Xero Online Accounting Integration

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Integration with third-party systems like Xero is available for subscribers on a paid plan. This service allows you to post payroll transactions into Xero for bookkeeping purposes.

To get started, login to your PaymentEvolution Payroll account and go to SETTINGS -> COMPANY SETTINGS. Navigate to the GL tab.


Click on the orange IMPORT button. The next screen will display a list of third-party integration partners. Select Xero.


Next, the system will start the integration process with Xero by asking you to confirm the provider.


You will now be forwarded to the Xero site to authenticate and provide permission for PaymentEvolution to post transactions to your account. Login with your Xero credentials


Next, Xero will confirm the request and ask you to authorize PaymentEvolution Payroll to post transactions to your account


Once authorized, you'll be directed back to the PaymentEvolution site and have the opportunity to synchronize your Xero chart of accounts with the PaymentEvolution GL. Use the drop down lists to match the fields to the appropriate accounts imported from Xero.


Your GL import and synchronization is now complete. You can now process a payrun on the PaymentEvolution site. To do so, click on the PAYROLL tab and select PROCESS PAYROLL. Run your payroll as you normally would.

When you are ready to import your transactions into Xero, either click PAYROLL -> END OF PERIOD or start a new payrun. The system will prompt you to send your recent transactions to Xero


PaymentEvolution will send Xero any transactions you've done since you've last closed your payroll period. Older transactions in periods that you've already closed can be imported via REPORTS -> GL REPORTS. Just click the export button beside the report you wish to export into Xero.

Now the next time you log into Xero you'll see a draft invoice from PaymentEvolution Payroll.


Make note of the line items in the draft invoice. We'll match the line items to the chart of accounts given previously.

Talk to your accountant about the next steps

You now have a choice in how you will record this in Xero. If you want to take advantage of the bank reconciliation process in Xero (match invoice transactions against transactions in your bank account) you will need to remove two items from the draft invoice: "Payroll Clearing" and "Remittance to Payment Evolution". Just click the "X" on the right of the line item to remove that item from the draft invoice. This has the net effect of making the invoice "payable". Xero will record it as such and next time you reconcile with your bank statement, you will be able to match the invoice against the debits in your bank account.



If you will not be using bank reconciliation for payroll transactions, keep the invoice as is. This zero-balance invoice will record payroll transactions against a payroll clearing account as detailed in the draft invoice.

Ensure all the line items are correctly matched to the accounts in Xero and approve your invoice. That's it! You've successfully imported your payroll transactions into Xero Online Accounting.

Some things to note:

• Transactions can only be posted to Xero after you close your payroll period


• You need to be on a paid plan to access this integration feature


• Xero's existing payroll module does not calculate payroll deductions, taxes or any other custom benefits. You should use the PaymentEvolution Payroll site to perform your payroll runs


• Authorization to post transactions to your Xero account must be done with credentials of a "standard user" in the Xero system or higher. Read-only users cannot authorize PaymentEvolution Payroll data to be sent to Xero.

What a great strategic move by Payment Evolution to integrate with Xero! Congrats and thanks to Sam and the PE team.