NEWER FEATURE
Reconcile period
The job it does: gives Xero something close to a formal period-verification step for banking.

Xero introduced reconcile period specifically to support month-end close. It lets you compare your bank transactions against your accounting records on a monthly basis and retain a report of the close-out for governance purposes — a documented statement that the period was verified, rather than an implicit assumption that it was.

Importantly, it doesn't replace the familiar real-time reconciliation workflow. If you're happy categorizing and matching transactions as they arrive, nothing changes; reconcile period is an optional layer on top. That's the right way to think about it: your day-to-day rec stays as it is, and this adds the monthly proof that the day-to-day rec was actually correct.

If you've been running the close discipline manually — pulling statements, agreeing balances, saving evidence somewhere — this formalizes it inside Xero and leaves an artifact behind.

ADVISOR ROLE REQUIRED
Lock dates — and there are two of them
The job it does: stops closed periods changing after you've reported on them.

This is the single most important close control in Xero, and the one most commonly left unset. Once a lock date is in place, users can't add, change or delete transactions dated on or before it. Setting and changing lock dates requires the advisor user role.

Xero gives you two separate lock dates, and understanding the distinction matters:

The reporting period lock date — locks the period for all users except advisors. This is the one you move forward each month as you close. Advisors retain the ability to make corrections, which is usually what you want during an open financial year.

The end of year lock date — locks for everyone including advisors. This is for periods that have been formally filed. Once a return has gone to the authorities, that period should stay locked permanently.

Users can still create draft invoices, bills and expense claims in a locked period and submit them for approval — the lock prevents posting, not preparation.

ADVISOR ROLE REQUIRED
Assurance dashboard
The job it does: surfaces the changes and anomalies that no report will show you.

Genuinely powerful and almost unknown outside accounting practices. The assurance dashboard monitors the integrity of your data and highlights items worth checking, organized into tabs by activity type.

User activity — every user with access, their role, last login, and a twelve-month heat map of their activity by day. Useful for spotting who is working in the file and when, including activity in periods that should have been finished.

Bank accounts — manual interventions in banking: statement lines that were manually deleted, and transactions that were manually marked as reconciled rather than genuinely matched. These are the two actions most likely to silently break a reconciliation.

Contacts — suppliers sharing duplicate bank account numbers, and bank details that have been edited recently. This is a direct payables fraud check, and it's sitting there unused in most files.

Backdated transactions — invoices and bills entered with a date earlier than when they were created, filterable by period. Exactly what you want to review before locking a month.

Running this before you lock is one of the highest-value five minutes in the whole close.

CORE
Repeating journals
The job it does: automates the adjustments you post every single month.

Depreciation, prepayment releases, recurring accruals and management charges are identical every month except for the date and the narration. Repeating journals generate them on a schedule so they stop depending on someone remembering.

They support placeholders in the narration and description fields, so the text updates with the period automatically — [Month] resolves to the journal's month, and you can offset it, so [Month-1] gives you the prior month. A journal generated in April described as [Month] to [Month+1] reads "April to May." Small feature, but it's the difference between journals that document themselves and a year of entries all narrated "monthly accrual."

Creating them requires the advisor role, or standard access with reports permission.

CORE
Draft and published reports
The job it does: preserves the numbers as they stood when you closed.

Because Xero's ledger stays live, a report run today reflects today's data — including any changes made since. Publishing a report keeps a fixed record of the accounts as at a given date, which is what makes it possible to demonstrate later what you actually reported.

The working pattern is: build a draft set of financials while you're posting adjustments, review and revise, then publish once the numbers are final. Published reports become your evidence, and the lock date stops the underlying data drifting away from them.

Publish at minimum the balance sheet, the profit and loss, and the account transactions or general ledger detail. Download copies as well — an artifact outside the system is worth having.

CORE
Fixed assets register
The job it does: calculates and posts depreciation so you don't have to.

Xero's fixed asset register holds each asset with its cost, method and useful life, and runs depreciation for the period. Register assets when you acquire them and the monthly posting becomes a single action.

Its absence is why so many small business balance sheets carry assets at original cost indefinitely, which overstates both assets and profit — usually discovered by an accountant at year end, who then posts twelve months of depreciation in one entry and makes December look inexplicably terrible.

CORE
Budget Manager and Budget Variance
The job it does: catches coding errors that reconciliation cannot.

Variance review is a control, not just a management exercise. When an expense line comes in at three times budget, the cause is as likely to be a miscode as a real overspend — and comparing against budget is how you find it. A month closed without any comparison to expectation has passed no test at all.

Set budgets in Budget Manager and review the Budget Variance report as a mandatory step before locking. If you have no budget, compare against prior month and prior year instead; the point is having an expectation to test against.

CORE
Tracking categories
The job it does: segments the ledger by department, location, project or fund.

Xero's dimension for reporting below the company level. Applied at the point of entry they make segmented close reporting straightforward. Applied afterwards they're a reconstruction exercise, which is why coding discipline through the month determines what your close can produce.

One constraint to plan around: Xero limits you to two tracking categories, and reports generally won't let you filter by more than one at a time. If your reporting needs cut across three dimensions, that's a design problem to solve before you need the report, not during close.

CORE
History and notes, and the activity log
The job it does: provides a tamper-proof record of who did what.

Every transaction carries its own history, and the organization keeps an activity log covering its full history from creation. The audit trail can't be edited or deleted by any user, including administrators — which is what makes it useful evidence rather than merely a convenience.

At close, the history and notes report answers the question that otherwise causes real friction: why does this month look different from when I last ran it? Full activity log access requires advisor-level permissions.