When managing your transactions in Xero (or any accounting software), it's important to understand whether to void or delete a transaction. The right choice can help you maintain accurate records and avoid potential issues down the line.

Here's a breakdown:
  1. Void a Transaction:
    • Use this when you've made a mistake but want to keep a record of the transaction in your system.
    • Voiding keeps the transaction visible but resets its value, which ensures your financial reports stay balanced.
    • Voiding maintains an accurate audit trail, which is crucial for taxes or if you ever need to review past activity. It also helps prevent discrepancies in your accounting.
  2. Delete a Transaction:
    • Deleting should be done when the transaction is completely incorrect or unnecessary (like entering a duplicate).
    • Deleting a transaction removes it from your records entirely, which could affect your financial reports and balances if done incorrectly.
    • If you delete a transaction that should have been voided, you might lose valuable historical data, which can affect future financial decisions or tax filings.

Examples:
  • If you manually entered a bank transaction and the bank feed imported the same one, you can delete the duplicate to ensure you don't count it twice in your records
  • If you mistakenly enter a duplicate payment for a bill, you can delete the duplicate payment to avoid counting it twice in your reports.
  • If you issue an invoice to a client but later realize you made a mistake on the pricing, you can void the invoice to remove the wrong amount, since in Xero it's not possible to delete invoices once approved

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