The purpose of the Inter-Entity Loan Linker is to facilitate reconciliation of your inter-entity loan transactions in multiple cloud accounting files, ensuring that they always remain in balance and streamlining the data entry between files.
The Inter-Entity Loan List Page
|Create new Inter-Entity Loan||Select this to start the process of creating a brand Inter-entity loan schedule.|
|Filter, Actions & Select a Client Group||This area has 3 components
|The list...||This is a snapshot of all current Inter-Entity Loans being reconciled within your practice and their current status.
|Actions Column||These are the actions available to you for each equipment finance line.
Before you start
For the two Xero Organisations to be linked together
- Go to Xero for each org and complete the following
- Check when the inter-entity loans last reconciled and record this date; This will be your commencement date with the Inter-entity loan setup.
- Connect the clients Xero Org to AccountKit
- Go to the client edit screen for each client
- Select the Xero Icon under integrations and select the applicable client.
- You will then be returned to AccountKit
- AccountKit will now go and retrieve all of the transactions for the connected Xero organisations. Upon completion, you will receive a notification.
- See here for a more detailed description about the Xero connection process.
|Please note that until this process is completed, you won't be able to set up any tools with respect to the entities just connected. Depending on how long the Xero file has been in existence, it may take a while so don't worry if the notification takes its time to show up. Future sync's with Xero will be quick though since we'll just be syncing any modified transactions since the last sync which happens at least every night.|
Setting up your first Inter-entity loan (IEL)
Once the Xero data has successfully transferred and you've received the notification. Head to the Inter-Entity Loan Tool via the main menu.
- Set the start date you would like to start reconciling from; (we will check balances before commencing to ensure you're balanced before commencing.
- Select the two client entities you intend to reconcile with. (Note that only clients connected to Xero will show up in these lists.)
- Go through both entities and add in the accounts you intend to reconcile between.
- Once you've selected all the applicable accounts, check that the accounts are in balance as at the start date. They don't have to be, but you'll have problems reconciling if they aren't. If they're not in balance, you can either:
- Change the start date to when they did last reconcile; OR
- If only for a small amount, you have the option to select [ADJUST OPENING BALANCES] to prepare a quick journal as at the conversion date to re-align the two inter-entity loans.
- Adjusting Entry
- Then press "SAVE" to finalise the setup and get ready to start reconciling.
The Reconciliation Page Layout
|Show to date||This filters the visible transactions and current balance to this date.|
|Actions||Your options here are to:
|Tabs||Where there is more than one inter-entity loan within a group, you'll see these listed across the top of the page.
The information contained within each tab includes:
|Client Names||The header areas identify the following:
|Balances||Each entity shows two balances at any time.
|Transaction Table||Simply lists the transaction within each account selected for each Xero org. Selecting a transaction will update the "Selected Total" above.
There are a number of icons that are used within the reconciliation area:
|The Actions Menu||At the end of each line for reconciliation, when you hover over the line you're presented with a 3 dotted menu; Selecting this will show a context-sensitive menu enabling you to do things in the context of the selected line:
You also have a "Quick post" option if you simply want to post a single entry to a single account in the other Xero Organisation, rather than going through the full journal option.
Reconciling the inter-entity loans
The process for reconciling the inter-entity loan is a super simple process not unlike any other reconciliation you've ever done.
First, it'll be helpful to know what the different colours mean as we use them to indicate the status of transactions within the lists:
- Light Green with outline - Selected
- Solid Green - Selected and totals matched ready to reconcile
- Light orange with outline - Reconciled
- Solid Orange - Selected reconciled transactions ready to un-reconcile.
- Light red with an outline - Means there's an issue with a reconciliation due to a change in a transaction. ie. deleted or amount change for example.
- Red - Selected transaction with any issues; Your only option here is to un-reconcile which will void any AK created entries and re-align the IEL transactions with Xero.
Step 1: Reconcile and match off the obvious transactions...
The aim initially is to clear as much as you can from the reconciliation page so you're only left with the items that need further investigation or allocation.
- Go through and select the transactions you can match on the left and right columns OR select the auto-match function to have AccountKit make a suggestion of the obvious reconciliations.
- The selected transactions will go a solid green once the sum of the selections on both sides matches and a reconciliation tick will appear in the center in the same green colour.
- Press the reconcile tick to reconcile and hide the transactions.
- Select the auto-match option to select matching transactions in bulk.
- Press the reconcile tick to reconcile and hide all the selected transactions.
Step 2: Create entries for unreconciled items
At this point, you'll find you have a bunch of unreconciled transactions to be dealt with which we want to create some entries for.
- You can only post to one entity at a time, so select those that you would next like to reconcile on the left side. Every line selected will create a separate journal so that we have a one-to-one mapping between reconciled entries, rather than a net figure for multiple selected lines.
- Now select the arrow pointing to the right identifying that you're about to post some entries via journal from entity one to entity two.
- A journal window will now pop-up which you can start filling in as you would any normal journal.
- Journal Narration: Enter something useful such as "IEL transactions as at 30/06/2014"
- Date: Identify the date you would like to post the journal; By default, the date of the last transaction is entered.
- Show on Cash Reports: By ticking this box, the journal entries will show up in any cash reports in Xero, otherwise they'll only show up in accruals reports.
- Now work your way down the rows
- AccountKit will have already put in a debit and credit line for each transaction selected.
- The "S" is a visual cue that this is the source side transaction; You will be limited in those lines to only selecting one of the accounts included in the reconciliation. If you're only reconciling one account per entity, then you'll only have the one option.
- Enter a description, account, tax code and where applicable the tracking categories. If you need to split any of the entries, press the (+) add new journal line option at the bottom.
- You can then use the drag handlebars on the left to re-order lines if you wish;
- Once the journal reconciles and you're happy with it, select "validate" to ensure all fields have been populated correctly, after which the post button will appear, which you can then push;
- Upon completion of posting the journal into Xero, the transactions will be marked as reconciled and hidden.
- Now work your way down the unreconciled items on the right side until all entries are completed.
- Once both columns are empty, you are then complete.
|If you're having issues posting reconciliation entries, check that you're not trying to post into a locked period within Xero.|
Now you can pat yourself on the back for a job well done and go make yourself a coffee ... or head on to the next inter-entity loan along the top.
Un-reconciling transactions & fixing exceptions
Un-reconciling a transaction
At times you'll identify a transaction that has been wrongly reconciled, at which point you'll want to unreconcile them to enable them to be matched to the right transaction.
The process to un-reconcile a transaction is as follows:
- Select the “Show Reconciled Transactions” icon to show all entries.
- Select the transaction you would like to un-reconcile, at which point all transactions that you had reconciled with that transaction will also highlight.
- Press the orange un-reconcile icon and wait for the transactions to return to an unreconciled state
- Note: that if the transaction being unreconciled is due to a journal we have created, the applicable journal will be reversed.
An exception will come about where an entry has previously been entered, but then modified or deleted. AccountKit will highlight those entries in red and show them as unreconciled.
There are a number of things that happen when a transaction in Xero is modified or voided:
- If an entry was NOT reconciled in the first place, it'll either just update the transaction or remove it as required.
- If an entry was previously reconciled, a number of things can happen
- If it was a Xero generated entry, unreconciling will do just that, then remove the transaction from the list.
- If it was an AccountKit generated journal, unreconciling will first void the journal in Xero then un-reconcile the other entry.
The process to fix a modified entry is to un-reconcile it as follows:
- All that will usually be required, assuming that the change was warranted back in the original organisation, is for you to select the red entry to be unreconciled,
- Then select the un-reconcile button; This will either just void, or un-reconcile a transaction.
|Shared Elements (Eg. Action Menu)||Check out this link for various elements shared throughout the various toolsets.|
|Document Management System (DMS)||Learn how to connect and manage your DMS