Here’s how to do it: 

1. Set Up Expense Categories: 

  • Log in to Xero and go to the dashboard. 
  • Click on “Accounting” in the left-hand menu and select “Chart of Accounts.” 
  • Click “Add Account” to create new expense categories, and choose the appropriate account type (e.g., Expense). 
  • Enter the account name and other necessary details, then click “Save” to add the category. 

 

2. Add Expenses Manually: 

  • Go to the “Business” tab and select “Bills to Pay.” 
  • Click “New” and select “Bill” or “Spend Money” depending on the nature of the expense. 
  • Enter the supplier details, the amount, and assign the correct expense category from your Chart of Accounts. 
  • Once all details are entered, click “Save” or “Approve” to track the expense. 

 

3. Add Expenses via Mobile App: 

  • Open the Xero mobile app on your smartphone. 
  • Navigate to “Add Expense” and manually enter the details of the expense. 
  • Attach receipts or photos as needed for record-keeping, then click “Save” to log the expense. 

 

4. Track and Categorize Expenses: 

  • Xero will automatically categorize the expenses based on the categories you’ve set up. 
  • You can view categorized expenses in your expense reports or track them within specific categories for better financial management. 

 

5. Generate Expense Reports: 

  • Go to the “Reports” section under Accounting to view detailed expense reports. 
  • Choose the date range and customize the report to analyze your business expenses. 

 

By following these steps, you’ll be able to set up and effectively track expenses in Xero.