Manage a trust account in Xero

Manage a trust account in Xero by setting it up as a separate Xero organisation.

Alternatively, you may wish to consider using an app partner for your trust account requirements (xero.com website).

Trust accounts sometimes carry particular legal requirements. We strongly recommend you consult with your accountant or bookkeeper about the best method for your organisation.

Use a separate organisation to manage a trust account

Set up a new organisation in Xero so:

  • The trust account is entirely separate from other day-to-day transactions
  • You can report solely on the trust account

Follow these steps:

  • Set up your new organisation
  • Add current liability account in each client's name
  • Reconcile: code statement lines to the client
  • Run reports for trust account

Set up your new organisation

Add a new organisation for your trust account.

Choose your pricing plan

The pricing plan you choose will determine which features you can access.

If you're a Xero accounting partner, there are 2 cost-effective partner edition plans:

  • Cashbook plan
    • Get automated bank feeds for your trust account.
    • Manually journal any related entries you need to post in your practice’s accounts.
  • Ledger plan
    • No automated bank feeds, so you'll need to manually import bank statements.
    • Manually journal any related entries you need to post in your practice’s accounts.

If you're not a Xero accounting partner, use a business edition plan.

Add current liability account in each client's name

For each client transacting through the trust account, add a current liability account in their name.

Reconcile: code statement lines to the client

When it's time to reconcile statement lines imported into Xero, code the transaction to the relevant client.

Run reports

To report on the trust account, use a combination of these position reports: