Click to edit heading
Office side Accounting entries recorded in LEAP are also exported to Xero. The entries are held in a queue in LEAP so that you can evaluate them before you export them to Xero.
To review the entries ready for export in LEAP click the LEAP Menu > Accounting > under Office Accounting > Nominal Ledger Link (you may need to scroll down on the menu to locate it.)
The standard view shows all the items ready to be exported. The export status drop-down allows you to view other entries such as those previously exported and items that have been put on hold.
Hold items: If you have a transaction on the list which you do not want to be exported to Xero you can select the entry by ticking the box on the left-hand side then click “Change Status” to “On hold”
If you decide later to export the entry to Xero you will need to change the status back. This is useful for situations where you are unsure about an entry.
Below we examine the entries that are exported to Xero, how these journals look, and which ledger cards are used in Xero.
Office Payment (Disbursement)
In LEAP this entry is created on a matter file by posting an Office Payment which is available on the Office Accounting tab. It is used when a disbursement is paid out of the Office Bank for the Matter.
The entry reduces the amount of money in the Office Bank and Credits Leap Office Payments.
Pay Anticipated Payments
Anticipated payments are not exported to Xero when they are recorded in LEAP in themselves. However, they are accounted for in Xero when these are paid and there is an entry for them when they are billed to the client.
To pay the supplier of the Anticipated Disbursement choose “Pay Anticipated” under the Anticipated Payments section of the Office Accounting tab.
The entry reduces the amount of money in the Office Bank and Credits Leap Office Payments.
As far as the entries in Xero go this is identical to the Office Payment.
New Cost Recovery
Creating a cost recovery will not create a journal to export to Xero. Cost recoveries are not designed to create journals as they are often used for recording for costs that are don’t have a direct impact at the bank (e.g. parking, stamps, etc)
You can however create a purchase order from within a cost recovery that will create a journal in a separate section of the Xero Link. To access this area, you need to select the “Purchase Order” button located at the top right of the Xero link. Much like the default view you can review and export journals as and when required. The journal that is created is a single line showing in the Draft Purchases section of the Accounts tab.
For more information on Purchase orders, see Create a Purchase Order.
Invoice Client (Hybrid based VAT only)
When we finalise an invoice on the client matter LEAP will post a journal to Xero as soon as an invoice is finalised. This is classed as income. A number of entries are created to the Xero ledgers and can be exported at once. On a Hybrid VAT based system because you are liable for VAT on a cash basis but otherwise reporting on an accrual basis accrual basis the below journal will be created.
-
Credit 410: LEAP Client Fees (Income from Fee/Profit Costs)
-
Credit 420: LEAP Cost Recoveries (Other Income in Respect of Cost Recoveries)
-
Credit 430: LEAP Payments Received (Other Income in Respect of Office Payments)
-
Credit 822: LEAP VAT Collected (Liabilities in Respect of VAT on Unpaid Bills)
-
Debit 120: LEAP Debtors (Assets)
Office Receipt (Deposited)
Next, we look at what is exported when the above bill is paid. In LEAP this can be recorded via “Office Receipt” or “Client to Office Transfer.
When you pay an invoice within the Hybrid accounting system LEAP creates the above journal.
-
Debit 110: Bank (Assets – increases money in the office bank)
-
Credit 120: LEAP Debtors (Assets – reduces debtors; increases VAT payable)
-
Debit 822: LEAP VAT Collected (Liabilities - reduces VAT on unpaid invoices)
In this example the funds are deposited directly into the office bank due as the payment was received via Electronic Funds Transfer (EFT). If the funds are received by Cash or Cheque, then an amount will be sent to the LEAP Undeposited Funds nominal.
Invoice Adjustment (Discount above fee on the invoice by £100)
Once the invoice has been finalised, we can apply a discount by right clicking on the invoice line on the ledger and selecting “adjust invoice”
To reduce the invoice amount enter a negative value such as -100.
-
Credit 102: Leap Debtors (Assets - Reduces debtors)
-
Debit 612: Leap Discounts Given (Expenses)
-
Debit 822: LEAP VAT Collected (Liabilities)
Applying a discount will reduce the asset value of debtors and increase expenses/costs of sales and the VAT liability.
If the invoice has already been paid at the point of the adjustment, the VAT element will be debited from the VAT nominal, rather than the LEAP VAT Collected nominal.
It is possible to adjust an invoice and increase the cost of it. Please note that if you do this it has the opposite journal effect so (reduces discounts expenses and increases Debtors). Such an entry may be suitable if a discount is being removed but may not be suitable for other cases.
Reverse Invoice (Credit Note)
The reverse invoice option can be accessed by right clicking on the invoice line on the Office ledger. Then click on “Reverse”.
-
Debit 410: LEAP Client Fees (Income from Fee/Profit Costs – cost of sales reduced)
-
Debit 420: LEAP Cost Recoveries (Other Income in Respect of Cost Recoveries)
-
Debit 430: LEAP Payments Received (Other Income in Respect of Office Payments)
-
Debit 822: LEAP VAT Collected (Liabilities)
-
Credit 120: LEAP Debtors (Assets – debtors is reduced)
- Note that this is the mirror image of the invoice – it reverses each line. Here we are posting a credit note rather than writing off the bill.
- You can only reverse an invoice if it has been paid. If there are receipts against the bill, they must be reversed before you can reverse the invoice.
Write Off Invoice (Write off entire invoice)
If the bill will not be paid and you wish to write it off you may do so by right clicking on the invoice line on the ledger, choosing adjust invoice and then choose Write off.
-
Credit 102: Leap Debtors (Reduces debtors)
-
Debit 612: Leap Debtor Write Offs (Expense – increased by write off)
-
Debit 822: LEAP VAT Collected (Liabilities)
There is one line each for each time/fee entry and each of the disbursements on the bill.
If the invoice has already been paid at the point of the adjustment, the VAT element will be debited from the VAT nominal, rather than the LEAP VAT Collected nominal.
Note that this is moving this money to Write offs so balances will net off on the Trial Balance but the balance will remain on Client Fees, Cost Recoveries and Payments Received. Total reported income at the year-end should consider write offs so that income is not over-stated.
Write Off Disbursement
When an Office Payment (disbursement) has been paid, but not billed and you do not expect the client to pay it then you may write it off.
On the Office Accounting Ledger right click on the Office Payment and choose “Write Off”
With this entry we are simply moving an expense from Office Payments (Disbursements to written off disbursements.
If the disbursement was billed prior to being written off, the write off should be done using the procedure Write Off Invoice (above).
Credit Receipt
A Credit receipt can be posted to the matter by choosing “Credit Receipt” under the Office accounting tab.
This records an office credit. Normally you would only do this if you had an outstanding invoice as the SRA rules do not normally allow credit balances on the Office side of the ledger. Nevertheless, you can post them and if you raise an invoice later you can apply the credit to that invoice.
Apply Credit to Invoice
Once there is a credit balance on your case, you can apply that credit to any outstanding invoices.
The effect of this is to record the VAT on the invoice as now being paid.
Credit Refund
Credit refunds allow your firm to pay a credit balance out of the office.
Go to the office accounting tab, select the “Credits Ledger” drop down option and choosing “New Credit Refund”.
Reversals
Postings in LEAP can be reversed by double clicking on the line and selecting the “Reverse” option in the upper left. When you reverse an entry in LEAP, a corresponding journal will be created to reverse the entry in Xero. The debit and credit figures within the journal will appear in the opposite columns compared to the original posting.
Knowledge Base
