20/05/2026
Stop! Maybe you don't need to add another code in Xero...
Your chart of accounts is the backbone of your finance system.
It's the list of categories you can choose when you're doing your bookkeeping.
And it's the framework that determines what your accounts look like.
Ideally it should be as simple as possible, to make the accounts easy to read.
If you need more detailed information, consider using tracking codes (or classes).
These are tags that allow you to chop your accounts up into mini reports for just those categories.
So you could have restricted vs unrestricted funds.
Budget holders.
Regions.
Specific projects.
All whilst still using the same list of codes.
Imagine a supermarket chain. They sell products in different categories across thousands of shops, but they won't show each one in their accounts.
They'll be able to tell you by product how many they've bought and sold, though.
Or how much profit each shop makes.
Because each one still has sales and costs in the same way.
They'll keep the financial reports clean and in the same structure, and have the detail saved in the background.
So before you add a new code, stop and think about whether it's the right way to get the data out of your system.
Or if you're just making it more complicated than it needs to be.
__________
In case we haven't met, I'm Jennie, The Financial Storyteller. I help you get clarity and guidance from your numbers, to drive your business forward.
