How to correctly set up your contacts in Xero

10 Feb

Before you start sending invoices or reconciling transactions in Xero, it helps to have the right foundations in place. Your contact list is one of the most important.

If you’ve ever chased the wrong email address or duplicated a supplier by mistake, you’ll know how quickly small admin issues can snowball. A tidy, accurate contact list is one of the simplest ways to keep your Xero running smoothly.

Xero makes contact management simple for all users. Setting it up properly will save you valuable admin time, eliminate repetitive manual tasks and help you avoid errors down the line. This blog explains how to do it.

Creating a new contact in Xero

Manually adding a new contact in Xero is simple:

Open the Contacts menu and select All Contacts
Click on New Contact.
Enter the contact information into the relevant fields.
Click Save & Close.

As well as their name, you’ll have the option to enter all the usual fields, such as email, phone number and address, as well as being able to add in their financial details or account numbers.

All the details you have on file can then be automatically pulled through onto documents like invoices or purchase orders, making your processes quicker and more accurate.

Setting payment terms

Xero allows you to set up customised payment terms for your invoices, determining how you’d like the payment to be sent, when payment is due, which currencies you accept and penalties for overdue payments.

As a general rule, Xero recommends setting a 7-14 day payment term in most cases, but you can also request 30 or 60 day terms from the point the invoice is sent, along with payment in advance, cash on delivery, or payment at the end of the month. The deadline you choose will depend on how your business operates.

You can also set up automated reminders for customers and clients that their payment is due, so that you no longer have to spend time chasing unpaid invoices.

Using contact groups in Xero

You can divide your contacts into custom groups, for example, ‘Customers’ or ‘Suppliers’, depending on the needs of your business. This means you can send invoices to entire groups in one go and filter your sales and purchase reports by group.

This guide explains how to create groups for your contacts or add existing contacts to a new group.

Being able to perform an action for a whole group at once can be a significant time saver.

Importing multiple contacts into Xero at once

If you have a large bank of existing contacts, manually entering each one can be a mind-numbing and time-consuming task.

Instead, to save time, you can import multiple contacts in one go using a .csv or Excel file.

Xero offers a free template you can use to build this file, which can be found in the Contacts menu. To access it, click All Contacts, then the menu icon in the top right corner of your screen, select Import, followed by Download Template.

Next, open the template and enter your contacts’ details. While the primary contact’s name must be entered, any other information is optional. You can import up to 1,000 contacts per file.

To ensure the import goes as smoothly as possible, ensure the data you enter goes in the correct column(s) and that you haven’t exceeded any character limits. Also, ensure all email addresses are formatted correctly (email@domain.com). If you’re importing bank details, you must have the admin user permission.

Importing into Xero

Once your file is ready to import, follow these steps:

Open the Contacts menu and select All Contacts
Open the menu icon in the top right corner of your screen and select Import.
Click Select File and open your saved template file.
Select for empty fields to be ignored, then hit next, followed by Complete Import.

Once imported, you’ll be able to manually update individual records at any time in Xero.

Best practices for contact management

It’s advisable to check regularly for duplicate or outdated contacts and ensure that any changes to customer or supplier data are kept up to date. Periodically reviewing which contacts you no longer need and archiving inactive customers and suppliers is also a useful practice. It helps reduce clutter and keep your list streamlined with only essential contacts.

Keep your naming conventions consistent, for example, providing a full first name versus an initial. This helps to prevent duplication and makes your reports easier to read.

Once your contacts are set up in Xero, you can link them directly to invoices, bills and reports. This means every transaction you record is automatically associated with the right customer or supplier, ensuring that your records are accurate. Xero will automatically fill in their details each time, reducing mistakes and speeding up the process.

How Progression Accountancy can help

While adding a single contact to Xero is a simple process, errors can sometimes arise from incorrectly importing contacts in bulk, creating groups or linking individuals to invoices, bills and reports. You might need a helping hand to do it right.

At Progression Accountancy, we offer expert support for setting up your contacts correctly in Xero, and provide bespoke training to show you how to maintain and organise your contacts.

Working with us can save you time, help you avoid errors and give you peace of mind that everything in Xero is working correctly and efficiently for your business.

So, if you’re interested in receiving training and guidance on creating contacts or any other aspect of your Xero setup, contact us today to find out how we can help you.