The beauty of Xero is it can be so simple to start. But the chart of account (all those income and expenses you can allocate to) are preconfigured, which means as business has changed…some changes should be made.
The general rule of thumb is if a particular type of expense is more than 10% of your whole expenses, it should have its own account.
So here are your 3.
Software -critical systems (Xero, G-Suite, all the things you NEED, domain names too) Software adds so much depth to a business, and understanding this separate to other costs is useful. This should be increasing as your time spent doing useless admin is decreasing.
Software - Useful systems (Canva, Planoly, Evernote - stuff that helps, but it’s replaceable) This account allows you to understand if you have on-going subscriptions that you need to prune. Pretty much guaranteed to save you money in the age of the SAAS trials and subscriptions.
Client expenses to be repaid This is critical to make sure if your business buys materials or subscriptions on behalf of your clients, they need to be repaid. Having a separate account helps you identify any missed expenses that are coming out of your pocket.