What is the first step in adding a new inventory item in Xero?

The first step in adding a new inventory item in Xero is to navigate to the Products and services section under the Business menu. This area is specifically designed for managing inventory items, allowing users to add, edit, and organize their products and services efficiently. By selecting Products and services, you access the relevant functionalities necessary for entering new inventory details such as item names, descriptions, prices, and other essential attributes.

Navigating through the Dashboard and selecting Accounting, while important for general accounting tasks, does not directly lead to inventory management. Clicking on Finance and selecting Reports is primarily aimed at financial reporting and analysis, and creating an account in Xero is a prerequisite step for using the software, rather than a step involved in adding inventory items. Therefore, accessing the Products and services section is the correct and logical first step in the process of adding new inventory items.