Integration with Xero

Overview:

Ostendo integration to Xero offers an automated approach to the posting process of financial entries. This means that depending upon your posting frequency setting, the financial transactions created in Ostendo will automatically be passed through to Xero as a background process.

There are 3 different methods of configuring Xero / Ostendo depending upon your environment and requirements.

Why three methods?

The method you choose depends upon the areas of Ostendo you wish to use. It is principally about whether you wish to manage your Accounts Receivable from within Ostendo or within Xero

 

Refer to the Ostendo Xero Integration Guide for full details



Method 1: (preferred method)

Uses both Xero and Ostendo Accounts Receivable Sub Ledgers

This method allows you to process AR payments from within Xero. The invoice will be raised in Ostendo, then passed through to Xero AR where you later record the customer payment through the Bank Reconciliation screen or via the Customer Payment options directly from Xero. Ostendo then reads back the customer payment and updates the invoice in Ostendo and creates an updated customer payment. (no financial posting is generated in Ostendo with this type of payment as it has already occurred within Xero)

This means that Ostendo AR ledger is constantly kept in sync with the Xero AR ledger.

Customer Statements could be run from either Xero or Ostendo.

As customers are added or maintained in Ostendo, those records are passed automatically with the posting process to Xero resulting in either new Contacts added, or existing Contact updated in Xero.

 

Method 2:

Uses both Xero and Ostendo Accounts Receivable Sub Ledgers

This method allows you to manage AR primarily from Ostendo. The invoice will be raised in Ostendo, then passed through to Xero AR. However unlike Method 1, you would then process the customer payment from within Ostendo. This payment will then be passed through to Xero to update Xero’s AR ledger.

Method 2 MUST be used if ‘ANY’ of these types of transactions originate from within Ostendo

  • Point Of Sale
  • Customer Payments
  • Customer Deposits

This can also be used if an existing Ostendo site prefers to capture customer payments directly within Ostendo even if Ostendo POS or Customer Deposits are not used.

The approach here is that customer payments are primarily maintained within Ostendo and are passed to Xero for Bank reconciliation purposes. Financial Postings are also passed through to Xero in this case.

Customer Statements could be run from either Xero or Ostendo

When you perform a bank reconciliation in Xero, instead of matching the payment to the Sales Invoice, you would be applying a Bank Rule to transfer the amount from a Bank Clearing account (Current Asset) to the Xero Bank account (Bank). This is because Xero does not allow Ostendo to post the Payment directly to the Xero Bank Account, therefore a clearing account is used to post to from Ostendo, leaving Xero to transfer this to Bank clearing at the point of reconciliation.

As customers are added or maintained in Ostendo, those records are passed automatically with the posting process to Xero resulting in either new Contacts added, or existing Contact updated in Xero.


Method 3:

Uses only Ostendo AR Ledger

This method should be used in high volume environments to minimise transaction volumes being passed to Xero. An example of a high volume site would be 500 sales and purchase invoices per day with an average number of lines being 20 or more.

Sales and Payment transactions are posted to Xero in a summarised form and processed daily as one Manual GL Journal. This approach means your debtors ledger is solely controlled from Ostendo. The Xero AR sub ledger and Customer Contacts are not used. Xero will only report the total Debtors value at a Balance Sheet level, whilst Ostendo will provide the detail from its own sub-ledger reporting.

This method adopts the approach that the AR ledger is solely maintained within Ostendo therefore Customer Statements can only be run from Ostendo.

When you perform a bank reconciliation in Xero, instead of matching the payment to the Sales Invoice, you would be applying a previously created Bank Rule to transfer the amount from a Bank Clearing account to the Xero Bank account.