Bookkeeping client onboarding checklist: taking on a new client in Xero

Short answer: onboarding a bookkeeping client is five stages, in this order: decide and check (fit, anti-money laundering ID checks, an engagement letter with the scope and fee), get access (an Adviser user in the client’s Xero, the tax office’s agent authorisation, bank feeds, payroll), check the opening position (the last final accounts against Xero’s Balance Sheet on the same date, then a lock date), set the routine (what the client sends you, when, and the tax and payroll dates), and deliver the first month (a reconciled month and the first report the client sees). The step most often skipped is the opening balance check: in the worked example below it finds £19,600 of differences between a new client’s Xero and its final accounts, before a single new transaction is coded.

The checklist

#	Stage	Step	Done when
1	Decide and check	Fit call: business, volume, software, deadlines, why they are moving	You can price it and you want the work
2	Decide and check	Anti-money laundering checks on the client and its owners	ID verified, risk assessed, record kept
3	Decide and check	Engagement letter: scope, exclusions, fee, start date, who does what	Signed by the client
4	Decide and check	Handover from the previous bookkeeper or accountant (professional clearance in the UK)	Last accounts, last return, open queries received
5	Get access	An Adviser user in the client’s Xero, connected to your practice	You can log in, and the client sits in your client list
6	Get access	Agent authorisation with the tax office	You can see and file the client’s VAT, BAS or GST
7	Get access	Bank feeds, credit cards, loans and payment apps	Every account that moves money feeds into Xero
8	Get access	Payroll, receipt capture and other connected apps	You know what posts into Xero, and who owns each app
9	Opening position	Compare Xero’s Balance Sheet at the last year end with the final accounts	Every line agrees, or a journal fixes it (worked example below)
10	Opening position	Set the lock date at the last year end	Last year cannot change by accident
11	Opening position	Review the chart of accounts, tax rates, tracking categories and unreconciled items	A clean-up list with hours against it
12	Routine	The client’s monthly list: what they send, by when, and how	Written into the welcome email
13	Routine	A calendar of VAT, BAS or GST, payroll and year-end dates	In your practice manager or diary
14	Routine	How and when the client sees their figures	Report format and send date agreed
15	First month	Close the first month: reconciled, coded, reviewed	The month end checklist passes
16	First month	Send the first report and book a short review	The client has read their figures and asked their questions

Most practices get stages 1 and 2 done in the first week and stage 3 in the second; the clean-up in step 11 is what makes onboarding take a month instead of a week, so price it separately from the monthly fee (the bookkeeping pricing calculator works out the monthly fee and explains how to price a clean-up).

Stage 1: decide and check

Fit call. Ask what the business does, roughly how many transactions a month go through the bank, how many staff are paid and how often, which returns are due and when the next one is, what software they use, and why they are leaving their current bookkeeper. The last answer tells you about scope (they wanted more), price (they wanted less) or a mess (the books are behind).

Anti-money laundering checks. In all three countries, anti-money laundering law now covers accountancy work, and for the services it covers you have to identify and verify a new client before acting for them:

• UK: under the Money Laundering Regulations 2017 every bookkeeping and accountancy practice must be supervised (by a professional body such as AAT, ICB or ICAEW, or by HMRC) and carry out customer due diligence: verify the client, identify anyone who owns or controls more than 25% of a company, and assess the risk.
• Australia: accountants providing designated services came under the AML/CTF Act (the “tranche 2” reforms) from 1 July 2026, with enrolment with AUSTRAC due by 29 July 2026. Check with your professional body which of your services are designated.
• New Zealand: accountants have been reporting entities under the AML/CFT Act since 2018 for the services it lists.

Engagement letter. Professional bodies expect one, and it is your best defence against scope creep. It should say what you do (for example: bank reconciliation, coding, sales and purchase invoices, payroll for 8 staff, quarterly VAT returns, a monthly report), what you do not do (year-end accounts, tax returns, advice), the fee and when it changes, what the client must send and by when, and the start date. Make the start date a period end, such as the first day of a VAT quarter, so responsibility for each return is clear.

Handover. In the UK, ask the previous accountant for professional clearance: the client authorises them to talk to you, and you ask whether there is any professional reason you should not act, plus the information you need. Whatever the country, ask for the last final accounts with the trial balance, the last VAT, BAS or GST return, the payroll year-to-date figures, and any open queries with the tax office.

Stage 2: get access

Xero. The client invites you in Xero (Settings, Users) with the Adviser role and the “Manage users” permission, so you can post journals, run every report and set lock dates. If your practice uses Xero HQ (part of Xero Partner Hub), leave “Connect to practice” switched on when you accept the invitation, and add it to the client’s record, so it appears in your client list. If the client is new to Xero, a practice can set the organisation up on its own partner subscription instead; agree in the engagement letter who pays for Xero.

The tax office.

• UK: sign in to your HMRC agent services account, choose “Ask a client to authorise you”, and send the client the link it gives you. For VAT, the client must already be signed up for Making Tax Digital.
• Australia: the client nominates you in Online services for business with your registered agent number (client-to-agent linking). You cannot do it for them, and you cannot add them to your client list until they have.
• New Zealand: link the client to your tax agent client list in myIR, so you can see and file their GST.

Feeds and apps. List every account that moves money: business bank accounts, credit cards, loans, PayPal or Stripe, a card terminal. Each needs a bank feed or a regular statement import. Then list every app that posts into Xero (payroll, receipt capture, an online shop) and agree who owns the login. A missing feed is the commonest reason a month will not reconcile; the bank reconciliation report guide shows how to prove each account.

Stage 3: check the opening position (worked example)

These figures are made up. Ridgeway Physio Ltd, a UK clinic with a 31 March year end, moves to a new bookkeeper in May 2026. The previous accountant’s handover includes the final accounts to 31 March 2026. The bookkeeper runs Xero’s Balance Sheet at 31 March 2026 and puts it next to them. Amounts are in pounds; brackets are amounts owed.

Line	Final accounts £	Xero at 31 March £	Difference £	Why
Bank	18,420	18,420	0	Reconciled
Trade debtors	9,350	11,150	1,800	A bad debt written off in the accounts but not in Xero
Fixed assets	24,000	31,500	7,500	The year’s depreciation was never entered in Xero
Trade creditors	(4,200)	(3,700)	500	The accountant accrued a bill that Xero does not have
VAT	(5,610)	(5,610)	0	Matches the last return
Corporation tax	(9,800)	0	9,800	The tax journal was never entered in Xero
Net assets	32,160	51,760	19,600

The bank and VAT agree, so the transactions are fine. The £19,600 gap is four year-end adjustments that the previous accountant made in their own software and nobody entered in Xero. Left alone, Xero shows retained earnings £19,600 too high, the director’s dividend decisions start from a profit that was never there (see how to pay dividends), and next year’s accounts will not agree with last year’s.

The fix is one manual journal dated 31 March 2026 that enters the accountant’s adjustments line by line (bad debt, depreciation, the accrued cost and corporation tax), after which Xero’s Balance Sheet equals the final accounts. Then set the lock date at 31 March 2026. The trial balance is the fastest way to compare every line, and the year end checklist explains each adjustment and the two lock dates. If the differences are older or untraceable, the suspense account and Historical Adjustment guides cover where they tend to end up.

While you are in the file, list the clean-up: unreconciled bank lines, old unpaid invoices and bills, a director’s loan account that does not match what the director thinks they owe, unused accounts in the chart, wrong tax rates on regular suppliers. Each gets an hours estimate, and the total goes to the client as a one-off clean-up fee or a reason to start later.

Stage 4: set the routine

Write down the monthly routine in the welcome email, so the client knows their part on day one:

• What they send, and by when: receipts through the capture app as they happen, sales invoices raised in Xero, answers to your queries within five working days, payroll changes by a fixed day before each pay run.
• The dates that matter: each VAT, BAS or GST return and payment (VAT return, BAS, NZ GST return), payroll dates, the year end and the accounts deadline.
• What they get back, and when: for example, a reconciled month and a short management pack by the 10th. The monthly management pack guide covers what to put in it, and how to send Xero reports to clients compares the ways to deliver it.

Stage 5: the first month

Close the first full month properly: every account reconciled, nothing in suspense, drafts cleared. Then send the first report and book fifteen minutes to walk the client through it. It is the first thing they see of your work, and most of their questions (why profit differs from the bank balance, who owes them money) come up once and then stop.

The client onboarding questionnaire

Send these questions before the fit call or with the engagement letter:

1. Legal name, company number (or ABN or NZBN), registered address, directors and owners (with their share of the business).
2. What the business sells, to whom, and how customers pay (invoice, card, cash, online).
3. Every bank account, credit card, loan and payment app, and who holds the login.
4. VAT, GST or BAS: registered or not, the basis (cash or accrual, standard or flat rate), and the period.
5. Staff: how many, how often they are paid, and who runs payroll now.
6. The year end, the last accounts filed, and the name of the current or previous accountant.
7. Software and apps in use today, and who pays for Xero.
8. Anything behind: unfiled returns, unreconciled months, tax office letters.
9. What the owner wants from you that they do not get today (often: knowing how the business is doing without asking).

Common mistakes

• Starting work before the ID checks and the signed engagement letter, then finding out the scope or the client is not what you thought.
• Taking Xero’s opening balances on trust, so the year-end adjustments that were never entered stay wrong for another year.
• Starting mid-quarter without agreeing who files the current return, so a VAT, BAS or GST return falls between two bookkeepers.
• Not setting a lock date, so your clean-up changes a year that has already been filed.
• Leaving the client’s own part unwritten, so receipts and answers arrive whenever they arrive and month end slips.
• Not pricing the clean-up, so the first two months of a fixed monthly fee pay for work you did not quote.

Common questions

What is client onboarding in bookkeeping? It is everything between a business saying yes and the first month you deliver: checking who they are, agreeing the scope and fee in an engagement letter, getting access to their Xero and the tax office, checking the books you inherit, and agreeing the monthly routine.

What should be in a bookkeeping client onboarding checklist? Fit, anti-money laundering checks, engagement letter, handover from the previous accountant, Xero access, tax agent authorisation, bank feeds and apps, the opening balance check against the last final accounts, a lock date, a clean-up list, the client’s monthly routine, the tax and payroll calendar, and the first reconciled month and report.

How long does it take to onboard a new bookkeeping client? For a tidy file, one to two weeks: the checks, letter and access take a few days, and the tax office authorisation can take longer if the client has to act. A file that is behind can take a month or more, which is why the clean-up is priced and scheduled separately.

What role should a bookkeeper have in a client’s Xero? The Adviser role. It is the only role that can set lock dates and gives access to every report and journal. Add the “Manage users” permission if you will invite your own staff.

Do bookkeepers need to do anti-money laundering checks? Yes, in the UK (every bookkeeping practice must be supervised for anti-money laundering and verify its clients), in Australia for accountants’ designated services from 1 July 2026, and in New Zealand for accountants under the AML/CFT Act. Your professional body’s guidance sets out what to record.

What should a bookkeeping engagement letter include? The services in scope, what is excluded, the fee and how it changes when volumes change, what the client must provide and by when, the start date, who is responsible for each return, how either side ends the engagement, and data protection.

What questions should I ask a new bookkeeping client? Their legal details and owners, how customers pay, every bank and payment account, VAT or GST or BAS registration and period, staff and payroll, the year end and previous accountant, apps in use, anything behind or overdue, and what they want from you that they do not get today.

After onboarding: the Monday email under your name

ReportPilot does not do the onboarding steps above. Once a client is set up, it connects to their Xero with read-only access and sends them a plain-English email every Monday with their key figures (sales and profit against last month, cash, who owes them and what is overdue, bills due soon) under your practice’s name, plus scheduled report packs. The Bookkeeper plan covers 15 organisations for US$49 a month, after a 14-day free trial with no card (pricing). You can see a sample email first.