Integrating with Xero Chart of Accounts
- Go to 'Payroll Settings' > 'Business Management' > 'Integrations'.
- Go to 'Xero' and click 'Add':
- Once you have selected 'Xero', Click the 'Connect to Xero' button:
You will then be transferred to the Xero login screen to choose an organisation and authorise the payroll system to have access to your Xero data. Once this step is complete, you will be redirected back to payroll to configure extra settings, as follows:
- Select the Xero business you'd like to connect to payroll
- If you want the payroll data exported as an AP invoice or a payroll journal
- If you want the payroll data posted in draft format
Then click on "Save".
Configuring your Chart of Accounts
Once you have configured your integration, the next step is to set up your chart of accounts. You can access the Chart of Accounts screen directly from the Journals screen. Simply click on the "SET UP A CHART OF ACCOUNTS" link. Alternatively, you can access the Chart of Accounts screen from your payroll dashboard by clicking on Payroll Settings > Chart if Accounts (listed under Business Settings).
Click on "Import Accounts", located on the top right hand side of the screen. A list of all your general ledger accounts from Xero will appear with the toggle defaulted to a 'hide' view. To import accounts relevant to payroll, click on the left of the toggle so that it switches from red to blue:
Once you've activated all the relevant accounts, scroll to the bottom of the screen and click on "Save Accounts List". You will then be redirected back to the Chart of Accounts screen. You will now be able to map your GL accounts against each payroll component. Further information on how to map the GL accounts can be found here.
N.B. If at any time you create new GL accounts in Xero and want to import into the payroll system, simply follow the instructions above.
Exporting Payroll Data to Xero
Once you have set up your chart of accounts, you will now be able to export the payroll data directly from within the pay run.
Once you have finalised the pay run, the toolbar will display the "Export to Xero" button. When you click on this your payroll data will be exported directly to Xero.
N.B. If you have posted your payroll data and then unlock the pay run and post again, the following will occur in Xero:
- If you are posting an AP invoice, the original invoice will be overridden by the more recent invoice;
- If you are posting a journal, the original journal will still remain in Xero. You will need to delete that journal manually in Xero.
Tax Codes and Expense Categories
Part of the integration with Xero includes importing the tax codes set up in Xero. Businesses can then assign the tax codes against expense categories thereby resulting in the tax rate:
- pre-populating against each expense category when an employee submits an expense claim; and
- being included in the payroll journal when exported to Xero.