Mastering Zoho Books Accounting: Features, Setup & Best Practices

• Reading Time: 8 Minutes
• Published: March 5, 2025
• Last Updated: March 7, 2025

Zoho accounting services are gaining momentum globally, with over 37,939 sites using them to optimize financial operations. Among these, the UK boasts the second-largest user base, with 2,732 active users. This growing adoption highlights the increasing demand for smarter, more efficient financial management solutions. Rightfully so, the software offers a seamless way to streamline essential accounting tasks and get more things done. Its intuitive interface makes it easy for businesses to stay on top of their finances, ensuring smoother workflows and greater efficiency.

Zoho Books Accounting: An Overview

Zoho Books is a robust cloud-based accounting software designed for small and growing businesses. It leverages automation to streamline key financial tasks such as invoicing, expense tracking, and bank reconciliation.

Moreover, you get multi-currency support, making Zoho Books ideal for businesses catering to a global clientele. The software also efficiently integrates with other Zoho apps and third-party software, making it a versatile and reliable choice.

Key Zoho Books Features to Know About

Now that you know what is Zoho Books, let’s get into its features. The software offers you productivity, masked in accessibility to perform various accounting tasks from a single platform. The dynamic features offered by Zoho Books allow business owners to track expenses, time, and sales order, no matter where they are. Other Zoho Books features are discussed below.

1. Project Accounting

With the project accounting feature, you can easily add projects, assign tasks to members, set budgets and bill clients. Moreover, you get valuable insights on how to optimize your projects and optimize profitability.

2. Multi Currency Handling

Manage your business globally with a free mind using Zoho Books! One of the best features of Zoho accounting system is that it lets you control accounts even if the invoices are in multiple currencies. This way you can manage clients and vendors internationally, without sweating!

3. Expense Tracking

With Zoho Books, expense tracking becomes straightforward. Manage purchase orders, vendor credits, and send bills for approval seamlessly through this platform. By streamlining accounts payable, you will remain updated with the knowledge of how much money you owe to vendors.

4. Invoice Processing

Zoho Books allow you to track who owes you and how much each client or vendor needs to pay. One of the most popular Zoho Books features, invoice processing allows you to customize invoice templates, automate payments, and set payment reminders so no payment is delayed.

5. Bank Reconciliation

Streamline bank reconciliations with Zoho Books accounting! Zoho Books allow you to power through bank reconciliation as it automates this whole process, matches and categorizes transactions itself, and processes them even faster when transactions are piling up!

6. Inventory Management

Manage inventory efficiently using FIFO methodology and ensure stocks are replenished at all times. Zoho Books ensures you never run out of stock as it keeps a close eye on it, allows you to customize price lists, and always be up to date with complete product details.

7. Customizable Reports

With Zoho Books, you can have an insightful dashboard full of numbers and customizable reports that display relevant information. Furthermore, it calculates VAT returns, generates tax reports according to the country where the product is sold, and facilitates VAT filing to ensure compliance with tax regulations. You can view these reports from anywhere and make informed decisions.

How to Set Up Zoho Books for Accounting

Zoho Books is one of the best online accounting software to track transactions, customize financial reports, and generate invoices automatically. Now let’s configure how to set up a Zoho Books account for accurate and efficient accounting.

Step 1. Sign Up

Visit Zoho Books and sign up for a 14-day free trial during which you can test out all the premium features and get familiar with the interface.

Step 2. Company Details

Enter your company details, including the business name, address, and contact details. This is a crucial step as it is essential for accurate reporting.

Step 3. Chart of Accounts

Though Zoho Books does come with a default Chart of Accounts, you can still customize it to reflect your business’s needs. Add, edit, and delete accounts according to your income and expense requirements.

Step 4. Add Vendors & Customers

Now, add your customers and vendors. Finalizing this information will streamline invoices and bills creation later on.

Step 5. Add Services or Products

In the Item section, add all the services or products you sell. Don’t forget to include details such as descriptions, pricing, and other relevant tax information.

Step 6. Banking

Connect your bank account to Zoho Books to allow automatic transaction imports, which will streamline bank reconciliation.

Step 7. Reporting

Now you can explore the reporting feature, which offers a variety of reports with valuable insights into your business’s financial health.

Step 8. Explore & Customize

Begin exploring Zoho Books and customize the platform as you want. As you explore, enter the opening balances to ensure accurate financial records and gain confidence in leveraging this software to efficiently optimize and boost your financial health.

Step 9. Opening Balances:

Before fully transitioning to Zoho Books, enter your opening balances. This includes existing balances for bank accounts, outstanding customer invoices, unpaid bills, and other assets or liabilities.

Tracking Inventory Through Zoho Books

Efficient inventory management allows a business to thrive as financial losses are reduced, sales trends can be forecasted, and money is saved by not overspending on warehouse storage. Zoho inventory tracking system lets you track each item in the inventory by just following a few steps.

1. First, go to the Settings menu under the Items section.

2. Check the “Enable Inventory Tracking” box and select the date range to begin tracking from.

Now, to track a single item, follow these steps:

1. Go to the Items section.

2. Check the “Track Inventory” for this item box to add a new item or edit an existing one.

3. After enabling tracking, provide additional details of the product, choose an account from COA, enter the stock level for reordering notification, and enter the opening stock rate per unit for accurate cost accounting.

4. Click Save to complete the item creation. Now, Zoho Books will keep you automatically updated with the inventory levels whenever you are creating sales invoices and purchase bills.

That’s it! The steps to track a particular item in Zoho Books is as easy as pie. With proper inventory tracking, sales increase, all orders can be tracked from one platform, and stock never runs out with real-time tracking.

What are Zoho Books Reporting Features?

Zoho Books reports include comprehensive financial insights, customizable dashboards, and real-time data analysis. These features help businesses track performance, ensure compliance, and make informed decisions with ease. Let’s delve into the key Zoho Books reports and how they facilitate better decision-making.

1. Financial Statement Reports

Financial statement reports in Zoho Books provide a detailed overview of your business’s financial health. These reports include the Profit & Loss statement, the Balance Sheet, and the Cash Flow statement. Together, these reports help businesses assess financial stability, monitor profitability, and manage cash flow effectively.

2. Payables Reports

As accounts payable refer to the short-term debt you owe to your vendors, the Payables Report will display all the money owed. You can even customize this report according to your requirement. For instance, change the date range, group columns, and filter data based on requirement.

3. Tax Summary Reports

Zoho Books Tax Summary Reports provide you with a breakdown of taxes collected, paid, and due within a specific period. You get to track VAT and other applicable taxes, to ensure compliance with tax regulations. They also offer insights into taxable and non-taxable transactions, helping in the preparation of accurate tax filings and avoiding discrepancies.

4. Sales Report

The Sales Report in Zoho Books is basically a summary of all the invoices created for customers in your organization. You can very conveniently view this report in detail by clicking on any amount, as well as customize the report according to the data you like.

5. Inventory Reports

The Inventory Reports consists of a summary of items coming in and going out of the organisation including their quantities. With this report, you will be informed about which stock is at hand, and which is ready for sale; thereby ensuring proper inventory management.

How a Zoho Books Professional Adds Value to Your Financial Operations?

A Zoho Books professional adds value to your business’s financial operation in a multitude of ways. Think of them like your finance’s best friend. They can leverage complex Zoho Books features to their maximum potential using their years of knowledge, expertise, and by offering you personalised solutions.

1. Expert Guidance

When hiring a Zoho Books professional, choose one with years of experience and expertise in navigating through Zoho. These experts guide you with confidence and offer you well thought-out solutions so you can make data-driven decisions and boost business operations.

2. Tailored Solutions

No two businesses are alike nor are their issues; hence, you need someone who can provide you with personalised solutions. A Zoho Books professional who offers you tailored solutions according to your business is the one to hire.

3. Cost Efficient

Hiring a professional for just handling Zoho Books might seem like an additional cost, however, in the long run, they can assist you in saving prudently. Zoho experts offer you efficiency, optimize your workflow, and streamline business processes. All these tasks do reduce the operational costs at the end of the day.

Final Words

In conclusion, Zoho Books is an all-in-one, user-friendly, accounting software that simplifies financial management for businesses of all sizes. However, to access its variety of features, you need to choose a reliable partner. With Zoho Books accounting services, you can streamline operations, reduce errors, and improve the efficiency of your business.

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