, not delete them. This is because Xero includes balances in reports you run.

Codes used by archived accounts cannot be used again.

What can be archived?

You can archive any account (including bank accounts) at any time even if it has a balance, except:

Bank accounts can be archived even if it is in use in a condition of a bank rule.

Archived accounts can be restored and still show in some places
  • Archived accounts are moved to the Archive tab where they can be accessed and viewed as normal, and restored if you decide you want to bring them back into the Chart of Accounts.
  • Archived accounts will not be available to choose when entering or editing an invoice, bill or transaction.
  • The account will still display on invoices or bills that have been approved (i.e. is Awaiting Payment or Paid). If invoices or bills are Draft or Awaiting Approval they will need to have another account chosen.
  • If the account has been used on an inventory item, you'll need to update the inventory item's account to another account. Until then, any new invoices or bills entered or existing ones edited that use the inventory item will have the account field left blank on the invoice or bill.
Archiving accounts you no longer want to see in reports

Archived accounts will be used in reports as long as the balance of the account is not 0.00.

If an account has transactions in it that you no longer want to see in reports, you can delete all the transactions individually before archiving the account.

If the account has a conversion balance, you'll need to remove this (thereby reversing the conversion balance journal) by editing the balance on the Conversion Balances screen.

If you've already archived the account and you want to do any of this, you'll need to restore the account first.

If you're using Xero Partner Edition, only users with the Adviser user role can archive 'standard' accounts. Any user can archive bank accounts.

‘Locked’ & System accounts

coa - lock icon.png coa - lock recurring icon.png

Your user role will determine whether you can edit locked or system accounts.
Settings role comparison

‘Locked’ & System accounts

You cannot delete system accounts. System accounts are set by Xero and are used for specific reporting or accounting purposes. They are identified by the padlock icon.

You cannot archive or delete system accounts or locked accounts. They are identified by a padlock icon.

System accounts are set by Xero and are used for specific reporting or accounting purposes.

Locked accounts are needed for specific purposes in your organisation. For example, an account can be locked because it's needed on a repeating invoice or bill template. (It will have a padlock icon with an arrow on it to indicate the repeating invoice or bill connection.)

You can still edit locked and system accounts as described above. You can also enable payments to locked accounts.

The Xero system accounts are:

  • 610 – Accounts Receivable
  • 800 – Accounts Payable
  • 801 – Unpaid Expense Claims
  • 120 - Accounts Receivable
  • 200 - Accounts Payable
  • 210 - Unpaid Expense Claims
  • 215 - Wages Payable
  • 220 - Sales Tax
  • 255 - Historical Adjustment
  • 260 - Rounding
  • 265 - Tracking Transfers
  • 320 - Retained Earnings
  • 810 - Bank Revaluations
  • 815 - Unrealised Currency Gains
  • 820 - Realised Currency Gains
  • 820 - GST
  • 820 - VAT
  • 820 - Sales Tax
  • 840 - Historical Adjustment
  • 860 - Rounding
  • 877 - Tracking Transfers
  • 960 - Retained Earnings

If you are using the multi-currency option in Xero there are 3 additional system accounts for the specific treatment of foreign currency accounting and reporting. Find out more here in Foreign currency settings & options.

Locked payroll accounts

If your organisation uses Xero Payroll, some other accounts will also be locked because they are:

  • default accounts in Settings > Payroll Settings > General
  • control accounts for pay items (for example, earnings rates might use 477 - Wages and Salaries)
  • used on a pay template (the expense or liability account on a superannuation line)
  • associated with any other line on a payslip.

Editing system accounts

While you can edit system accounts, the behaviour of these accounts is controlled by their underlying system status and this determines the treatment of transactions assigned to these accounts.

  • Depending on the use of the system account you might not be able to create manual journals or transactions against it e.g. Accounts Payable, Accounts Receivable you can't, Rounding you can.
  • You can't delete or archive system accounts or enable payments to them.
  • You can edit system accounts to change their account type for report display purposes only i.e. changing the account type will determine how the account is treated on reports but the underlying behaviour of the account will still be determined by its 'system' status e.g. Accounts Payable will always be used for unpaid bill amounts and cannot be used to code a bill to.
  • We recommend that you don't change these accounts to the extent that you want them to be used for something else - just change the code or description to use numbering and language that suits your business if you want to more easily recognise them on reports. For example, 820 - GSTVATSales Tax represents the GSTVATSales Tax portion of your transactions on the Balance Sheet and regardless of the name and number you give this account, its system status will mean that this account will always be used for GSTVATSales Tax.
  • We recommend that you don't change these accounts to the extent that you want them to be used for something else - just change the code or description to use numbering and language that suits your business if you want to more easily recognise them on reports. For example, 220 - Sales Tax represents the Sales Tax portion of your transactions on the Balance Sheet and regardless of the name and number you give this account, its system status will mean that this account will always be used for Sales Tax.

Balance sheet

Balance sheet

Locked accounts - Xero Partner Edition

If you're using Xero Partner Edition, users with the Cashbook Client user role will be able to view all accounts created, but the accounts are locked. The exception to this is bank accounts, which are open for Cashbook Client user roles to edit, delete, archive or restore.
Cashbook Client user role

View only