Xero Configuration in Actionstep Practice Pro + Accounting

Created by Allison Cloyd, Modified on Mon, 14 Nov 2022 at 12:58 AM by Allison Cloyd

Overview

Actionstep offers an integration with Xero that will allow you to do your billing, trust/client accounting and general matter management in Actionstep and have all your accounting information automatically updated in Xero.

The integration works slightly differently for an Actionstep system set to our Practice Pro + Accounting plan than it does for those on a Practice Pro plan. In this article, we will explain why it works differently and how you can configure and control that integration. 

 

How Xero integrates with Actionstep Practice Pro + Accounting

When you are using Actionstep on a Practice Pro + Accounting plan, you will have a built-in General Ledger in your Actionstep system already. You can use this for all your accounting needs, but some users prefer to use Xero for various reasons such as, it is what they are used to, what their accountant supports, or for other reasons. 

When you integrate your Practice Pro + Accounting system with Xero, the transactions you enter will still be posted to Actionstep's general ledger, but the integration will create duplicates of those transactions to appear in your Xero account.

 

Important information you need to know about the Integration with Actionstep and Xero on Practice Pro + Accounting

Before you integrate, please make sure you read and understand the following on how the integration works.

 

The integration is one way only, from Actionstep to Xero. When you create an invoice in Actionstep it will create an invoice in Xero. When you create a payment in Actionstep for that invoice, it will create a payment in Xero against that invoice. If you create an invoice in Xero, it does NOT create an invoice in Actionstep. If you pay an invoice in Xero, even an invoice that was originally created in Actionstep, it does NOT create a payment in Actionstep. 

NOTE: The Actionstep integration with Xero is built to allow you to do your Billing and Trust/Client Accounting in Actionstep and have the Accounting information updated in Xero. 

 

Not all Accounting transactions you are used to entering into Actionstep will be pushed through to Xero. 

NOTE:

The following accounting transactions are pushed through to Xero:

  1. Sales and Purchase information such as the bills you send to clients, supplier/vendor invoices and credit notes.
  2. Payments to those Sales and Purchase transactions such as payments to your client bills or supplier/vendor invoices.
  3. Bank to bank transfers.
  4. All Trust transactions.

The following accounting transactions are NOT pushed through to Xero:

  1. Bank deposit or withdrawals. These are not payments to invoices but one off deposit or withdrawals.
  2. General Journal entries.

 

General Retainers are not currently supported with Xero. If you have General Retainers configured, you will have to unconfigure them. To be able to do this, you will need to remove any retainer balances from your maters. 

 

Once you are linked with Xero, Actionstep will mark each transaction as 'locked'. We do this so that an Actionstep user does not make changes to the transactions in Actionstep and not have Xero not reflect that change. There is a process where you can unlock transactions to be able to edit them though. Please refer to our article Xero Configuration - Correcting Accounting Errors for more details on how to do that.

 

Transactions will only flow through to Xero after you integrate the systems. Only new transactions will be pushed through. Any existing invoices, account balances or payments you have made in Actionstep, will not be created in Xero. Only new transactions created in Actionstep will be in Xero. Once you integrate, you may want to consider moving any open invoices back into draft and saving them again. By saving them again, you will push them through to Xero. Any partially paid invoices will either have to have the payments removed, moved back into draft, reposted and re-paid or you will have to ensure that you deal with those payments in Xero separately from Actionstep.

 

While Actionstep supports having multiple divisions for its built-in accounting, its integration with Xero does not support more than one division. You cannot link a different division to a different Xero Account. 

 

Integrating Actionstep Practice Pro + Accounting with Xero

There are two stages to integrating Actionstep Practice Pro + Accounting with Xero. The first is where you authorize Actionstep to be allowed to integrate with your Xero and the second is mapping items between the two systems.

The mapping process takes a bit longer but it is important. As both Actionstep and Xero have their own general ledger, currencies, and sales taxes, it is important to map the two together. By doing this, you ensure that a transaction in Actionstep coded to a certain general ledger account with a certain amount of tax is processed in Xero with the correct general ledger account and tax code.

 

Authorizing Actionstep with Xero

Authorizing is the process where you agree within Xero to allow Actionstep to post transactions to it. This is started from within Actionstep.

NOTE:

You will need Admin access for both Actionstep and Xero to do this. 

You will need Actionstep Admin access to get to the screen where the integration is triggered.

It is important that you have Admin access to Xero for this process. When you log into Xero (covered below) the permissions of the account you use will be the permissions that Actionstep has within Xero. If you log in with an account that can only post bills but not payments, then Actionstep will have a similar restriction. 

 

To authorize the integration, log into your Actionstep account and go to the Admin screen by clicking on the button in the top right of Actionstep.  From the Admin screen, choose Accounting. On the right-hand side of the screen choose Connect to Xero

Admin > Accounting > Connect to Xero.

Xero_Enterprise_-_Connect.gif

 

You will be redirected to the Xero log in page where you should enter your login details. You will be asked to authorize Actionstep, please do so. Actionstep may take a moment to update with details from Xero, then you will be redirected back to the Xero mapping screen in Actionstep.

 

Mapping Actionstep and Xero

During the mapping process, you will take accounts that are in Actionstep and map them to the equivalent account in Xero.

Go to Admin > Accounting > Xero Mapping.

The Mapping screen is made up of five parts. To the left are sections for Synchronization, GL account map GST/Sales Tax/VAT map and Currency map.

To the right of the screen, is the Xero GL Account Reference which lists all the General Ledger (GL) accounts from your Xero Account. As you map these accounts, they will be crossed on this list so that you can see what has been mapped and what is left to be mapped.

Now, we can explore the five sections.

 

Synchronization

In this section, you set what types of transactions you will want to post through to Xero and map the Xero account that should be used for offsetting bank-to-bank transfers.

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Field Description
Sales invoices

By switching this on, you are allowing the sales invoices (the bills you produce for your clients) to be pushed through to Xero.

As well as the invoices, any payments made to those invoices or credit notes for those invoices will be pushed through.

It is common for this to be on for all users who integrated with Xero.

Supplier invoices

By switching this on, you are allowing supplier/vendor invoices (bills sent to your company to pay to someone else) to be pushed through to Xero. 

As well as the invoices, any payments made to those invoices or credit notes for those invoices will be pushed through.

Not all users will enable this with their Xero integration, instead preferring to enter in their expenses directly into Xero.

However, if you want to enter supplier/vendor invoices into Actionstep to bill the expense onto a customer, you will need to switch this on.

Trust transactions

By switching this on, any trust/client account transactions that you create in Actionstep will push through to Xero. 

While you can allow your trust/client account transactions to be pushed through to Xero, it is important to note that you should not feel the need to complete trust/client account reconciliations or any other transactions within Xero. It is expected that your trust/client account compliance will be completed in Actionstep.

it is therefore uncommon for this to be on for all users who integrated with Xero.

Bank transfers account

This is used when transferring funds from one bank account to another, including transfers between a trust/client and business bank account.

As Actionstep and Xero handle the transfer of funds slightly differently, it is worthwhile to use this account.

 

GL account map

In this section, you will map the accounts in your General Ledger (GL) in Actionstep to equivalent accounts in Xero. 

To do this you will use the Add row button to create a new row and within that row, select an account in Actionstep in the left-hand drop-down and the equivalent account in Xero in the right-hand column.

 

GL_mapping.gif

As you map these items you will find that some are required and some are not. You can save yourself some time by not mapping every account but the important ones. 

For example, if you are not going to be syncing trust/client account transactions, you do not need to map your trust/client bank accounts. If you are going to be mapping your expenses, you do not have to map every expense account, just the ones that you are likely to use.

As a rule of thumb, map your

  • Bank accounts
  • Income accounts
  • Accounts receivables
NOTE: You can see a full list of recommended accounts and why you might want to consider mapping them here: Detailed Explanation of Xero Mapping for Practice Pro + Accounting

The Mapping screen is clever. If you try to save the mapping without a crucial account mapped, it will warn you of that, like in the screenshot below. 

screenshot-eu-west-1.actionstep.com-2019.10.07-17-29-00.png

 

GST/Sales Tax/VAT map

Similar to the section above, you use the Add row button to create a new row and within that row, select a tax code in Actionstep in the left-hand drop-down and the equivalent tax code in Xero in the right-hand column.

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NOTE: The following apply when mapping Input and Output Tax.

  • Input Tax refers to tax paid on your Purchases and should be mapped to GST/Sales Tax/VAT on Expenses.
  • Output Tax refers to tax on your Sales and should be mapped to GST/Sales Tax/VAT on Income.

 

Currency map

Here you will map your Actionstep currency to your Xero currency.

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Xero GL Account Reference

This lists all the General Ledger (GL) accounts from your Xero Account. As you map these accounts, they are crossed through on this list so that you can see what has been mapped and what is left to be mapped.

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