48-Hour Xero Setup Guide 2026

Setting up Xero as a UK trade business doesn’t need to mean hours lost to paperwork. This 48-hour guide walks you through getting Xero working for your business quickly—so you can win jobs, send invoices, get paid faster, and reduce hassle.

1. Why Xero Makes Sense for UK Trades

No-fuss accounting for builders, plumbers, electricians, and more

Trade businesses usually have enough on with quoting, job changes and chasing payments. Xero helps tackle cashflow headaches, keeps your VAT and CIS in check, and takes a load off admin. The right setup means less time lost to spreadsheets or paper, and more to earning.

Track money in and out with ease
Lightning-fast invoice and quote generation
Mobile access – do admin on site, not at midnight

2. Preparing for Xero Setup: What To Get Ready

Your checklist before logging in

You don’t need to be an accountant, but a bit of prep makes day one easier. Round up recent bank statements, job sheets, any old accounting records, and lists of regular customers and suppliers. Decide who needs access—maybe your bookkeeper, partner, or anyone helping on admin.

Bank account details (including business accounts)
Customer and supplier lists (names, contact info)
Any details on VAT registration or CIS status

3. Step 1: Create Your Xero Organisation

Quick tips to hit the ground running

Sign up for your free trial using your business details. When prompted, choose the right financial year (usually April–March for UK), enter your business info, and select your industry type as a trade or construction business. This helps Xero suggest the best settings later.

On-the-tools advice: Use your official details, or HMRC filings won’t match up when it’s time for VAT or tax returns.

4. Connecting Your Bank Accounts

Automate reconciliation and spend less time on admin

Most UK business accounts connect automatically to Xero—Barclays, Lloyds, NatWest, and more. Once linked, your bank feed streams transactions in daily. You then match payments, bills and receipts in one screen, massively cutting reconciling time. It’s particularly handy if you’re watching your cash closely between jobs.

5. Setting Up VAT, CIS, and Other Compliance

Stay on the right side of HMRC from day one

Xero helps keep you compliant, but only if you tick the boxes at setup. Choose your VAT scheme (Flat Rate or Standard), and switch on Construction Industry Scheme if it applies. Set VAT rates for your income and expenses, so future invoices pick these up automatically.

VAT threshold awareness—register ASAP if closing in on the limit
Use Xero’s built-in support for CIS deductions
Record insurance, indemnities or HSE costs by making expense categories

For bigger business challenges, see Xero for Growing Businesses: When Excel Stops Working.

6. Adding Customers, Suppliers, and Staff

Keep jobs moving and avoid invoicing errors

Bring all your contacts into Xero—whether you work mostly with homeowners, property managers, or commercial clients. Include typical payment terms for each, so Xero builds accurate due dates onto your bills and invoices. Invite your bookkeeper or key team so everyone’s working off the same records.

7. Invoices, Quotes, and Taking Payments

From quote to cash—faster, clearer, less admin

Set up branded templates for your quotes and invoices, with options for deposit requests, variations or change orders. Send direct from Xero by email or SMS, even from your phone. Connect your Stripe or GoCardless account so customers can pay with a click, speeding up cash flow and reducing the need to chase payments.

On-the-tools advice: For those jobs that expand (like when the client says ‘just add the patio’), you can update your quote and send it on instantly—then invoice the extra as soon as it’s agreed.

8. Managing Bills, Materials, and Purchases

Contain costs and avoid missed supplier payments

Enter supplier bills, receipts and material purchases as you go—on your mobile if you like. Xero attaches PDFs and pictures, so there’s no digging through van seats or old folders. This will also help you pick up small supply price increases before they smash your margins.

9. Keeping On Top of Cash Flow and Job Changes

Looking ahead, not just looking back

Xero’s dashboard makes it easy to see what’s owed and due, helping you spot gaps between jobs and flag slow payers. Run aged debtors reports weekly—make it a habit to call up late payers before a problem grows. Track variations or delays due to weather, and amend invoices as things change to avoid disputes later.

Set reminders for overdue invoices
Log daily job changes, especially weather hold-ups, directly in notes

Comparing your options? Check Xero vs QuickBooks in 2026: Which Is Better for Small Business?

10. Integrating Xero With Job Management and Scheduling Apps

Smoother workflow and no double-handling

If you use job management tools, many of these now connect directly with Xero. That means quotes, jobs and materials go straight into your accounts—no extra admin. Look for integrations that let your office or partner update job progress as you work, cutting back-and-forth calls and missed info.

11. Mobile Use: Running Xero From Site or On the Go

Do admin whenever you get a minute

Xero’s mobile app covers quoting, invoicing, receipts, and even basic reporting. Take pictures of receipts as you collect materials. Raise or update quotes while at the property. You can even check who’s overdue on payment between jobs from your phone, reducing unpaid debts.

12. Managing Growth – When Xero Needs Upgrading

Spot signs you might need more from your software

If your trade business is taking on more staff, bigger contracts, or extra sites, Xero can scale with add-ons and users. But it’s also important to know the limits—very large teams or groups of businesses sometimes need specialist systems. For more, see When to Leave Xero: Signs You’ve Outgrown It.

Frequently Asked Questions

How long does it actually take to get Xero set up for my trade business?

Most sole traders and small trade companies can get Xero fully set up in under two days—often less if you’ve already got your bank info and contacts ready. Some setup, like bank feeds and invoice branding, is fast. Larger setups or bringing in old data may take a little longer.

Do I need an accountant to set up Xero?

No, you can set up Xero yourself, especially for basic needs like quotes, invoices, and reconciling daily transactions. But if you’re dealing with VAT, CIS, or plan to scale up, having a bookkeeper or accountant look over your setup can help you avoid costly mistakes down the line.

Will Xero work if I’m VAT registered or use CIS?

Yes. Xero is built with UK VAT and CIS compliance in mind. You just need to enable the right settings during setup and fill in your registration numbers. This makes it easier to claim deductions and file directly with HMRC.

What happens if I make a mistake during setup?

Xero lets you make changes to most setup details. You can edit contacts, invoice templates, and financial settings if needed. If something goes wrong with bank feeds or VAT settings, Xero’s helpdesk or your accountant can usually help fix it quickly.

How do I connect my UK business bank account to Xero?

Most UK banks connect directly to Xero using secure feeds. You just log in and authorise access the first time, then your transactions update automatically each day. This saves hours compared to manual entry or spreadsheets.

Can I do all my quoting and invoicing on my phone?

Yes. Xero’s app allows you to create and send both quotes and invoices directly from your mobile. You can add line items, materials, or even job variations on the go, helping you win jobs faster and get paid sooner.

What about recording materials bought at the merchant?

Snap a picture of your receipt at the counter and save it straight into Xero’s app. You can tag it to the right job or invoice. This means no more hunting for receipts at tax time, and you keep on top of job margins more easily.

Does Xero help with late payers?

Xero flags overdue invoices and can send automatic reminders to customers. You also get up-to-date reports on who owes money and for how long, making it easier to chase payments before they become a bigger problem for your cash flow.

Can I use Xero to handle subcontractors and CIS payments?

Yes, Xero allows you to process CIS deductions, pay subcontractors, and produce statements required by HMRC. It’s important to set up your CIS scheme correctly at the start to make monthly returns simpler.

What if I outgrow Xero as my business expands?

Xero suits most small to medium UK trade businesses, but if you add more complex needs—like multi-site operations or group structures—you might eventually need heavier-duty software. Xero’s integrations and add-ons provide flexibility, and it’s easy to export your data when needed.

48-Hour Xero Setup Guide for Small Businesses (2026)