Comparing Xero Balances with LEAP Reports

Oct 15, 2023
Knowledge

How To

Before you start it is valuable to periodically compare the balances in LEAP and Xero in order to confirm that the operating account 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 > Operating Account > Xero Journal Exports). This will show the value of the journals exported to any given ledger over any date range. In turn, this is useful to determine whether there have been postings recorded to, or removed from, those ledgers 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 two different accounting basis for LEAP and Xero to operate on. Cash and Accrual. You can confirm which accounting basis your LEAP system is set as by clicking the LEAP Menu > Settings > Application Settings> General Ledger > General 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 ledgers. As such, where it is appropriate, a ledger may have different comparisons, depending on how the firm has been set in LEAP. There are also three different ways that ledgers 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 ledgers 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/check payments received not yet marked as deposited in the bank. There is no report that will show undeposited operating account payments received, but in order to reconcile the ledger against LEAP as at the current date, click the LEAP Menu > Accounting > under Operating 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 ledger will not be used.

Accrual Basis – The Debtors ledger represents the value of the debts owed to the firm. This also considers any unallocated retainer 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 & Tax, but is an imperfect comparison as it will not include retainer balances not allocated to invoices, or where payments received are dated prior to the invoice.

LEAP Debtors Adjustment

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

Liabilities

LEAP Tax Collected

When an invoice is raised, the invoice will go over to Xero with the Tax element being held in the Tax collected nominal. In order to reconcile this between LEAP and Xero, go to Reports > Operating Account > 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 Tax 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 Tax 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 ledger will show monies received against fee elements on invoices or where a retainer balance is applied to the invoice. There are several reports that show the value of payments received, but none that will correspond exactly with the transactions in this ledger.

Accrual Basis – The LEAP Client Fees ledger will show the value of fees on finalized invoices. This can be reconciled up to any date. Run the Invoices Report (Reports > Operating Account > 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 Tax) column in this report will match the LEAP Client Fees ledger.

LEAP Expense Recoveries/LEAP Payments Received

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

Cash Basis – These ledgers will record the value of payments received recorded against the Expense Recoveries and Operating Account Expenses/Anticipated Expenses (respectively) elements on finalized invoices. There are no standard reports in LEAP that will specifically isolate payments received against the Disbursements/Expense Recoveries Elements of Invoices from payments received against the Fees.

Accrual Basis – These ledgers will give the value of the Expense Recoveries and Operating Account Expenses/Anticipated Expenses (respectively) elements on finalized invoices. This can be calculated up to any date using the Invoices report (Reports > Operating Account > 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 Tax) column in this report will match the combined value of the LEAP Expense Recoveries and LEAP Payments Received ledgers.

LEAP Client Retainers

Cash Basis Only – The LEAP Client Retainers ledger is only utilized on the Cash basis. It represents the value of operating account bank retainer 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 > Operating Account > 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 Retainers column on the final page will correspond with the LEAP Client Retainers ledger.

Expenses

LEAP Discounts Given/LEAP Debtors Write Offs

Accrual Basis – This ledger is only used on these basis. Between them they represent the value of adjustments against finalized invoices. As there are no reports in LEAP that will separate the two different types of adjustments, the value of the two ledgers 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 ledgers.

LEAP Expenses Write Offs

All Basis – This ledger represents the total value of written off Operating Account Expenses. 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 Operating Account Disbursement and any date range at the top of the page. This report will show any Disbursement Journals (which always have equal debits and retainers) 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 retainer balance at the top. The total Retainers less the total Debits will correspond to the balance of the LEAP Expense Write Offs ledger in Xero.

LEAP Operating Account Expenses

All Basis – This ledger represents the value of all New Operating Account Expenses and expenses in relation to Anticipated Expenses, less the value of any Disbursement write-offs. It can be reconciled to LEAP over any date range.

The value of all Expenses (whether standard expenses or expenses in relation to Anticipated Expenses can be ascertained in LEAP from the Operating Account Expenses report (Reports > Operating Account > Operating Account Expenses Report). This would need to be run for each Operating 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 Operating Account Expenses ledger, you will need to consider the written off operating account expenses, which will have reduced the Xero balance. Calculate this balance using the steps from the LEAP Expenses Write Offs ledger above. The LEAP Operating Account Expenses ledger will match to the Operating Account Expenses report, less this amount.

Operating Account Bank

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

Your options for comparing the ledger to LEAP would be limited to the Operating Account Expenses & Operating Account Payments Received reports (Reports > Operating Account > Operating Account Expenses Report/Payments Received Report respectively) though this would, by its nature, not provide the complete transaction history affecting the bank.

Tax

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

Cash Basis – the Output Tax will correspond to the Tax on payments received against finalized invoices. This will closely correspond in LEAP to the Tax Column of the Operating Account Payments Received Report (Reports > Operating Account > Operating Account Payments Received). This report can be run for any date range. This comparison is somewhat limited as it will only show payments received, not the application of retainers. If payments received are only recorded after invoices are finalized this should not present an issue.

Accrual Basis – the Output Tax will correspond to the Tax on finalized invoices. This can be reported on in LEAP using the Invoices Report (Reports > Operating Account > 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 Tax up to that date.

Last Modified Date

10/15/2023 10:24 PM

Title

Comparing Xero Balances with LEAP Reports

URL Name

Comparing-Xero-Balances-with-LEAP-Reports-US

Resolution