Mapping Your Default Xero Account Codes

Topic

Part of completing the link between Tradify and Xero involves mapping your default accounts in order to post revenue, expenses and payments received to Xero.

In this article, we will cover off the four default account code selections to map in Tradify. These are  Sales of Labour, Sales of Materials, Bank Account, & Purchases Account.

Note: Regarding Tradify, there's no right or wrong way to map accounts. It's up to you how this info is sent to Xero. If unsure, please consult your accountant or bookkeeper for advice on the best default account settings.

Sales of Materials and Sales of Labour Accounts

Tradify uses these accounts to post revenue or income which is basically derived from labour and materials (as they appear on customer invoices).

These two accounts must be mapped to either a sales, revenue, or income account type in Xero. The default account codes for these account types will range between 200 to 299 unless they have previously been altered in Xero.

In the example shown above, we have mapped our sales of materials and sales of labour accounts to 200 - Sales. If we were to post invoices to Xero, both our labour and material line items will be posted to 200 - sales.

Bank Account

Tradify uses this account to post payments received from customers (as they are applied to invoices created in Tradify). The account selected must either be a bank account or an asset account type.

In the example below, we have mapped ours to a bank account.

If you'd prefer to use an asset account, please make sure that it has the option "Enable Payments to this Account" selected in the account set up in Xero (as shown below). 
 

Purchases Account

The Purchases account is used to post purchases derived from bills which are being sent over to Xero.

This account must be mapped to an expense, cost of sales, or direct cost account type in Xero. The default account codes for these account types will range between 300 to 599 unless they have been previously altered in Xero.  

In the example shown above, we have mapped our purchases account to 310 - Cost of Goods Sold. If we were to post a bill to Xero, our material line items would be posted to 310 - Cost of Goods Sold.

Note: The Purchases account is just the default and not a one-code limit. You can assign specific account codes to price list items or change the code on a bill line before sending it to Xero. This allows you to split costs across multiple Xero accounts. If unsure, consult your accountant or bookkeeper.

Additional Information

For more info on the Xero integration, see here: Understanding Xero and Tradify's Integration