1. Once you have done a log book for your vehicle usage you will then need to code your motor vehicle transactions accordingly.
2. Let’s say your vehicle split is 80% business and 20% personal which means that 80% will go to motor vehicle expenses and 20% will go to drawings
3. You can create a rule for this by going to Manage Account on your dashboard and click Bank Rules
4. Click on create rule and select Spend Money
5. In the 1^st column you will select ‘payee’ and in the 2^nd column select ‘contains’ and then in the 3^rd column type in the name of the place you want to add as a condition to this rule e.g Caltex, BP. Ensure you select ‘any’ and not all at top of bank rule screen
6. In the description enter in vehicle expenses and code to motor vehicle expenses and put 80% in the percent box
7. Next add a new line and enter vehicle expenses again but this time you will code to drawings and put 20% in the percent box.
8. Save this by clicking the save button at the bottom of the screen
9. You can keep adding to this bank rule as required so whenever these transactions are imported, Xero will do the split and code automatically for you.  All you need to do is hit ok.

For example, if a bedroom is set aside as an office for your business and the area of this room is 10% of the home, then this proportion of the expenses is a business expense. In this situation 10% of the home office expenses would be deductible for tax purposes.

1. Compile your home office expenses e.g Power, Telephone, Rates, Rent, Interest on mortgage etc.  Please note that the interest on your mortgage does not incur GST
2. Go to Expense Claims under the Accounts tab
3. Click add receipts and enter in the details of the expense you are claiming for
4. If you haven’t already got a code set up for ‘Home Office Expenses’ you can do this in the account section where it says ‘add account’ ensuring that you check the box ‘Show in Expense Claims’ at the bottom of this screen.
5. If you are claiming 20% for your home office then you will claim 20% of all home office expenses by entering in .20 in the Quantity amount and the full amount of the expense in the Unit Price
6. When finished click Save and Add another receipt until you have completed your Expense Claim
7. You can also use this expense claim option for any other business related expenses incurred that have not gone through any of your business accounts loaded in Xero e.g if they have come out of your personal account or if you have paid cash
8. Once you have completed your expense claim then select all receipts and submit them for approval
9. Next go to your ‘awaiting authorisation’ tab and review them once more and if you are happy, select all expenses and approve
10. Next scroll down to the bottom of the screen and enter in the due date and reporting date
11. Finally go to the ‘awaiting payment’ tab and enter in the applicable details e.g the amount the date you are reimbursing the funds and the code e.g funds introduced or other

1. Go to Manage Account on your dashboard and click Bank Rules
2. Go into existing bank rule that you want to add a condition to e.g Entertainment Rules
3. Enter in any new places you want to add under the Spend Money rule
4. In the 1^st column you will select ‘payee’ and in the 2^nd column select ‘contains’ and then in the 3^rd column type in the name of the place you want to add as a condition to this rule
5. Save this by clicking the save button at the bottom of the screen

With bank rules you define the conditions for each rule to match with your imported statement lines. After you import a bank statement and go to reconcile your account, your rules run. Check out the link below for a video that covers Bank Rules.

1. Go to Manage Account on your dashboard and click Bank Rules
2. Click on create rule and select Spend Money
3. In the 1^st column you will select ‘payee’ and in the 2^nd column select ‘contains’ and then in the 3^rd column type in the name of the place you want to add as a condition to this rule e.g Prego, Starbucks. Ensure you select ‘any’ and not ‘all’ at top of bank rule screen
4. In the description enter in client meeting and code to entertainment -deductible and put 50% in the percent box
5. Next add a new line and client meeting again but this time you will code to entertainment non-deductible and put 50% in the percent box.
6. Save this by clicking the save button at the bottom of the screen
7. You can keep adding to this bank rule as required so whenever these transactions are imported, Xero will do the split and code automatically for you.  All you need to do is hit ok.

But it is not fully deductible and needs to be split 50/50 between ‘entertainment’ and ‘entertainment non-deductible.’ By setting up an entertainment rule, this makes reconciling these transactions easy and fast.

1. Click ‘add details’ on the right of the screen next to the transaction you are wanting to reconcile
2. On the first line under Description type in what it was e.g Client Meeting
3. Under Quantity enter in .50 as we are splitting this transactions 50/50
4. Leave unit price as original full amount
5. Code the Account to ‘Entertainment’
6. Enter in the same details on the second line but this time you will code the Account to  Entertainment – Non deductible
7. Save transaction and then hit reconcile at bottom of the screen.