CFO Tech'Hack': Think outside the box to maximise Xero's tracking categories

Xero’s user-friendly accounting software offers two active tracking categories to manage and report on business operations. This limit challenges complex reporting needs, but targeted hacks expand capabilities for powerful insights.

To overcome this, use these strategies for enhanced financial tracking and reporting in Xero.

Combine and conquer

A simple yet effective hack combines related data into one category using a delimiter like a hyphen or pipe. For tracking Geography, Sales Team, and Department, merge Geography and Sales Team as ‘UK - Team A’, ‘UK - Team B’, ‘USA - Team A’. Analyze via coding, scripts, Excel, or tools that group and filter data.Calxa's ‘Business Unit Combinations’ enable this seamlessly.

“I’d always encourage keeping your GL less complicated, so use this trick before segmenting your GL by too much detail” – Luke Streeter, COO and Co-founder at flinder

This method captures two data layers in one category, splittable for reports. Maintain consistent formatting for reliability.

Detail matters: perfect your transaction descriptions

Detailed transaction descriptions turn every entry into a trackable data point. Enforce team protocols for consistency, like tagging client entertainment by client or travel by traveler. This unofficial tracking layer supports deep retrospective analysis without relying solely on categories.

The chart of accounts approach

Expand your general ledger (GL) for dimensional analysis instead of over-relying on tracking categories. A longer chart allows granular expense or revenue tracking by department, consolidated in tools like Joiin for reporting—bypassing category limits.

“We have a very, very long chart of accounts with different departments there. We don’t worry too much about having that long list in Xero because we then have the flexibility to analyse it more granularly with a tool like Joiin” – Harriet Hope, VP of Finance at Arbolus

Regularly rethink data with 'Find and Recode'

Xero's 'Find and Recode' feature searches transactions by criteria and updates account codes, tax rates, contacts, or tracking categories. This flexibility adapts to business changes like cost allocation or process shifts.

Proactively review and adjust data periodically. Embrace Xero's adaptability to keep records accurate and aligned with evolving needs. These strategies transform limitations into strengths for precise financial management.