The Xero chart of accounts is the master list of all accounts used to categorise transactions in your Xero organisation. It defines how financial data is structured and reported.
Every Xero organisation has a chart of accounts that defines the structure for categorising all financial transactions. Xero provides a default chart of accounts that covers common business needs, but it can be customised extensively. Accounts are organised by type: revenue, direct costs, expenses (overhead), fixed assets, current assets, current liabilities, non-current liabilities, equity and other types. Each account has a code, name, description, tax default and reporting category. A well-structured chart of accounts balances detail (enough accounts to see meaningful patterns) with simplicity (not so many that transactions are spread too thin). Most small businesses need 30-50 accounts. SortBooks learns your Xero chart of accounts structure and maps transactions to the correct accounts based on AI analysis of the transaction details and your historical categorisation patterns.
SortBooks helps with the bookkeeping behind xero chart of accounts by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing xero chart of accounts by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
The chart of accounts is a structured list of all accounts used in your accounting system to categorise transactions. It defines the categories for your income, expenses, assets, liabilities and equity.
Xero is a cloud-based accounting platform designed for small businesses. It provides invoicing, bank reconciliation, payroll, reporting and integrations with over 1,000 third-party apps.
Transaction categorisation is the process of assigning each financial transaction to the correct account in your chart of accounts. It is the core activity of bookkeeping.
The general ledger is the master record of all financial transactions in a business, organised by account. It forms the basis for preparing financial statements.
Financial statements are formal reports that summarise your business's financial position and performance. The three core statements are the profit and loss, balance sheet and cash flow statement.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.