Integrating Xero with Productive enables you to send invoices from Productive to your Xero account.
You can also enable payment synchronization with Productive, so when you mark an invoice as paid in Xero, that status will reflect in Productive (this also applies to partial payments or payments in tranches).
Additionally, you can choose to synchronize your budget expenses from Productive to Xero. Syncing expenses enables the integration of your financial data, ensuring accurate tracking and reporting.
Here's how to set up and manage this integration effectively!
Setting Up the Integration
#1 Link Your Xero Account to Productive
Navigate to Settings > App marketplace.
Find Xero in the list and click "Connect app".
A new window will open asking for permission to connect to Xero. Enter your Xero credentials to complete the connection.
#2 Enable Expense Syncing
After connecting your Xero account, you'll need to configure the integration settings.
Navigate to the Expenses card in the integration setup.
Check the box to enable exporting expenses to Xero.
Note: Enabling the Expenses sync will make the expense payment section visible for all expenses in the organization (this can be turned off if you disable the Xero expense sync).
Find out more about expense settings here.
#3 Select Default Expense Account Code
Choose the default Xero expense account code where expenses from Productive will be recorded.
#4 Map Service Types to Xero Account Codes (Optional)
You can map specific service types in Productive to Xero account codes for more organized and flexible expense tracking.
For example, expenses under the "Admin work" service type can be directed to a specific expense account in Xero.
#5 Save Integration Settings
Click "Save" to apply the integration settings. A green checkmark will indicate that the setup is complete.
You can edit the integration settings at any time if needed.
Syncing Expenses to Xero
1) Create an Expense in Productive
Before sending the expense to Xero, you must first save it (after which, the "Copy to Xero" option will appear in the upper-right corner of the expense input screen).
To make sure the expense form is filled in properly, here's a checklist of all the information you need to add:
Date
Add the expense creation date.
Service
Ensure at least one service within the budget allows expense tracking and then select it from the service dropdown.
Cost and Markup
Add the cost of the expense and optionally, add the markup. The "Total cost" is transferred to Xero as net value, and the applicable tax rate is selected from a dropdown menu after initiating the integration ("Copy to Xero").
The "Markup" field does not affect this integration because that amount is intended for the client. Here, we are focusing on supplier costs.Expense Description
Provide a description of the expense.
Attachment (optional)
Attach relevant receipts or scans.
Vendor
Select the vendor from your clients' list. This step is optional in Productive but mandatory for the sync with Xero.
Payment Due Date
Obligatory to push the expense to Xero.
Expense Approval
If you have expense approvals switched on, the expense needs to be approved first to be sent to Xero.
2) Copy the Expense to Xero
1) After saving the changes to your expense, Select "Copy to Xero" in the upper right.
2) A pop-up will appear allowing you to adjust the supplier (vendor) and the tax rate.
3) Click "Copy" to finalize the sync to Xero.
Tip: Ensure Correct Subsidiary Selection
If you set up multiple subsidiaries in your account, ensure the correct subsidiary is chosen in the budget to match the sync. If you have only one subsidiary, this step can be disregarded.
Editing and Syncing the Modified Expense
If you need to update the expense, edit it in Productive and save the changes by selecting the "Update expense" button in the lower left.
Then, hover over the "Expense copied" badge in the expense input screen, and select "Update existing".
Expense Sync and Purchase Orders
If you created your expense by issuing a purchase order, you can still copy it to Xero.
After opening such an expense, you will notice a link to the PO alongside the "Copy to Xero" badge in the upper right corner.
Best Practices
Regularly Review Sync Settings: Periodically review and update your sync settings to ensure accuracy and alignment with your financial management practices.
Double-Check Vendor Information: Ensure that all vendor information is accurately entered in Productive to prevent sync errors.
Monitor Sync Status: Keep an eye on the sync status and address any error messages promptly to maintain smooth operations.