How to Add an Expense Account in Xero

Quick summary

Adding an expense account in Xero is done through the Chart of Accounts under the Accounting menu, where you select an account type and fill in the required details. This process lets businesses categorize spending accurately for cleaner financial reporting and tax compliance.

Steps

1. On Xero's main dashboard, go to the top menu bar and click Accounting.
2. Select Chart of Accounts from the dropdown list of options.
3. Click Add Account to open the new account form.
4. Tap the Account Type menu to expand the account type options.
5. Under Expense, choose the ideal account type you wish to use (for example, Direct Costs).
6. Enter all other required account details into their respective input fields.
7. Review your input and click Save to confirm the new account.
8. The new expense account will be confirmed and added to your Xero organization.