Understanding the Xero and Actionstep Integration

In this article:

• How Xero Integrates with Actionstep's Native Accounting
• Before You Integrate with Xero
• Supported Transactions 
• Limitations of the Integration

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

Actionstep includes full-featured billing, trust accounting, and general business accounting modules. An organization may wish to adopt these features of Actionstep without being forced to change their accounting system in the process. Implementing an integration with Xero can help with this. 

How Xero Integrates with Actionstep's Native Accounting

When you are using Actionstep's native accounting, you have a built-in general ledger in your Actionstep system. You can use this for all your accounting needs, but some users prefer to use Xero because it's what they're used to, what their accountant supports, or for other reasons. 

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

Before You Integrate with Xero

Before you integrate, make sure you understand how the integration works.

Integration is One-Directional

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. This means the integration works only one way—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. However, 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. 

Not All Transactions are Supported

Not all accounting transactions you enter in Actionstep will be pushed through to Xero. 

For example, the following accounting transactions are pushed through to Xero:

• Sales and purchase information such as the bills you send to clients, supplier/vendor invoices and credit notes
• Payments to those sales and purchase transactions such as payments to your client bills or supplier/vendor invoices
• Bank to bank transfers
• All trust transactions

However, the following accounting transactions are NOT pushed through to Xero:

• Bank deposit or withdrawals (These are not payments to invoices but one-off deposits or withdrawals.)
• General journal entries

Additionally, general retainers are not currently supported with Xero. If you have general retainers configured, you will need to unconfigure them. To do this, remove any retainer balances from your matters.

For a complete list of what's supported, see Supported Transactions, below.

Locking Transactions

Once you are integrated with Xero, Actionstep will mark each transaction as locked. This is done so an Actionstep user does not make changes to the transactions in Actionstep and are not yet reflected in Xero. However, you can unlock transactions if you need to edit them. See Xero Configuration - Correcting Accounting Errors for more information.

Pre-Integration Transactions

Transactions will only pass through to Xero after you integrate the systems. Additionally, 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. Saving them again pushes 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.

Working with Divisions

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.

Supported Transactions 

Information in the following table outlines what can/cannot be done using the Xero Integration with the Actionstep Practice Pro + Accounting option:

Client Billing

Trust Accounting

Supplier / Vendor Transactions

Banking Transactions

Other Accounting Functions

Limitations of the Integration

Before implementing the Actionstep / Xero integration, please be mindful of some of the limitations:

• The Actionstep / Xero integration cannot be used on a database utilizing multiple currencies.
• Any Actionstep database utilizing this integration should be set to the Accrual Accounting method. This will allow for invoices to be transferred to Xero prior to payment. Accounting method settings in Xero will determine the accounting method used for reporting.
• It is not recommended that you use Xero's automatic bank feed if you are intending to process invoice payments in Actionstep.
• Transactions sent from Actionstep to Xero will post the sum of the line items attributed to each general ledger account in the transaction. This means that though all of the transaction information will match, the layout of the invoice may vary slightly.
• Do not connect a Xero trial account to an Actionstep system that will later need to use a live Xero account. If a trial account is connected and later becomes invalid, a new Actionstep system will need to be created and a new Xero account connected.
• When a Xero account is connected to Actionstep, accounts are allocated to specific accounting and billing functions. The first connected Xero account will write these accounts to Actionstep. Replacing the Xero account will not overwrite the accounts, creating a discrepancy between Xero and the available accounts in Actionstep.