Setting up the Xero integration with Coreloops

Coreloops makes it easy to process purchases, update your project cost reports, and sync with your accounting system all in one workflow. Now you no longer have to enter data twice into your accounting system and then again into your project cost reports.

Written By Gabriel Makinwa

Last updated 14 days ago

How to set up your Xero integration

Connecting to Xero

First, ensure you already have an existing account on Xero. If you haven’t please register here: https://www.xero.com/uk/signup/

Head to the Settings tab under your name in the right hand corner.
Click on the integrations tab in settings Integrations.
Click on 'Connect to Xero'

You’ll be redirected to the Xero authentication page to log in and authorise Coreloops to access your accounting system.

Once you’ve connected Xero and allowed access to your account, you'll see the connected label beside the Xero login on the integrations page.

You'll be prompted to finish your setup by completing your sync settings. This is where you set the direction you want your data to be synced. Fore each document and contact type you can choose from:

Coreloops to Xero
Xero to Coreloops
Both ways
Don't Sync

Cost & Sales Settings

Here you can map cost codes to specific accounts in Xero. This determines which accounts specific purchase invoices and sales invoices are synced to. You can also set the default chart of accounts that all of your purchases and sales invoices will be allocated to when synced to Xero.

Note: When a document is split and allocated to several different cost codes it will be sent to Xero as one purchase with a line item for each part of the split purchase. Each line item will be allocated to the connected account or the default account, if codes haven't been synced.

Note: The chart of accounts is a list of all accounts you can use to record your transactions in Xero. It helps you categorise your transactions correctly and group similar accounts together to generate reports about your organisation.

Now that you've connected your Xero account you can do a few more things to ensure your purchases processed in Coreloops are synced to Xero correctly.

Import your contacts

Once you've set the sync direction for contacts. Head over to the directory tab by clicking on 'Directory' in the menu under your initials in the right hand corner.

You'll see all of your contacts from Xero for you to select which you'd like to import into Coreloops. You can import all of them by clicking 'Import All' or selecting the contacts you'd like to import individually.

Document Sync Settings

When syncing documents to Xero, you can choose which status a document is mapped to based on the status in Coreloops at the time of syncing.

For each of the following document types, you can configure how statuses are mapped and how documents are synced.

Invoices (sales & purchases) - Sync status settings

Coreloops Status	Xero Status	Notes
Draft	Draft	Sync as draft: Select this option if you want the invoice to be synced to Xero as a draft invoice when the status is updated to draft in Coreloops. Note: When you create a new document in Coreloops. It automatically defaults to draft status. Once the required fields are updated, it automatically updates to Pending. To sync to Xero as a draft, you'll need to update the status back to draft. Don't Sync: Select this option if you don't want draft invoices to automatically sync. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.
Pending	Awaiting Approval	Sync as Awaiting Approval (Submitted): Select this option if you want the invoice to be synced to Xero as Awaiting Approval when the status is updated to Pending in Coreloops. Don't Sync: Select this option if you don't want pending invoices to automatically sync to Xero. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.
Approved	Awaiting Approval OR Awaiting Payment	Sync as Awaiting Approval: Select this option to have the invoice synced to Xero as Awaiting Approval when the status is updated to Approved in Coreloops. This will require an additional approval in Xero before it can be paid. Sync as Awaiting Payment: Select this option to have the invoice synced to Xero as Awaiting Payment when the status is updated to Approved in Coreloops. You will then be able to mark an invoice as paid in Xero. Don't Sync: Select this option if you don't want Approved invoices to automatically sync. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.
Paid	Paid	Sync as Paid: Select this option to sync the invoice to Xero as a paid when the status is updated to paid in Coreloops. Note: When a document is marked as paid in Xero you can no longer make any edits to the document. To edit the paid document in Xero you will need to mark it as void and then resync a new copy of the bill. Don't Sync: Select this option if you don't want paid invoices to sync automatically to Xero. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.

Purchase Orders - Sync status settings

Coreloops Status	Xero Status	Notes
Draft	Draft	Sync as draft: Select this option to sync the purchase order to Xero as a draft purchase order when the status is updated to draft in Coreloops. Note: When you create a new document in Coreloops. It automatically defaults to draft status. Once the required fields are updated, it automatically updates to Pending. To sync to Xero as a draft, you'll need to update the status back to draft. Don't Sync: Select this option if you don't want draft invoices to automatically sync. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.
Pending	Awaiting Approval	Sync as Awaiting Approval (Submitted): Select this option if you want the purchase order to be synced to Xero as Awaiting Approval when the status is updated to draft in Coreloops. Don't Sync: Select this option if you don't want draft purchase orders to automatically sync to Xero. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.
Approved	Awaiting Approval OR Awaiting Payment	Sync as Awaiting Approval: Select this option to have the invoice synced to Xero as Awaiting Approval when the status is updated to Approved in Coreloops. This will require an additional approval in Coreloops before it can be paid. Sync as Awaiting Payment: Select this option to have the invoice synced to Xero as Awaiting Approval when the status is updated to Approved in Coreloops. You will then be able to mark an invoice in Xero as paid. Don't Sync: Select this option if you don't want Approved invoices to automatically sync. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.
Billed	Billed	Sync as Billed: Select this option to have the purchase order synced to Xero as Billed when the status is updated to draft in Coreloops. Don't Sync: Select this option if you don't want purchase orders marked as billed to automatically sync. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.

Credit Notes - Sync status settings

Coreloops Status	Xero Status	Notes
Draft	Draft	Sync as draft: Select this option if you want the credit note to be synced to Xero as a draft credit note when the status is updated to draft in Coreloops. Note: When you create a new document in Coreloops. It automatically defaults to draft status. Once the required fields are updated, it automatically updates to Pending. To sync to Xero as a draft, you'll need to update the status back to draft. Don't Sync: Select this option if you don't want draft credit notes to automatically sync to Xero when the status is updated to draft. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.
Pending	Awaiting Approval	Sync as Awaiting Approval (Submitted): Select this option to sync the credit notes to Xero as Awaiting Approval when the status is updated to draft in Coreloops. Don't Sync: Select this option if you don't want pending invoices to automatically sync. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.
Approved	Awaiting Approval OR Awaiting Payment	Sync as Awaiting Approval: Select this option if you want the credit note to be synced to Xero as Awaiting Approval when the status is updated to Approved in Coreloops. This will require an additional approval in Coreloops before it can be marked as paid. Sync as Awaiting Payment: Select this option to have the credit note synced to Xero as Awaiting Approval when the status is updated to Approved in Coreloops. You will then be able to mark an invoice as paid in Xero. Don't Sync: Select this option if you don't want Approved creidt notes to automatically sync. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.
Paid	Paid	Sync as Paid: Select this option to sync the credit note to Xero and mark it as paid when the status is updated to paid in Coreloops. Note: When a document is marked as paid in Xero you can no longer make any edits to the document. To edit the paid document in Xero you will need to remove the payment mark it as void and then resync a new copy of the bill. Don't Sync: Select this option if you don't want paid invoices to sync automatically to Xero. You can choose to sync this document manually by clicking sync document in the bottom right-hand corner in the view document page.

Linking cost codes to the Chart of Accounts in Xero

One of our most useful features on Coreloops is the ability to connect your project cost codes e.g. E005 - electrical containment or SUB002 - Drylining to the relevant chart of accounts (nominal codes) e.g. "Cost of Sales" in Xero. This enables you to allocate your purchases and costs to detailed cost codes in Coreloops and have them automatically synced to Xero with the right chart of accounts and tax details pre-filled. This will save your admin team hours in double data entry into Xero and then again into project cost reports.

You can link your cost codes to accounts in Xero in project settings.

Connect Cost Codes to Chart of Accounts

When syncing your purchases to Coreloops, you can configure which Xero accounts they are synced to by connecting your cost codes.

Head over to Xero settings, then click on the Cost Settings Tab

Click on the Xero Code box for each cost code

Select which chart of accounts each cost code should be synced to. By syncing a cost code to a chart of accounts, each document (or part of it) assigned to this cost code will be sent into Xero and categorised to the respective account.

Note: You can also set a default account that all cost codes that have not been mapped will be linked. For example, if you create a new cost code and it hasn't been linked to an account, any document line items linked to that cost code will be synced to Xero against the default account, e.g., Cost of Goods Sold or Suspense.

You can also repeat the same process for sales invoices. This will enable you break down your sales invoices by cost code but link them to one chart of accounts in Xero e.g. Sales or Services.

CIS Settings

If you verify and manage your CIS subcontractors in Xero you can set up Coreloops to sync your bills in the right way to enable semaless CIS reporting and monthly returns.

To enable CIS in Coreloops head over to your Xero settings in the company settings page.

Toggle on the "Enable CIS" button.
Select an account for
- Labour Cost: Your CIS labour account typically 321 - CIS Labour Expense
- Materials Costs: Your CIS Materials account typically 322 CIS Materials Purchases.
  Once enabled, all invoices that include a CIS tax amount will be synced to Xero with two line items: one for CIS Labour (where the tax rate is applied) and another for materials (where the tax rate is not applied). If the supplier/contact has CIS enabled in Xero, this will automatically calculate the CIS tax to be deducted and update your monthly returns once approved.

Map Tax Rates

In Coreloops, you can map VAT rates in Coreloops to specific VAT rates in Xero. This ensures that when documents are synced into Xero they have the correct tax rates applied.

Head to Xero integration Settings in your company settings
Go the Tax Rates tab
Map each tax rate to a VAT rate in Xero for both expenses and sales.

Tracking categories

If you use tracking categories in Xero for projects, you can map your projects in Coreloops to specific tracking categories in Xero. This will ensure that any document synced to Xero is automatically allocated to the linked tracking category.

To set this up

Head to Xero settings in your company settings
Click on Tracking Categories
Select a tracking category for each project.

Note that these must be set up in Xero first, and you can map projects to only one set of tracking categories.