Xero offers cloud-based accounting software built for small businesses. Employers can access their business finances anytime, from any internet-connected device – phone, tablet, or computer.
OnPay connects to your Xero account to make balancing your books easier. Each time you run payroll, OnPay can sync your payroll data to Xero automatically or manually.
Integration Setup
Step 1: In the "Company" menu, click "Payroll Integrations," then "Accounting." Select "Connect to Xero." A pop-up window will appear, asking you to enter your Xero login credentials.
Step 2: Choose whether you would like payroll to sync automatically after each payroll is approved (recommended) and if the data should come over in detail (recommended) or summary form. If the information is selected to come over in detail, then you will see the transactions separated by each employee in addition to the tax sweep and direct deposit sweep.
OnPay will send the payroll to the Bills section of Xero. Select if you prefer that the information gets manually approved (which goes into "Draft Bills",) if the payroll data should automatically go into "Awaiting Payments", or if the data should be marked as "Paid." OnPay suggests to initially send your transactions to "Draft Bills" to ensure the transactions look the way you expect in Xero. Transactions can be easily deleted from the "Draft Bills" section. This setting can be updated to Approved or Approved and Paid at any time.
If your company does not have controlled tips, please leave the "Controlled Tips Clearing Account" blank. If your company uses controlled tips, please click here for more details on accounting for controlled tips in your General Ledger.
Next, click on the empty boxes next to the payroll items. The options from your Chart of Accounts will appear in a drop-down list. Select the appropriate account for each item.
Please see the example mapping below. If you make a change to your Xero Chart of Accounts, you can click "Refresh Accounts" at the top of the screen to bring the changes into OnPay.
All payroll items must be mapped to the appropriate Xero account on each of the Tax Expenses, Tax Liability, Deductions, and Departments tabs. The Tracking tab is optional and allows for reports in Xero to be viewed by tracking categories. Click here for instructions on how to see your Wage Expenses by Pay Type instead of Department.
Please see below for example Account Types and the payroll items that would map to them:
|
Account Type |
Example Payroll Items Mapped to this Account Type |
|
Asset or Bank |
Checking Account |
|
Expense |
Employer FICA Taxes, Employer FUTA Taxes, Employer State Taxes, Salaries & Wages, or Employer contributions to 401(k) or any other benefit. |
|
Other Current Liability |
Employer Taxes Payable, Employee Taxes, Employee Deductions, or Imputed Wage Items, Tips Payable |
Step 3: To export a previously run payroll, navigate to the "Pay Run Exports" section. Then, locate the pay date you would like to send over to Xero and click the "Export" button.
You will receive a confirmation that the data has successfully synced with Xero.
Step 4: To view your data in Xero, navigate to the Xero Dashboard. If you selected the bill approval to be manual, you will see the payroll items under "Bills you need to pay." To approve these transactions, click on "Draft bills" then checkmark the items and hit "Approve".
If you selected the bill approval to approve, the items will show under "Awaiting payment".
If you selected the bill approval to approve and pay, the items will show under "Paid" bills.
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