Xero Chart of Accounts

Xero Chart of Accounts

Overview

The chart of accounts (COA) in Xero defines the general ledger structure for your organization. Every invoice line item, payment, and bank transaction references an account code. For MSPs, a well-structured COA enables tracking revenue by service line (managed services, projects, hardware sales), expenses by vendor category, and provides the foundation for meaningful financial reporting.

Core Concepts

Account Classes

Xero organizes accounts into five standard accounting classes:

Class	Description	MSP Examples
ASSET	Things you own	Bank accounts, accounts receivable, equipment
EQUITY	Owner's stake	Retained earnings, owner's equity
EXPENSE	Costs of business	Software licenses, salaries, ISP costs
LIABILITY	Things you owe	Accounts payable, loans, tax liabilities
REVENUE	Income earned	Managed services, project revenue, hardware sales

Account Types

Each class contains specific account types:

Class	Type	Code	Description
ASSET	BANK	BANK	Bank accounts (used for payments)
ASSET	CURRENT	CURRENT	Current assets (AR, inventory)
ASSET	FIXED	FIXED	Fixed assets (equipment)
ASSET	PREPAYMENT	PREPAYMENT	Prepaid expenses
EQUITY	EQUITY	EQUITY	Equity accounts
EXPENSE	EXPENSE	EXPENSE	Operating expenses
EXPENSE	DIRECTCOSTS	DIRECTCOSTS	Cost of goods sold
EXPENSE	OVERHEADS	OVERHEADS	Overhead expenses
LIABILITY	CURRLIAB	CURRLIAB	Current liabilities
LIABILITY	LIABILITY	LIABILITY	Long-term liabilities
LIABILITY	TERMLIAB	TERMLIAB	Term liabilities
REVENUE	REVENUE	REVENUE	Revenue accounts
REVENUE	OTHERINCOME	OTHERINCOME	Other income
REVENUE	SALES	SALES	Sales revenue

MSP Chart of Accounts Structure

A typical MSP chart of accounts includes:

Revenue (200-299)
  200 - Managed Services Revenue
  210 - Project Revenue
  220 - Hardware Sales
  230 - Software License Revenue
  240 - Cloud Services Revenue
  250 - Consulting Revenue

Cost of Sales (400-499)
  400 - Software License Costs
  410 - Hardware Costs
  420 - Cloud Platform Costs (Azure, AWS)
  430 - ISP/Connectivity Costs
  440 - Subcontractor Costs

Expenses (500-699)
  500 - Salaries & Wages
  510 - Employee Benefits
  520 - Office Rent
  530 - Insurance
  540 - Marketing
  550 - Professional Development
  560 - Tools & Subscriptions

Field Reference

Core Fields

Field	Type	Required	Description
AccountID	string (UUID)	System	Auto-generated unique identifier
Code	string	Yes	Account code (e.g., "200", "400")
Name	string	Yes	Account name
Type	string	Yes	Account type (REVENUE, EXPENSE, BANK, etc.)
Status	string	No	ACTIVE or ARCHIVED
Description	string	No	Account description
TaxType	string	No	Default tax type for this account
EnablePaymentsToAccount	boolean	No	Whether payments can be made to this account
ShowInExpenseClaims	boolean	No	Show in expense claims
Class	string	Read-only	Account class (ASSET, LIABILITY, EQUITY, REVENUE, EXPENSE)
BankAccountNumber	string	No	Bank account number (BANK type only)
BankAccountType	string	No	BANK or CREDITCARD (BANK type only)
CurrencyCode	string	No	Currency for bank accounts
ReportingCode	string	No	Reporting code for financial statements
ReportingCodeName	string	Read-only	Reporting code name

System Accounts (Read-Only)

Field	Type	Description
SystemAccount	string	System account type (e.g., DEBTORS, CREDITORS)

Xero creates these system accounts automatically:

System Account	Description
DEBTORS	Accounts Receivable
CREDITORS	Accounts Payable
GST	Tax collected/paid
GSTONIMPORTS	Tax on imports
HISTORICAL	Historical adjustment
REALISEDCURRENCYGAIN	Realized currency gains
UNREALISEDCURRENCYGAIN	Unrealized currency gains
ROUNDING	Rounding adjustments

API Patterns

List All Accounts

curl -s -X GET "https://api.xero.com/api.xro/2.0/Accounts" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}" \
  -H "Accept: application/json"

With Filters:

# Revenue accounts only
curl -s -X GET "https://api.xero.com/api.xro/2.0/Accounts?where=Class==%22REVENUE%22" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}" \
  -H "Accept: application/json"

# Bank accounts only
curl -s -X GET "https://api.xero.com/api.xro/2.0/Accounts?where=Type==%22BANK%22" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}" \
  -H "Accept: application/json"

# Active accounts only
curl -s -X GET "https://api.xero.com/api.xro/2.0/Accounts?where=Status==%22ACTIVE%22" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}" \
  -H "Accept: application/json"

# Expense accounts
curl -s -X GET "https://api.xero.com/api.xro/2.0/Accounts?where=Class==%22EXPENSE%22" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}" \
  -H "Accept: application/json"

Get Single Account

curl -s -X GET "https://api.xero.com/api.xro/2.0/Accounts/${ACCOUNT_ID}" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}" \
  -H "Accept: application/json"

Create Account

curl -s -X POST "https://api.xero.com/api.xro/2.0/Accounts" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}" \
  -H "Content-Type: application/json" \
  -d '{
    "Code": "245",
    "Name": "Cloud Services Revenue",
    "Type": "REVENUE",
    "Description": "Revenue from cloud hosting and Azure/AWS resale",
    "TaxType": "OUTPUT"
  }'

Update Account

curl -s -X POST "https://api.xero.com/api.xro/2.0/Accounts/${ACCOUNT_ID}" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}" \
  -H "Content-Type: application/json" \
  -d '{
    "AccountID": "'${ACCOUNT_ID}'",
    "Name": "Cloud & Hosting Revenue",
    "Description": "Revenue from cloud hosting, Azure, AWS, and SaaS resale"
  }'

Archive Account

curl -s -X POST "https://api.xero.com/api.xro/2.0/Accounts/${ACCOUNT_ID}" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}" \
  -H "Content-Type: application/json" \
  -d '{
    "AccountID": "'${ACCOUNT_ID}'",
    "Status": "ARCHIVED"
  }'

Delete Account

curl -s -X DELETE "https://api.xero.com/api.xro/2.0/Accounts/${ACCOUNT_ID}" \
  -H "Authorization: Bearer ${ACCESS_TOKEN}" \
  -H "xero-tenant-id: ${XERO_TENANT_ID}"

Note: Accounts with transactions cannot be deleted. Archive them instead.

Common Workflows

Set Up MSP Revenue Accounts

async function setupMspRevenueAccounts() {
  const accounts = [
    { Code: '200', Name: 'Managed Services Revenue', Type: 'REVENUE', Description: 'Monthly recurring managed services contracts' },
    { Code: '210', Name: 'Project Revenue', Type: 'REVENUE', Description: 'One-time project and implementation work' },
    { Code: '220', Name: 'Hardware Sales', Type: 'REVENUE', Description: 'Hardware sales and procurement markup' },
    { Code: '230', Name: 'Software License Revenue', Type: 'REVENUE', Description: 'Software license resale (M365, security, etc.)' },
    { Code: '240', Name: 'Cloud Services Revenue', Type: 'REVENUE', Description: 'Cloud hosting and IaaS/PaaS resale' },
    { Code: '250', Name: 'Consulting Revenue', Type: 'REVENUE', Description: 'Ad-hoc consulting and advisory services' }
  ];

  const results = [];
  for (const account of accounts) {
    try {
      const result = await createAccount(account);
      results.push({ code: account.Code, status: 'created' });
    } catch (error) {
      results.push({ code: account.Code, status: 'error', message: error.message });
    }
  }

  return results;
}

Validate Account Codes for Invoice

async function validateAccountCodes(lineItems) {
  const accounts = await fetchAllAccounts();
  const accountCodes = new Set(accounts.map(a => a.Code));
  const revenueAccounts = new Set(
    accounts.filter(a => a.Class === 'REVENUE').map(a => a.Code)
  );

  const issues = [];

  for (const item of lineItems) {
    if (!accountCodes.has(item.AccountCode)) {
      issues.push(`Account code '${item.AccountCode}' does not exist`);
    } else if (!revenueAccounts.has(item.AccountCode)) {
      issues.push(`Account code '${item.AccountCode}' is not a revenue account`);
    }
  }

  return { valid: issues.length === 0, issues };
}

Revenue Breakdown by Account

async function getRevenueBreakdown(startDate, endDate) {
  const accounts = await fetchAllAccounts();
  const revenueAccounts = accounts.filter(a => a.Class === 'REVENUE');

  const invoices = await fetchAllInvoices({
    where: `Type=="ACCREC"&&Status!="VOIDED"&&Status!="DELETED"&&Date>=DateTime(${startDate})&&Date<=DateTime(${endDate})`
  });

  const breakdown = {};

  for (const account of revenueAccounts) {
    breakdown[account.Code] = {
      name: account.Name,
      total: 0,
      invoiceCount: 0
    };
  }

  for (const invoice of invoices) {
    for (const line of invoice.LineItems || []) {
      if (breakdown[line.AccountCode]) {
        breakdown[line.AccountCode].total += line.LineAmount || 0;
        breakdown[line.AccountCode].invoiceCount++;
      }
    }
  }

  return breakdown;
}

Find Bank Accounts for Payments

async function getBankAccounts() {
  const accounts = await fetchAllAccounts();
  return accounts
    .filter(a => a.Type === 'BANK' && a.Status === 'ACTIVE')
    .map(a => ({
      accountId: a.AccountID,
      code: a.Code,
      name: a.Name,
      bankAccountNumber: a.BankAccountNumber,
      currencyCode: a.CurrencyCode
    }));
}

Error Handling

Common API Errors

Code	Message	Resolution
400	Account code already exists	Use a different code
400	Account code is required	Provide Code field
400	Account name is required	Provide Name field
400	Invalid account type	Use valid Type value
400	Cannot delete account with transactions	Archive instead
400	System accounts cannot be modified	These are Xero-managed
401	Unauthorized	Refresh access token

Validation Errors

Error	Cause	Fix
Code already exists	Duplicate account code	Choose unique code
Code is required	Missing Code field	Add Code to request
Invalid type	Wrong Type value	Use valid account type
Cannot delete	Account has transactions	Archive account instead
System account	Modifying system account	System accounts are read-only

Error Recovery Pattern

async function safeCreateAccount(data) {
  try {
    return await createAccount(data);
  } catch (error) {
    if (error.message?.includes('already exists')) {
      // Account exists - find and return it
      const accounts = await fetchAllAccounts();
      return accounts.find(a => a.Code === data.Code);
    }

    throw error;
  }
}

Endpoint Reference

Endpoint	Method	Description
/Accounts	GET	List all accounts (not paginated)
/Accounts	POST	Create an account
/Accounts/{AccountID}	GET	Get single account
/Accounts/{AccountID}	POST	Update an account
/Accounts/{AccountID}	DELETE	Delete an account
/Accounts/{AccountID}/Attachments	GET	List account attachments

Best Practices

1. Use consistent code ranges - Revenue 200-299, COGS 400-499, Expenses 500-699
2. Name accounts descriptively - "Managed Services Revenue" not just "Revenue"
3. Add descriptions - Include what transactions belong in each account
4. Set default tax types - Reduces errors when creating invoices
5. Archive, don't delete - Preserve historical data for accounts with transactions
6. Separate revenue streams - Track managed services, projects, and hardware separately
7. Map to PSA categories - Align account codes with PSA service categories
8. Review quarterly - Clean up unused accounts and verify mappings
9. Document your COA - Maintain a reference guide for account code usage
10. Use DIRECTCOSTS for COGS - Separate direct vendor costs from overhead expenses

Related Skills

• Xero Invoices - Account codes for invoice line items
• Xero Payments - Bank accounts for payments
• Xero Reports - P&L and Balance Sheet use accounts
• Xero API Patterns - API reference