Understanding the Xero and Actionstep Integration

Modified on Thu, 31 Jul at 5:13 PM

In this article:



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 maters.


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

TransactionWorks with Xero Integration
Posting a client bill to your accountingYes: Processed in Actionstep, posted to Xero.
Paying a client billYes: Processed in Actionstep, posted to Xero.
Creating a credit noteYes: Processed in Actionstep, posted to Xero.
Applying a credit note to an invoiceYes: Processed in Actionstep, posted to Xero.
Refunding an outstanding credit note back to the clientNo: Not available with the Xero integration.
Refund an overpayment from a clientNo: Not available with the Xero integration.
General retainers (regionally specific)No: Not available with the Xero integration.

 

Trust Accounting

TransactionWorks with Xero Integration
Trust receipts, payments, journals, and transfersYes: Processed in Actionstep, posted to Xero.
InterestYes: Processed in Actionstep, posted to Xero.
Invoice paymentsYes: Processed in Actionstep, posted to Xero.
Statutory funds (regionally specific)Yes: Processed in Actionstep, posted to Xero.
Advanced funds transactions (regionally specific)Yes: Processed in Actionstep, posted to Xero.
Trust bank reconciliationsNo: Bank reconciliations for trust accounts should be completed in Actionstep and are NOT pushed through to Xero.


Supplier / Vendor Transactions

TransactionWorks with Xero Integration
Posting a supplier or vendor invoice to your accountingYes: Processed in Actionstep, posted to Xero.
Paying a supplier or vendor invoiceYes: Processed in Actionstep, posted to Xero.
Applying a supplier or vendor credit invoice to a supplier or vendor invoiceYes: Processed in Actionstep, posted to Xero.
Purchase ordersNo: These can be created in Actionstep but will not be posted to Xero.
Purchase credit ordersNo: These can be created in Actionstep but will not be posted to Xero.
Pre-entered supplier or vendor  No: These can be created in Actionstep but will not be posted to Xero.


Banking Transactions

TransactionWorks with Xero Integration
A bank deposit (when not linked to a client payment)No: These can be created in Actionstep but will not be posted to Xero.
A bank withdrawal (when not linked to a supplier payment)No: These can be created in Actionstep but will not be posted to Xero.
Bank to bank transferNo: These can be created in Actionstep but will not be posted to Xero.
Electronic batching of paymentsNo: These can be created in Actionstep but will not be posted to Xero.
Bank reconciliationsNo: Not available in Xero.
Printed checksNo: These can be created in Actionstep and the transaction will post to Xero depending on if it is for a supplier invoice or a bank withdrawal (see above), but the Check will be printed in Actionstep.
Deposit slipsNo: These can be created in Actionstep and the transaction in the deposit slip will post to Xero (depending on if it is for a supplier invoice or a bank withdrawal - see above), but the Deposit Slip will be printed in Actionstep.
Bank feedsPartial: While the bank feed will work in Xero, any transaction created through the bank feed will not be processed in Actionstep.


Other Accounting Functions

TransactionWorks with Xero Integration?
General journalsNo: These can be created in Actionstep but will not be posted to Xero.
Sales/VAT ReturnsNo: These can be created in Actionstep but will not be posted to Xero..
Divisions (Learn more)No: Actionstep's division function is not designed to work with a Xero integration.
Accounting reports based on matter or participantNo: You can still pull these reports in Actionstep, but the matter and participant types required will not be pushed through to Xero for you to run similar reports there.
Multi-currency accountingNo: Actionstep's multi-currency function is not designed to work with a Xero integration.




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.


Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select at least one of the reasons
CAPTCHA verification is required.

Feedback sent

We appreciate your effort and will try to fix the article