How to Set Up Tracking In Xero

Hi there, I’m Nick Roberts, I am an accountant who has been working in public practice for the last 12 years. 

I was an early adopter of Xero in 2007, and have been working with this platform  (as well as other accounting systems since). I would like to use my expertise to help people with their use of Xero and other accounting software solutions.

For my third blog post I would like to cover how to set up the tracking function in Xero. 

Tracking can be used to track the profitability of different departments and locations within your business.

You can have up to two active tracking categories, with up to 100 tracking options. 

Set up a tracking Category with tracking options

You can set up a tracking category with tracking options to suit your purposes, so we’ll use an example to show you how it works.

Let’s say you’re a business with four work locations. You can track sales at each location by setting up a tracking category with tracking options for each location.

1. In the Accounting menu, select Advanced, then click Tracking categories. 

1. Click + Add Tracking Category.
2. Under Tracking category name, enter the name of the tracking category. Enter your tracking option names under Category options.
3. Click Save.

Assign a Tracking Option to a Transaction

Track new transactions

You can track new invoices, bills, quotes, purchase orders, fixed assets, spend money and receive money transactions as you enter them. This will help you get better insight into your business’ performance.

Since there are different types of transactions you can track, let’s add a tracking category option to a new invoice transaction so you can see how it works. 

In this example, you’ve already set up a tracking category (Location) and tracking options (Auckland, Christchurch, Dunedin, Welington). We’ll be adding a tracking category option to a new Invoice in the retail division.

1. In the Business menu, select Sales overview.
2. Click + New, then click Invoice.
3. Fill out the invoice.
4. Select the category option for the transaction from the tracking category.
   

1. Click Approve.

Track previous transactions

Track previous transactions by adding a tracking category option to it. You can track any type of transaction including invoices, bills, quotes, purchase orders, spend money and receive money transactions, transfer money transactions, and expense claims.

1. In the Business menu, select Sales overview.
2. Click Paid.
   

1. Open the invoice you want to edit.
2. Click Invoice Options, then click Edit.
3. Add a tracking category option to your invoice.
   

1. Click Save.

Repeat these steps for any previous transactions you want to track.

If you have been operating in Xero for a reasonable period of time, you may have a large number of transactions that you want to apply tracking to. 

This may be a very time intensive project to apply to all your previous transactions, it may be more  effective to start with your current months transactions..   

Now you have learnt how to set up tracking in Xero, the next blog post will cover how to run reports with tracking enabled.  

Thank you for your time in reading this, if you have any questions or suggestions for future posts please contact me at nick@zero-tohero.com or on 0224059312. 

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