Xero is not perfect (yet). For example, It cannot combine accounts in the Chart of Accounts. That made me post this to the Xero Community site:
Xero - Combine Accounts in the Chart of Accounts:
It is astonishing that we do not have a very basic QuickBooks function: the ability to combine accounts in the Chart of Accounts. You often must combine accounts. We all often need this when clients create new accounts because they do not know they should use an existing account for a transaction. Why should we have to remove and re-reconcile MANY transactions when we do this?
A well-informed Xero employee responded this way:
To reclassify the expenses to the correct account you can use a journal entry. This way the history of the activity (an audit trail) stays with the transaction. I would suggest making the correcting journals for each month of activity, so the monthly reporting is accurate. We understand this is not ideal or the most efficient process, so the combining of accounts feature has been discussed and is something we are looking into, as long as an audit trail can stay in place.
I would be interested to know if this is happening across all transactions or only invoicing transactions in Xero? Perhaps others in the community can shine some light on a process they have in place to help clients with coding.
A user added:
It has not been a major problem for us. Where it has happened, I usually edit the transaction if it is a one off (after all, it's pretty certain that I'm looking at it to find the error) and email the client to explain where things should be posted.
Combining and archiving accounts in the same way as contacts would be useful
As an aside, I don't find it "astonshing" that Xero doesn't have every feature of Quickbooks, Sage, MYOB. It would be vast if it included every feature of every program. It is what it is, and is improving all the time.
Thank you both for agreeing that Combining Accounts, in the Chart of Accounts, would be useful in Xero. I do not want to combine accounts for any one type of entry, but for all types. I, of course, know that you can reclassify expenses to the right account, one entry at a time, and notify clients. I also, of course, know you can then delete or archive accounts. However, why do this one entry at a time, when combining lets you do both steps at once, very quickly, for one or dozens of entries?
I do not find it astonishing that Xero has or omits many QuickBooks features. I only find it astonishing when Xero omits something that seems so basic and frequently needed, especially since Xero has this for contacts. I also understand why many might like combining accounts with an audit trail, which QuickBooks does not have for such combinations. However, I would very much want an option to control if there will be Xero audit trail for such combinations or reclassifications.