Setting Up Xero for Your New NZ Company: A Practical Getting-Started Guide

Why Xero?

Xero is used by the vast majority of NZ small businesses and their accountants. It is cloud-based, integrates with most NZ banks, and makes filing GST returns and PAYE straightforward. If your accountant is not already recommending it, they are probably using it themselves.

This guide covers what to set up in Xero after you incorporate your new NZ company, and what to get right from the beginning.

1. Create your Xero organisation

Sign up at xero.com/nz and create a new organisation. Choose your financial year end (most NZ companies use 31 March to align with the IRD tax year), your industry, and your home currency (NZD).

Set your GST basis - most small businesses use 'invoice basis', which means you account for GST when you issue or receive an invoice. Talk to your accountant about whether 'payments basis' makes more sense for your cash flow.

2. Connect your bank account

Connect your business bank account via Xero's bank feed. Most NZ banks (ANZ, BNZ, ASB, Westpac, Kiwibank) support direct bank feeds. This means transactions flow into Xero automatically and you reconcile them regularly rather than manually entering everything.

Open a separate business bank account if you have not already - mixing personal and business finances makes your accountant's life much harder and creates problems at tax time.

3. Set up your chart of accounts

Xero comes with a default NZ chart of accounts that works well for most businesses. Your accountant may want to customise it to match how they report. Common additions for new companies: director's current account (for tracking what the director puts in or takes out), loans, specific revenue categories for your service types.

4. Configure GST if you need to register

If you expect to earn more than NZ$60,000 in a 12-month period, you are required to register for GST. If you are under the threshold you can still choose to register voluntarily. Set the correct GST filing period (monthly is most common; quarterly and six-monthly are options) and filing basis in Xero under 'Tax'.

See our GST registration guide for full details on the 60-day registration window.

5. Set up invoicing

Customise your invoice template with your company logo, payment terms (14 days, 30 days, etc.), and bank account details for direct credit. Turn on online payments via Stripe if you want clients to pay by card directly from the invoice.

6. Add payroll if you have employees

Xero Payroll (included in most NZ plans) handles PAYE, KiwiSaver, and holiday pay calculations. Set up each employee's tax code, KiwiSaver contribution rate, and pay frequency. Xero files Employment Information to IRD automatically each pay period.

Work with a Xero-certified accountant

Getting Xero set up properly from the start saves significant time and cost at year-end. A Xero-certified advisor can set up your chart of accounts, check your GST configuration, and make sure you are capturing the right information for your tax return. If you want to find a local accountant who works with new NZ companies, use our free matching service.