How easy is it to set up Xero? Your step-by-step guide

You’ve decided Xero’s the right accounting software for your business. 

But now you’re staring at the setup screen, wondering where to start. The thought of setting up new accounting software makes your heart sink. You’re imagining hours of data entry, confusing settings and the nagging worry you’ll get something wrong that will haunt you at year-end.

But the truth is, setting up Xero isn’t nearly as complicated as you might think. With the right approach, you can have your accounts up and running in just a few hours. Some businesses even manage it in an afternoon.

At Progression Accountancy, we’ve helped hundreds of UK businesses get Xero set up correctly from day one. We know what works, what doesn’t and how to make the whole process as painless as possible.

In this guide, we break down the setup process, step by step. We’ll cover everything from creating your account to connecting your bank feeds, migrating your data and avoiding the common pitfalls that trip many first-time Xero users up.

Getting started

The first step is surprisingly straightforward. 

Just head to Xero’s website, click ‘Try Xero for free’, and you’re off. 

You’ll need your email address and a password. Xero will ask for your business details, including your company name, address and industry. Be accurate here, as Xero uses this information to suggest the most appropriate account structure for your business.

Next comes choosing your plan. For many small businesses, the ‘Ignite’ or ‘Grow’ plans are sufficient. You can always upgrade later if you need more features or users.

Once you’re in, take a few minutes to personalise your setup. Upload your logo. It’ll appear on every invoice you send. Customise your invoice templates with your brand colours and payment terms. Add your business registration number and VAT details (if applicable). These might seem like small touches, but they make a real difference. Professional-looking invoices get paid faster, and having your details correct from the start saves endless tweaking later.

Don’t skip the organisation settings. Set your financial year-end date, your tax basis (cash or accrual), and your GST/VAT settings. 

Most users can complete this initial setup in 20-30 minutes. 

Take your time, though. A rushed setup often means having to redo things further down the line.

migrating your existing data: what to consider

How you handle data migration depends on where you’re coming from. 

If you’re starting fresh with a new business, you can probably skip this section, as you won’t have any data to migrate.

But if you’re moving from spreadsheets, Sage, QuickBooks or another system, you’ll need a migration strategy.

First, decide what data you actually need. Focus on your active customers, current suppliers and anything that affects your day-to-day operations. 

You can import your customer and supplier contacts easily via CSV files. Xero’s import templates will show you the format it needs to work smoothly. Clean your data first. Delete any duplicate entries and update any old addresses. 

Your opening balances are critical. These tell Xero your financial position on day one. Get them wrong, and your reports will be off until you fix them. Your accountant can provide these figures from your last year-end, or you can pull them from your current system.

You can recreate any outstanding invoices in Xero or import them in bulk. Just make sure the totals match what your customers owe you, including any part payments.

Also, do you really need five years of history in Xero? Often, keeping your old system for reference and starting fresh in Xero works better. If you’re switching mid-year, though, you’ll want the current year’s transactions for accurate reporting.

Another strategy could be to use migration software - check out our helpsheet on Converting To Xero.

While basic migration can only take a few hours, if you need to import more complex data, such as multiple currencies, inventory and large transaction volumes, it may take more time. This is where many businesses call in professional help. A few hours of Xero training with Scott, our in-house Xero expert, can save you days of frustration.

making xero work for your business

Setting up Xero isn’t the mountain it might appear to be. With a clear plan and a bit of patience, you can have a system that saves you hours every week and gives you real insight into your business performance. The key is getting it right the first time. 

However, if the technical side of setting up Xero feels overwhelming, or you simply don’t have time to do it yourself, we’re here to help. At Progression Accountancy, we specialise in helping businesses like yours get set up on Xero quickly and correctly. We’ll configure everything for your specific needs and show you exactly how to use it.

So, if you’re ready to make Xero work brilliantly for your business, get in touch. We’ll help you get up and running faster than you’d think possible.

Happy Xero-ing folks!