Welcome to the Fit Small Business Xero
training course. In this lesson we're
going to cover how to set up customers
in Xero. To follow along with me log in
to your Xero account now or click the
link below this video for a free 30-day
trial of Xero. You can also click this
link to access our full Xero course and
other helpful resources. Let's get
started. If you're converting from
another accounting software to Xero, then
you know how much time you can save by
having access to your customer contact
details like contact person, email
address, and telephone number, all in one
place. Beyond contact details, you can set
up custom payment terms for example net
30, and special sales tax rates if your
default settings do not apply to a
specific customer. Xero also has a couple
of great sorting tools called smart list
and groups which can help you save time
when invoicing customers or setting up
email marketing campaigns. We will chat
more about both of these later on.
In this lesson we'll focus on how to set up
customer contacts manually. However, if
you have an existing customer list that
you would like to import into Xero, then
check out our How to Import Customers
Into Xero lesson. You can click here to
access this lesson. Once you have
imported your customer list, you can come
back to this lesson to learn more about
how to modify your customer information.
In Xero anyone who pays you money is
considered a customer contact. Anyone you
pay money to is considered a supplier
contact. Based on the type of transaction,
for example invoice, bill, or credit note,
Xero will automatically group your
contacts as customers, suppliers, or both.
For example, if you purchase products or
services and sell products and services
to the same company, they will be set up
as both a supplier and a customer
contact in Xero although customers and
suppliers are added under the same menu,
there are different fields you need to
focus on for each. If you want to add
suppliers, you can click here to access
this lesson. To add a customer contact we
want to go ahead and navigate
to the contacts menu and select
Customers. Go ahead and click the add
contact button here on the right.
And here is our customer contact information
setup screen.This screen is broken up
into two parts: contact information and
financial details. We'll go ahead and
cover the contact information first.
In the contact name field you want to enter
your customer's name in this field. If you
assign a unique number to each
customer to identify them, enter that
information in the account number field
here. This number can be alphanumeric.
Primary person: in this field you want to
go ahead and enter the name and the
email address of your primary contact.
If you have more than one contact, you can
click this link that says add another
person and add any additional contact
person here. In the next three fields you
want to go ahead and enter the telephone
number, fax number, and a mobile or cell
number if applicable for your customer.
For Skype name or number go ahead and
enter the Skype ID for your customer.
This is going to be ideal if you plan to
communicate with your customer via Skype.
In the website field go ahead and enter
your customer's website if they have one.
Postal address: you want to go ahead and
enter the mailing address where the
customer would like to receive their
invoices, and other correspondence from
you. Go ahead and enter
that information in this field.
Below the mailing address
is the street address. Enter the physical
address of where your customer is
located in this field. This information
is important when it comes to
calculating sales tax. In the How to
Set Up Sales Tax lesson, we discussed how
to properly set up sales tax. You can
click here to access this lesson. If the
street address is the same as the postal
address, you can click this link and go
ahead and have that information copied
down to these fields. While it might seem
time-consuming to enter this information
now, it's important to set aside the time
to do this. Because this data will be
used for email templates, reports, any apps
that you add on from the marketplace, and
a variety of other tasks. Now the
financial details. In Xero the setup
screen for customers and suppliers is
identical. For the purposes of this
lesson we're going to focus on the
fields that will relate to customers
only for financial details. The fields
that are related to suppliers will be
discussed in the next lesson: How to Set
Up Suppliers. You can click here to
access this lesson. Remember that any
information that you enter here will be
default settings for your customer.
However, you can override this
information when you create invoices,
quotes, or credit notes for your
customers. Alright let's talk about sales
settings. From the drop down menu you can
select from one of the following tax
options. Tax inclusive: this option will
include tax for each taxable item on
invoices and credit notes that you
create for customers. Tax exclusive: this
option will show tax separately on
invoices and credit notes or purchase
orders that you create. No tax: select
this option if you are not required to
charge your customers sales tax. So we'll
go ahead and select the no tax for this
customer. Default account: from the
drop-down menu, you can assign a default
account that will be used on all sales
transactions that you create for this
customer. For example on invoices and
credit notes. I recommend that you leave
this field blank unless the product or
service that you sell to the customer is
always the same. Default tracking
category: Xero allows you to set up
tracking categories that will allow you
to see how different areas of your
business is performing. For example
departments, locations, or in this
particular example - regions has been set up.
Tax: generally you would need to keep
your supplier's tax ID number and not
your customer's on file for 1099
reporting. However, if for some reason you
do need to keep your customer's employer
ID number on file, you can enter it in
this field. Otherwise, you can leave this
field blank. Tax on sales: from the
drop-down you can select the appropriate
tax rate for the customer. If you have
not set up sales tax rates, head over to
the Setting Up Sales Tax lesson to learn
how to track and manage sales tax.
You can click here to access this lesson.
If sales tax is not applicable, select the
default rate tax on sales 0%.
Sales discount percent: if a customer should
receive a discount on everything that
they buy, you could enter the discount in
this field to ensure that it is applied
to every transaction created for the
customer. You want to be sure to enter
this number without the discount
percentage symbol. Invoice due date:
in the How to Setup Organization and
Financial Settings lesson, we set up
default due dates for all invoices.
You can click here to access this lesson.
If you have special payment terms for a
customer that are different from the
default payment terms, then you need to
set those payment terms up here to
override the default payment terms. To do
this you can select from one of the
following options: you can select a due
date that will occur in the following
month, you can setup certain number of
days after the invoice date as a due
date, certain number of days after the
end of the invoice month as a due date,
or you can set up a specific date of the
current month. So in this example we'll
go ahead and say our customer invoices
are due 30 days after the invoice date.
The Xero network key also known as Xero
to Xero, is a unique and
network key that is assigned to each
organization. By entering the Xero
network key for a customer you will be
able to send and receive invoices and
bills directly into your Xero account
from other Xero users. You can find
step-by-step instructions on how to send
a zero network invite to another zero
user by clicking the link below.
Once you've entered all the necessary
information for your customer contact
you want to go ahead and save. And then
we receive our notification that our new
company has been saved. So from this
screen it's fairly easy to go back in if
for any reason you need to make any
changes to your customer contact. All you
have to do is simply click on this edit
button and it will open up the contact
information that we just entered. And you
can actually make your changes. And then
just save them. If you go back to the
contacts page, in the contacts screen you
can see a list of your customer contacts,
the email address that you've entered,
and then we have a column that shows the
amount that you owe, so that would
typically be to your suppliers, and the
amount that they owe you which will be
money that is owed to you by your
customers. Also known as your accounts
receivable. Once you set up a contact in
Xero, you cannot delete it however you
can archive a customer that you no
longer plan to do business with. When you
archive a customer you will still be
able to view the customer and any
transactions that have been created.
However, you will not be able to create
any new transactions for that customer.
The good news is that if you decided to
resume business with the customer,
you can easily restore the customer
contacts so that it can be used again.
Let's walk through the steps to archive
a customer contact,
and then we will also show you
how to restore a customer contact
that was previously archived. From the
customer list you want to go ahead and
just put a checkmark in the box for the
customer that you want to archive.
Up here you want to click on the options
button and select archive. This is the
confirmation: Are you sure that you want
to archive this customer. And we want to
go ahead and proceed. If you've changed
your mind you can simply click cancel.
To restore a customer contact that was
previously archived, you can actually
click on the archive to group that's
located here to the left. Click on that
group to display the contacts that have
been archived. Then we want to go ahead
and click on the customer that we want
to restore. It's pretty simple there is
only one here, so we'll click on that one.
And then you'll notice here in the upper
right hand corner, the restore button.
So we'll go ahead and click restore.
And Xero wants to confirm that we want to
restore this customer so we'll go ahead
and click restore again. And now we got
the confirmation that our customer has
been restored. After you have saved all
of your customers in Xero, you can sort
them using smart lists and groups.
Among other benefits, this allows you to gain
insight to additional products or
services that you can offer your
customers, stay on top of outstanding
customer invoices and payments, create a
list of customers who live nearby,
and segment your customers for marketing
promotions. Let's take a look at how
smart lists and groups can help you get
the most out of your customer contact info.
A smart list is created by
selecting criteria to filter your
contacts and automatically add to a list.
For example you can create a filter
based on inventory items purchased,
outstanding customer invoices,
or geographical location
of your customer. Here are the
searches that are already set up in Xero.
Or you can also create your own. So right
below smart lists we've got: have purchased
an item, outstanding greater than 30 days,
overdue greater than 7 days, paid us in
the last year, or the link here to add a
new search. Let's say our fictitious
company Acme Web Pros Plus would like to
know which customers have purchased a
website from them. They can run the
customers who have bought an inventory
item or purchased an item search, and
select build website as the inventory
item. These search results can be
exported to your email marketing program
to send specialized promotional emails.
Xero allows you to export contacts
directly to contact, or another email
marketing program using a CSV file.
To begin the search you want to go ahead
and click on have purchased an item and
then we want to set our search criteria.
So using our website example we want to
go ahead and set our conditions for the
search to all customers that have
purchased a website. From this field we
want to say all customers that meet
these conditions, that have purchased.
There's other options you can select
here like invoice, payments, location, and
contact group. And we want to actually
say they purchase a specific item so
we'll make that change. And then from the
drop-down if you've set up your inventory
items you should be able to locate the
item that you want to do the search for.
And this last field here allows us to
select the timeframe. So we want to go
ahead and pull any customer that has
purchased a website at all.
So we will say: ever.
And then if you had additional conditions
you wanted to add you could. This will do
it for our example so we'll go ahead and
click run search. And here are our results.
Looks like Acme Web Post Plus has had a
total of four customers who have
purchased the website from them, and it
shows you this here. As we discussed you
can export these results to a CSV file,
or directly to constant contact.
While constant contact is a pre-installed
integration you can also check out the
Xero app marketplace which offers 500
additional integrations with a wide
range of business software. You can
access the marketplace by clicking the
link below.
While smart lists are used to create
targeted customer lists that you can
export out of Xero, groups offer a way to
organize both customer and supplier
contacts within Xero. For example, you can
create a group for customers who are on
a monthly billing cycle.
If these customers are also billed the
same amount then you could also create an
invoice for each contact in the group.
On the left hand side here of our menu you
will see groups. So we've got one group
are ready to created called Monthly
Customer Billing. And so let's go ahead
and create a new group called Quarterly
Customer Billing. So to do that you can
go ahead and click on the new link here.
Once you have named your group go ahead
and save it.
And now you can see in addition to the
Monthly Customer Billing we've got our
Quarterly Customer Billing here as well.
To add customers to a group you simply
select the customers that you'd like to
add to that group by putting a check
mark to the left of the customers.
Click on the options up here at the top and
select add to group. And then go ahead
and click on the group that you'd like
to add the customers to and click the
add button. And then we've got our
confirmation that three contacts have
been added to the quarterly customer
billing group. Going back to the smart
list really quickly, I wanted to show you
that you can also add contacts from a
smart list to a group. This is our search
that we completed for the website and so
we simply can select - put a check mark
here to select all the contacts so we
could have just selected individual ones.
Click the options button and you can
click add to contact group to add these
contacts to a contact group that we've
set up. That wraps up the lesson on how
to set up customers in Xero. To access
our full Xero course or any of the other
lessons in this series click this link.
You can also find a link below this
video for a free 30-day trial of Xero.
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