Comparing Xero Balances with LEAP Reports

16/05/2024
Knowledge

How To

Before you start it is valuable to periodically compare the balances in LEAP and Xero in order to confirm that the office accounting balances are in complete agreement. In particular, it is crucial to do so when initially beginning to use the two systems, as otherwise there will permanently be a discrepancy between the two systems.

The most straightforward way to compare the two systems is to use the Xero Journal Exports report in LEAP (Reports > Office > Xero Journal Exports). This will show the value of the journals exported to any given nominal over any date range. In turn, this is useful to determine whether there have been postings recorded to, or removed from, those nominals independently in Xero. However, it will not give you the details of the clients/matters involved. To obtain this information, you need to refer to the other LEAP reports for comparison.

There are three different accounting basis for LEAP and Xero to operate on. Cash, Hybrid, and Accrual. You can confirm which accounting basis your LEAP system is set as by clicking the LEAP Menu > Settings > Application Settings> Nominal Ledger, where it will be set out at the bottom of the page. For exactly how each posting will be handled on each basis, see the related links at the bottom of this page. The accounting basis will change when or whether LEAP exports postings to certain nominals. As such, where it is appropriate, a nominal may have different comparisons, depending on how the firm has been set in LEAP. There are also three different ways that nominals can be compared with LEAP.

These are:

Over a given date range
As at a specific date
As at the current date

In each instance, it will be specified how the nominals can be compared. Any limitations in the comparison will also be set out.

Assets

LEAP Undeposited Funds

On all accounting basis, this ledger represents the value of cash/cheque receipts not yet marked as deposited in the bank. There is no report that will show undeposited office receipts, but in order to reconcile the ledger against LEAP as at the current date, click the LEAP Menu > Accounting > under Office Accounting > New Bank Deposit. This will display all currently undeposited entries. If you then select all the entries, the total should match the balance of the LEAP undeposited funds ledger in Xero.

LEAP Debtors

Cash Basis - On a cash basis LEAP does not create Xero journals when invoices are raised, so this nominal will not be used.

Hybrid/Accrual Basis – The Debtors nominal represents the value of the debts owed to the firm. This also considers any unallocated credit balances. This can be compared to the Aged Debtors report as at any date. It also tracks quite closely to the Invoices Report, where the parameters are set to:

Start Date	01/01/2000 (or another date preceding the earliest posting)
End Date	Date being compared to
Invoice	Printed Sent (Final) only
Show Inactive Staff	Yes, with all Staff Acting & Responsible selected
Show Outstanding Invoices Only	Yes

This should be very similar to the aged debtors balance, and provide a greater breakdown of Fees, Disbursements & VAT, but is an imperfect comparison as it will not include credit balances not allocated to invoices, or where receipts are dated prior to the invoice.

LEAP Debtors Adjustment

Cash Basis Only - The LEAP Debtors Adjustment nominal is only used on a Cash basis where a receipted invoice has been adjusted. Each series of journals created by an adjustment will create matching debit and credit values on this nominal, leaving it with a nil balance. There should be no balance to reconcile at any point.

Liabilities

LEAP VAT Collected

Hybrid Basis Only – This nominal relates to VAT on unpaid invoices. It is only used on the Hybrid accounting basis as the Cash basis does not export invoice information to Xero, and the payment status of an invoice is irrelevant for VAT purposes on an Accrual basis. It can be compared with LEAP up to any date, though may require some manual calculation. When an invoice is raised, the invoice will go over to Xero with the VAT element being held in the VAT collected nominal. In order to reconcile this between LEAP and Xero, go to Reports > Office Reports > Invoices Report.

Set the following parameters:

Start Date	01/01/2000 (or some other date that precedes the earliest invoice on LEAP)
End date	The date being reconciled to
Outstanding invoices	Yes
Show Inactive Staff	Yes, with all Staff Acting & Responsible selected
Invoices	Printed Sent (Final) only

If you have no part paid invoices (i.e. this report shows nothing in the ‘payments received’ column), then the total value of the Fees Tax & Disbursements Tax columns should match the balance of the LEAP VAT collected nominal. Where there are part paid invoices, the reconciliation becomes more complicated. A receipt against an invoice is applied to the elements of that invoice proportionally, e.g. if a bill is half paid, then LEAP & Xero will consider half the fees, half the disbursements and half the VAT to be paid. On these cases, you would need to calculate the percentage of the total bill that is outstanding, then apply that percentage to the Fees Tax and Disbursement Tax values for that invoice.

Income

LEAP Client Fees

Cash Basis – The LEAP Client Fees nominal will show monies received against fee elements on invoices or where a credit balance is applied to the invoice. There are several of reports that show the value of receipts, but none that will correspond exactly with the transactions in this nominal.

Hybrid/Accrual Basis – The LEAP Client Fees nominal will show the value of fees on finalised invoices. This can be reconciled up to any date. Run the Invoices Report (Reports > Office > Invoices Report) with the following parameters:

Start date	01/01/2000 (or some other date that precedes the earliest invoice on LEAP)
End date	The date being reconciled to
Invoices	Printed Sent (Final) only

The Fees (excluding VAT) column in this report will match the LEAP Client Fees nominal.

LEAP Cost Recoveries/LEAP Payments Received

For the purposes of reconciling between LEAP & Xero, these two nominals are combined and their total value used for comparison.

Cash Basis – These nominals will record the value of receipts recorded against the Cost Recoveries and Office Payments/Anticipated Payments (respectively) elements on finalised invoices. There are no standard reports in LEAP that will specifically isolate receipts against the Disbursements/Cost Recoveries Elements of an Invoices from receipts against the Fees.

Accrual/Hybrid Basis - These nominals will give the value of the Cost Recoveries and Office Payments/Anticipated Payments (respectively) elements on finalised invoices. This can be calculated up to any date using the Invoices report (Reports > Office > Invoices Report) with the following parameters:

Start date	01/01/2000 (or some other date that precedes the earliest invoice on LEAP)
End date	The date being reconciled to
Invoices	Printed Sent (Final) only

The Disbursements (excluding VAT) column in this report will match the combined value of the LEAP Cost Recoveries and LEAP Payments Received nominals.

LEAP Client Credits

Cash Basis Only – The LEAP Client Credits nominal is only utilised on the Cash basis. It represents the value of office bank credit balances that are not allocated to an invoice. This can be found in LEAP as at any given date using the Matter Balances report (Reports > Office > Matter Balances) when the following parameters are set:

Include Inactive Staff	Yes
Person Responsible	Select All
Person Acting	Select All
Include Archived Matters	Yes
Inc Tax	No

The total value of the Credits column on the final page will correspond with the LEAP Client Credits nominal.Hybrid/Accounting Basis – Credit balances are displayed as credits against the LEAP Debtors nominal on these basis, so the LEAP Clients Credits nominal is never utilised.

Expenses

LEAP Discounts Given/LEAP Debtors Write Offs

Hybrid/Accrual Basis – This nominal is only used on these basis. Between them they represent the value of adjustments against finalised invoices. As there are no reports in LEAP that will separate the two different types of adjustments, the value of the two nominals will need to be combined when comparing with LEAP. This can be done over any date range.

From within LEAP, go to Information in the toolbar and select the Search Transactions option. There will be an option saying Invoices Adjustments. Click this and select your desired date range, then click the Print icon in the upper right. The report that this generates will include a total line in the ‘Debits’ column, which should match to the total of the LEAP Discounts Given & LEAP Debtors Write Offs nominals.

LEAP Payments Write Offs

All Basis – This nominal represents the total value of written off Office Payments. This can be reconciled between LEAP & Xero for any date range.

From LEAP, go to the Information drop down from the top of the page and select the Search Transactions option. In the drop down on the left you can select Office Disbursement and any date range at the top of the page. This report will show any Disbursement Journals (which always have equal debits and credits) and Disbursement Write Offs. You will be able to print this list using the Printer icon in the top right corner. The printout will have a total debit and credit balance at the top. The total Credits less the total Debits will correspond to the balance of the LEAP Payment Write Offs nominal in Xero.

LEAP Office Payments

All Basis – This nominal represents the value of all New Office Payments and payments in relation to Anticipated Payments, less the value of any Disbursement write-offs. It can be reconciled to LEAP over any date range.

The value of all Payments (whether standard payments or payments in relation to Anticipated Payments) can be ascertained in LEAP from the Office Payments report (Reports > Office > Office Payments). This would need to be run for each Office bank account that will have transactions in the date range. You will want to take the total of the Amount Excluding Tax column for each bank and add those together.

To fully reconcile with the LEAP Office Payments nominal, you will need to consider the written off office payments, which will have reduced the Xero balance. Calculate this balance using the steps from the LEAP Payments Write Offs nominal above. The LEAP Office Payments nominal will match to the Office Payments report, less this amount.

Office Bank

All Basis – As LEAP is only concerned with transactions that relate to matters, there will be numerous postings that affect the office bank that are posted in Xero itself and do not get added to LEAP. As a result, the only complete record of the office accounting can be found in the Xero system.

Your options for comparing the nominal to LEAP would be limited to the Office Payments & Office Receipts reports (Reports > Office > Office Payments/Receipts respectively) though this would, by its nature, not provide the complete transaction history affecting the bank.

VAT

The full VAT balance will almost certainly include Input VAT being reclaimed on a number of practice expenses. As such it is not possible to reconcile the VAT Nominal with any report in LEAP. However, some comparisons can still be found, in particularly when looking at the Output VAT aspect of the VAT Return, as tax on invoices raised is the primary, if not sole, source of Output VAT.

Cash/Hybrid Basis – the Output VAT will correspond to the VAT on receipts against finalised invoices. This will closely correspond in LEAP to the VAT Column of the Office Receipts Report (Reports > Office > Office Receipts). This report can be run for any date range.This comparison is somewhat limited as it will only show receipts, not the application of credits. If receipts are only recorded after invoices are finalised this should not present an issue.

Accrual Basis – the Output VAT will correspond to the VAT on finalised invoices. This can be reported on in LEAP using the Invoices Report (Reports > Office > Invoices Report) up to a specific date.

Set the parameters as:

Start date	1/1/2000 (or a date preceding the earliest invoice)
End date	The date being reconciled to
Include all Staff	Yes
Invoice	Printed Sent (Final) only

The total value of the Tax on Fees & Tax on Disbursements column should correspond to the Output VAT up to that date.

Last Modified Date

16/05/2024 2:36 am

Title

Comparing Xero Balances with LEAP Reports

URL Name

Comparing-Xero-Balances-with-LEAP-Reports-IE

Resolution