Guide
Sending your records to Xero
Many people keep their day-to-day records in Tax App and also have a Xero organisation, because their accountant works in Xero. Connecting Xero copies your Tax App income and expenses into Xero, so neither set of records has to be re-entered in the other.
How it works
Money received becomes a sales invoice in Xero, and money spent becomes a bill. Each carries the date, the amount, the person or company involved, and the account it belongs to. Income and expense records travel in one direction only, from Tax App to Xero. Nothing entered in Xero becomes a record in Tax App.
Income arrives as paid invoices
Tax App records only money you have received. It has no idea of an invoice that has been sent and is waiting to be paid.
So an income record cannot arrive in Xero as an open invoice. If it did, Xero would show money as owed when it was already in your account. Your receivables would list debts that nobody owes. Instead, each income record arrives as a sales invoice with its payment already recorded. It is dated the day the money came in and posted against the bank account you chose.
Expenses arrive as bills, and are paid when you reconcile
A bill, unlike an income record, can still be unpaid. Each expense arrives in Xero with the due date from its invoice. So the amount Xero shows as owed is what you owe, and your aged payables are correct.
The bill is marked as paid when you reconcile the expense against your bank statement, and not before. Reconciling is when the money is known to have left the account. You do not need to do anything else. Once you reconcile in Tax App, the bill is marked as paid in Xero shortly afterwards.
Matching charts of accounts
Every organisation starts with the same chart of expense accounts as a new Xero organisation, with the same codes. For example, Advertising is 400 in both, and Repairs and Maintenance is 473. Tax App adds three accounts that landlords need and Xero does not have: Rates, Water, and Property Management.
So the two charts line up from the start. There is no need to match one list of accounts against the other. You can still change any account, and every account shows its code beside its name.
Separate bank accounts for rent and commission
You do not pick a single Xero bank account for everything. Instead, you choose the account each kind of money moves through: rent into one account, commission into another. You also choose the account each kind of expense is paid from. Every invoice and bill is then settled against the correct account.
Every record also carries a reference naming its line of business, so a single Xero organisation that holds both a rental and a practice can report on each separately.
What syncs in each direction
Income and expenses can be set to "Do not sync" or "Send to Xero". They are never brought back in, so nothing clashes with entries your accountant has made in Xero. Contacts and accounts have four options: "Do not sync", "Send to Xero", "Bring in from Xero", and "Both ways". Most people start by sending income and expenses and leave the other settings until later.
Contacts are matched by name. A contact missing on one side is created there, so the two address books stay the same.
Nothing is ever deleted or overwritten on either side. A record is never sent twice, however often the sync runs. When a record cannot be sent, the app names it and gives the reason. No record is dropped without telling you.
What it does not do
- It does not file returns. Filing is done in Xero, in myIR, or by your accountant.
- It does not send invoices to your customers. An invoice arrives in Xero already paid, as a record of money received.
- It does not touch payroll, fixed assets, or anything in Xero other than invoices, bills, contacts, and the chart of accounts.
- It does not delete or overwrite. A record that is wrong in both places must be corrected in both places.
Connecting and disconnecting
You approve the connection at Xero, so Tax App never sees your Xero password. Xero asks which of your organisations to share. It then gives Tax App a key that opens that organisation only. Disconnecting in Tax App removes the connection at this end. Taking back the permission in Xero does the same. Either way, nothing is removed from either set of books, and records stop being copied.
Xero is optional and off until you turn it on. It is one of the modules you choose when you set up your account. You can switch it on or off later without changing any records.
Where to go next
- Reconciliation: how reconciling marks your Xero bills as paid.
- Bank feeds: how transactions reach Tax App in the first place.