Connecting to Xero
Because Xero and Lightyear are both cloud-based, set-up and connectivity between the systems is seamless. Here's how.
From the Navigation Pane, head over to Settings > Accounting Software > select Xero > Connect.
You will be redirected to the Xero website and asked to log in to your account.
If your login to Xero accesses more than one Xero Company please be sure to connect to the correct Xero account. The screen you will see will look like this:
If you are trying to connect multiple Xero files, Xero will present the drop down above with a mention of files that are "already connected". Don't worry! This not in relation to your current connection (unless you have multiple Lightyear accounts connecting to a single Xero file
). Please proceed to select your current file to establish the connection between Xero and Lightyear.
Lightyear will automatically sync the following data back from Xero which are required to process your payables bills:
- Supplier Cards
- GL Codes
- Tax Rates
- Tracking Categories (if setting is switched on and set up in Xero)
The name of the Xero company will be displayed Once the connection is established to inform you which account is connected. The connection will remain active even when you log out and back into both systems and any user with Export permissions within Lightyear will be able to export bills to Xero.
Syncing of your Lightyear and Xero account is now complete and you will be connected.
If you do nothing else in this section, please ensure you skip ahead to set your default tax rates before you move on. Trust us, it will make your life SO much easier moving forward.
Customize your Xero settings by selecting Software Settings. In this section, you can:
- Export a bills as Awaiting Payment or Awaiting Approval
- Turn on or off the functionality of using tracking categories
- Turn on or off the ability to send attachment to Xero
- Turn on or off the ability to automatically apply categories on line item level
- Turn on or off the ability to send quantity and unit price to Xero for line item invoices/credit notes
- Turn on or off the ability to send product codes
Export Bill as
- Awaiting Payment - As invoices are already approved with a full audit trail in Lightyear, you can choose for your bills to be exported directly to "Awaiting Payment" in Xero
- Awaiting Approval - Some may require an additional approval after exporting, thus the option is available to export to "Awaiting Approval" into Xero
Activate Tracking Categories
- For those using categories in Xero, you can select Yes for this option to allow us to code within Lightyear and export the details to Xero as coded. Save time by coding it in Lightyear, and we'll remember the next time we extract the line item what your preferred category settings are too!
- If you do not require categories, you can simply select No.
Send attachments to Xero
- Yes - this will send a copy of the document upon export which can be found as an attachment to the bill in Xero
- No - this will only send your bill data to Xero and not send a copy of the document across to Xero upon export
Automatically apply categories on line item
- Yes - save time by coding it in Lightyear, and we'll remember the next time we extract the line item what you last coded the supplier lines.
- No - keeps these blank and code them individually
Automatically apply GL Codes on a line item level?
Yes - Save time by coding it in Lightyear, and we’ll remember the next time we extract the line item what you’ve coded the supplier lines to.
No - keeps these blank for you to code individually.
Send Quantity and Unit Price to Xero for Line item invoices/credit notes?
- Lightyear will send Xero the unit cost and quantities if this option is enabled for Line item Bills/Credit Notes.
Please note due to Xero rounding, rounding rows may be inserted into Xero where the unit price is calculated in Lightyear up to 4 decimal places. If you wish to avoid this, please activate "Export unit prices to 4 decimal places" to support this function.
Export Unit Prices o 4 Decimal Places?
- Working with the above setting, unit prices will be exported to Xero working with 4 decimal places.
Send Product Code?
- Lightyear will send Product Codes to Xero. Please note this will only be successful if the products already exist in Xero. Products will be added to Xero inventory.
If you choose to send the attachment to Xero, keep in mind there is more data to push through so it may take a little bit longer to complete the export
Group Line Item Data?
Turning this on will allow you to export Grouped GL data, rather than line item data. For the full article on this, click here.
Supplier Cards are what Lightyear uses to connect a Supplier in Lightyear to a Supplier in Xero. Any existing Suppliers in Xero will appear here after connection, and you can create more using the Add button at the top.
When you connect to Xero, by default your list of existing Xero Supplier are synced to Lightyear.
Lightyear refers to your Xero contacts as 'Supplier Cards' and these are displayed within Settings > Accountancy > Supplier Cards.
Xero also has a concept of Contacts. These Contacts are not defined as a Supplier/Customer until you raise a bill/invoice against the contact.
When starting out, you may also wish to bring back your Contacts from Xero as well. Upon set up, you have the option to import Suppliers Only or Import All Contacts (Contacts AND Suppliers).
Head over to Settings > Accountancy > Supplier Cards > make your selection from the below options
- Import Suppliers from Xero will import Suppliers only (Lightyear imports Suppliers by default)
- Import All Contacts will import both Contacts AND Suppliers
You can also create any new Xero supplier cards from within Lightyear by Adding new suppliers in this section OR via the Suppliers (truck icon > add accounting supplier) and these supplier cards will be created within Xero upon export. We recommend all new supplier contacts are created from Lightyear. This can be done from the Accounting Software Settings page or from the Add New Supplier page under Suppliers.
GL Codes (Chart of Accounts)
Your chart of accounts are referred to as “GL Codes” in Lightyear.
Active GL (Chart of Accounts) codes are all synced with Xero when you connect your Xero & Lightyear accounts and displayed within the GL code section of 'Accountancy Settings'. The GL codes are all listed in a long list or you can select to filter by 'Type' (area 1) as seen in the below screen shot.
Lightyear does not sync back 'bank account' type Chart of Accounts.
If you make any subsequent updates to your GL's within Xero, you simply need to go to Accountancy Settings > GL Codes in Lightyear, click import from Xero (area 2), this will refresh your list.
If you wish to reduce the number of GL Codes that Lightyear presents to you in its drop down lists, then de-select the tick boxes (area 3) for those particular GL codes that you do not want to have displayed.
Don't forget to select a Rounding GL Code (area 4) as this will automatically code any automated rounding rows you add for any variances.
Set your default tax rates
When you initially connect to Xero, Lightyear will automatically import all your Xero defined tax rates.
You will need to choose two Xero tax rates to act as the defaults for taxable and non-taxable items. Lightyear will use these defaults to send the relevant tax code to Xero if a line is taxed/tax free, this is unless you choose to manually assign a different non-default tax rate to the item from within Lightyear's Bill Review section.
To choose your 2 defaults go to Settings > Accounting Software > Tax Rates.
The below image shows what a typical setup looks like. We have ticked the 2 standard tax rates (GST on Expenses and GST Free Expenses).
Note: Australian tax rates shown. Your tax rates may differ to the above dependng on your region which would be reflected from your Xero file
Now when Lightyear detects that an item is taxable or non-taxable, it will use these defaults to send with the bill/line-data to Xero (unless you select one of your other non-default codes for the item/supplier).
Setting a default tax rate against a certain supplier
Usually the Supplier tax rate is left blank, which allows the 2 defaults set above to work with maps.
But there may be circumstances where you assign a certain supplier with a different tax code to the defaults you have set at company level.
Go to the Suppliers > Select Supplier > Edit. You can then choose to set a default tax rate from the drop-down list.
Please note that you can only set one default tax rate. If you set a taxable rate as the Supplier default, your Lightyear company non-default tax rate will still be applied if there is a non-taxable item within the supplier bill, and vice-versa.
Tracking Categories, Departments, Locations
When syncing with Xero, Lightyear can import all of your Tracking Categories automatically if you have them setup in Xero and have this option selected in Lightyear. Here we refer to them as Departments & Locations, but you may have them named something else.
To turn on this option in Lightyear: Go to the Accountancy Software Settings > Software Settings > Select Yes for "Do you use Categories?"
You then need to import them into Lightyear. You also use this next step when you have added new Tracking Categories in Xero and want to import the new ones to Lightyear. To import them go to the Accountancy Software Settings > Categories > Import from Xero.
Please note this will import both Categories if you use them in Xero. Both of these can be viewed if you click on the drop down box for Category (as shown in below image).
If you have tracking categories that you won't be using in Lightyear, you can set these to Inactive by unchecking the In Use box. Note that having a large number of active tracking categories could degrade the app performance.
Selecting Categories, Departments or Locations
Lightyear allows you to apply one or two Tracking Categories at either an invoice level (from the drop down list presented to you at the top of Panel 2 - (the tall panel to the right hand side of the Lightyear screen), or at individual line item level. You can do this in Panel 2 of either the Approval Tab or the Review Tab. In the example below, you are looking at a section of Panel 2 in the Approval Tab. This is the detailed view which shows GL Codes, Tax codes, Categories/Departments/Locations. To see the expanded view you need to either drag the separator bar that splits the 2 sections across to the left, or you can click on the words 'View Details' in blue at the top of Panel 2 (above the supplier name).
In order to apply a separate Tracking Category, Department or Location etc to some or all of the rows of the bill, you can select it line by line or to change all the lines to the one category you can click on the Category Boxes within the View Detail section of the data extracted.
Please note your Tracking Categories may be labelled something else
More about Automatically Applying Categories
By switching this on, Lightyear will remember the Tracking Categories you have previously selected, and automatically apply these the next time the invoice is received in the Approvals tab.
This can be set as a supplier default, meaning one category will be selected for all lines of an invoice, or it can be set on a line-by-line basis, based on the product code.
To set as a supplier default, go to your Supplier, and under the Class/Location fields (these may be called something else in your Account), select the required option from the dropdown:
To set on a line-by-line basis, go to your Supplier > Products. Click the green pencil on the item you want to edit, and under the Class/Location fields (these may be called something else in your Account), select the required option from the dropdown:
Support for multi-currency exports
Whatever currency is on the bill we can export that to Xero. Ensure that your Xero file is on the right subscription level to accept multi-currencies and is set to the same currency extracted from the bill. Xero will be expecting the currencies to match their supplier settings or else you'll be presented with an error.