How to Add Departments in Xero
- George Apostolov
How to Add Departments in Xero: step-by-step guide
On Xero's main dashboard, head over to the top menu bar and click 'Accounting'.
Choose 'Advanced' from the list of options.
After that, find and tap 'Tracking Categories'.
Click 'Add Tracking Category' to proceed.
Come up with a unique department name, then type it into the 'Tracking Category Name' field.
Subsequently, provide several category options. Enter them into the provided input fields.
If you want to add more category options, simply tap 'Add Another Item'.
Once done, review your input and click 'Save'.
After completing these steps, the new department will be added to your Xero organization.
Quick answer: To add departments in Xero, navigate to Accounting, select Advanced, and open Tracking Categories. Click Add Tracking Category, enter a unique name, and provide category options. Add more items if needed, then review and save your changes to update your organization.
About this Xero tutorial
Set up new departments in Xero by configuring tracking categories and options. Save your inputs to update your organization. This guide shows how to add Departments in Xero in 9 steps, starting with "On Xero's main dashboard, head over to the top menu bar and click 'Accounting'" and finishing with "After completing these steps, the new department will be added to your Xero organization". The interactive demo above is a click-through copy of the real Xero interface, so you can rehearse each step before doing it in your own account.
Frequently asked questions
How many steps does it take to add Departments in Xero?
9 steps. Each one is listed in order above, and the demo highlights exactly where to click.
Can I try it without changing my own account?
Yes. Clicking through the demo doesn't touch your Xero data or settings. Once you know the flow, repeat it in your own workspace.
This tutorial is filed under Xero. Related guides: How to Add Invoices in Xero, How to Add Items in Xero and How to Add Notes to Financial Statements in Xero. Last reviewed 05 Oct 2026.
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