In addition to allowing you to slice and dice your Client data, Xavier applies a number of its own data analysis techniques and presents the findings up as Insights...
# Bank Reconciliation
Xavier uses a combination of Xero's Bank Statement Report data, bank transactions and payments to provide an interactive view across all of an organisation's bank accounts. The format loosely follows Xero's Bank Reconciliation Report, distinguishing between outstanding payments, receipts and unreconciled bank statement lines.
Expanding one of these categories allows you to see transaction-level detail in a flexible grid view. From each record, you can click straight into Xero to start the reconciliation process. The grid allows you to quickly order by the oldest records (useful if you are approaching month end), and also see/filter/group the records that are in a "locked" period.
# Net Assets
The Net Assets figure is a calculated balance of all transactions with the Account Class of ASSET minus all transactions with the Account Class of LIABILITY, up the the reporting date. This figure is also available as a metric on the Client List and Practice Dashboard. Xero Account Classes are shown below:
# Cash Position
Foreign bank account balances are converted to the base currency to produce this number - use as a guideline only, where this is a factor, and see below for more info.
# Foreign Currency Bank Accounts
Xavier detects when a bank account is in a different currency to the base currency of the organisation, and displays accordingly. There's a toggle that allows you to view the reconciliation totals for a bank account in either the native currency of the bank account or the base currency of the organisation.
Xavier does not have access to Xero's exchange rates, so the base currency calculated balances for a foreign currency may not always totally match up to the report in Xero - use as a guideline only.
More about exchange rates in Xero can be found in their support documentation.
# All Bank Statements
You can also hit the All Statements button at the top of the insight to work in a full sandbox-style grid with all bank statement records, not just the unreconciled ones.
Xero guidance on bank reconciliation can be found here.
# Duplicate Contacts
The results shown in this Xavier insight are your Xero contacts that we’ve identified as potential duplicates. This can happen if you create a new contact during the process of inputting an invoice or similar, and miss the fact that the contact already exists.
Review these, you may dismiss any which aren't true duplicates, or clicking the name of the contact will take you to Xero to amend them. The transaction count should give a good indication of which contact has had more activity.
Xero guidance on merging contacts can be found here.
Each duplicate contact can be 'dismissed' - this means that Xavier will no longer count that combination of client names to be a potential duplicate. Dismissed items do not contribute to the Health Score. Any dismissed duplicates can be viewed by selecting dismissed from the filter at the top of the screen, where you can then review and undo any accidental dismissals.
# Multi-Coded Contacts
Each Invoice and Bank Transaction line item is assigned an Account Code and a Tax Code in Xero. The majority of the time, these codes should be consistent for a given supplier or customer.
It happens to be best of us though - sometimes these records are assigned the wrong codes, or coding evolves over time. We’ve crunched the numbers to find these potential mis-codings and you'll see them presented in this insight, with helpful links directly to Xero allowing you to amend these where needed.
Xero provides a dedicated mechanism for re-coding, and their support documentation on this is here.
# Selecting The Date Filters
The Multi-Coded Contacts insight allows you to specify two different date filters:
Active During: This is the period where you want to find contacts to assess. Xavier will find and evaluate contacts that have been active (i.e. they have transactions) during this time period. For example, this could be your reporting period of the previous month.
Check Transactions Since: Once Xavier finds the active contacts to evaluate, this date refers to how far back in time Xavier should look into each Contact's transaction history to compare account and tax codes and surface any inconsistencies. For example, if you know that you changed your accounts structure at the start of the year, it doesn't make sense to evaluate transaction history before the change, so set this date to be the 1st of January (or whenever you made the change).
# Narrowing The Scope
The Multi-Coded Contacts insight allows you to get really targeted with the data cleanup process, and quickly filter out any suggestions that don't make sense for your situation.
Revenue | Expense | All: Restrict the suggestions list to only transactions relating to Revenue OR Expenses.
Account | Tax | All: Restrict the suggestions list to only transactions Xavier has identified with Account Code anomalies, OR Tax Code anomalies.
# Understanding the Colour-Coding
Xavier adds colour to the transaction rows to provide a clear indication as to which transactions fall into the "Active During" period and which ones are historical:
If there is good reason for the different coding, then you can dismiss the multi-coded alert and it will not show again. Any dismissed alerts can be viewed by selecting dismissed from the filter at the top of the screen, where you can then review and undo any accidental dismissals. Dismissed items do not contribute to the Health Score.
This dismissal applies to a few levels below the contact, taking into account both direction (Payable/Receivable) and whether they are Tax Code or Account Code differences.
For example, you can dismiss an alert for a contact with differences in receivable account codes, and we won't raise any more alerts for additional receivable account codes placed against that contact, but you will still get an alert for that client if we detect multiple payable account code differences, or multiple receivable tax codes.
# Contact Defaults
Contacts in Xero can be setup with "default" account codes and tax types for sales and purchases. If set, Xero will use these to pre-populate the account code or tax type fields during bank statement reconciliation. For contacts that your client has a recurring relationship with (e.g. a supplier that bills monthly), setting these defaults in Xero can dramatically speed up the reconciliation process:
Figuring out which contacts are eligible for setting up these defaults can be time consuming. This Xavier system analyses each contact's transaction history and searches for contacts where either sales or purchase invoices have been consistently assigned the same account code or tax type, and presents these up to you in a handy list:
You can review the transaction history of these contacts and decide whether or not to apply Xavier's suggestion.
Clicking Set as default does what is says on the tin - Xavier will prompt you to confirm before setting the suggested code in Xero as the default for either Sales or Purchases:
Xero's support documentation on settings for Contacts is here.
If you think the suggested default is not suitable, you can dismiss it. Any dismissed suggestions can be viewed by selecting dismissed from the filter at the top of the screen, where you can then review and undo any accidental dismissals. Dismissed items do not contribute to the Health Score.
The dismissal covers the combination of contact name and the type of suggested account code; account code or tax type. If you dismiss a suggested account code default for a contact, for example, you will still be suggested potential default tax types if one becomes suitable.
# Dormant Accounts
This view identifies GL Accounts that have not had any transactional activity recorded against them from the "Dormant Since" date you supply.
You can review the transaction history of these accounts and decide whether or not to take action on Xavier's suggestion. The idea is to help you identify old account codes that could be cleaned up, either through archiving or deleting, for better reporting.
You can filter and sort to look at accounts with transactional history (activity) and also by Account Class. Xavier won't show you Xero System Accounts and certain other Accounts as they cannot be archived.
For each account suggested by Xavier, you can either archive it, or dismiss it. Archiving the suggestion makes the appropriate change in Xero. Dismissing the suggestion will hide it from the "Suggested" list, but you can always undo this from the "Dismissed" list if you want it back.
You can also follow the link to Xero's Chart of Accounts to restore an archived account or delete one. Read more on managing account codes in Xero.
Each account code can be 'dismissed' if you're not ready to take action and do not want Xavier to raise it again. Dismissed items do not contribute to the Health Score. Any dismissed account codes can be viewed by selecting dismissed from the filter at the top of the screen, where you can then review and undo any accidental dismissals.
# Corporation Tax
The Corporation Tax insight gives an estimate of the corporation tax accrued by a company for the current and previous financial years, based on UK tax rates and using the financial year-end dates in the Xero settings.
# Client-specific configuration
Reporting Codes are applied to all Accounts, and can be customised in Xero by your team. They are a great way of achieving reporting consistency across clients that have different chart of account configurations. But you only have visibility of Reporting Codes if you are a Xero Partner, and sometimes it is not feasible to configure these for every client you work with.
Xavier allows you to override the default corporation tax calculation for a client. By clicking on the cog beside an element of the corporation tax view you will see what is currently being used for that section of the calculation.
Clicking "change" allows you to specify individual account codes to either include or exclude, depending on the section:
Specifying account codes means that the default calculation will no longer be used for this client, and Xavier will instead use the account codes provided. Upon clicking Save, the corporation tax will be recalculated for current and previous years based on the new configuration.
You can remove account codes from the calculation at any time, and removing all of them will result in the calculation reverting back to using the Xavier defaults.
# Capital Allowances
The Capital Allowances section of the Corporation Tax insight uses the Fixed Assets register in Xero to look for registered assets purchased during the date period. It specifically looks for:
- Fixed Assets with a status of "Registered" (i.e. Draft won't count)
- Fixed Assets with a purchase date that falls within the start and end dates you've set at the top of the Corporation Tax view
# VAT Tracking
The VAT Tracking insight gives an estimate of the VAT accrued by a company for the current VAT period, and includes estimates for previous periods dating back to the end of the previous financial year. The financial year and VAT periods are based on the client's settings in Xero.
# Cash vs Accrual Schemes
In the UK, a company could be configured to report VAT to HMRC on a Cash basis or an Accrual basis. Xavier automatically detects this based on Xero settings and adjusts the VAT calculation accordingly.
# Flat Rate Scheme
Xavier will detect if a client is on a Flat Rate Scheme, but it has no way of knowing what VAT rate has been agreed with HMRC for the client. The first time you view the VAT Tracking insight, Xavier will prompt for the VAT rate to use if it detects the client is on a Flat Rate Scheme:
You can adjust this for a client at any time by clicking on Adjust Rate in the menu bar of the VAT view.
# Scheme Thresholds
For example, you'll get an alert at the top of the VAT insight if you exceed a threshold:
And similarly Xavier also warns you if you are approaching a threshold:
# Payment Detection
Xavier will try and detect if a previous period's accrued VAT has been paid to HMRC or not, by searching for reconciled bank transactions within 6 months of the end of the period, with:
- a GL Account with the Reporting Code of
- a payment amount within a 2% variance of the estimated amount for the period
If such a payment is found, the Payment Detected field will be set to "Yes". Clicking on this will take you straight through to the bank transaction in Xero.
# Fixed Assets
Fixed Assets are a somewhat separate part of the Xero system, which can lead to some inconsistencies. Xavier connects to the Fixed Assets register in Xero and compares it with the general accounting ledger to highlight where records may be out of sync.
# Fixed Asset Accounts
Xavier looks at general ledger Accounts that have an Account Type of FIXED, and then looks for mapped Asset Types in the Fixed Asset register. Accounts need to be selected as the Fixed Asset Account, Depreciation Expense Account or Accumulated Depreciation Account of at least one Asset Type to be considered "mapped".
Xavier then checks the balance of any unmapped Accounts - if any are non-zero then this should be considered a genuine issue that needs immediate attention.
# Draft Assets
Xavier searches the fixed asset register for draft assets and lists them here for convenience. This section is a good place to start if the asset types are not reconciling in the section above.
# Fixed Asset Account Reconciliation
This section cycles through all of the accounts in Xero's general ledger that are specified as the Fixed Asset Account in the Fixed Assets register. It compares their balance with the combined totals of the Purchase Price of all assets associated with it, up to the Reporting Date, and highlights any that don't match. You can expand each Asset type to compare transaction history of the Account with the Asset activity.
# Depreciation Account Reconciliation
Similar in logic to the Fixed Asset Account Reconciliation, this section cycles through all of the accounts in Xero's general ledger that are specified as the Accumulated Depreciation Account in the Fixed Assets register. It compares their balance with the combined totals of the "Depreciation Value" of all assets associated with it, up to the Reporting Date, and highlights any that don't match. The Depreciation Value is a calculation of the difference between the Purchase Price and Accounting Book Value of an asset.
# Depreciation Run
This simple check compares the Reporting Period specified at the top of the insight with the "Last Depreciation Date" in the Fixed Asset Register, and shows an error if they don't match.
# Aged Balances
The Aged Balances insight looks at aged Debtors and Creditors (i.e. old invoices) at a snapshot in time.
# Setting Parameters
- Reporting Date: this is the point in time that you want to evaluate your debtors and creditors at, based on invoice dates.
- Invoice Age: the age of the invoice in relation to the Reporting Date. For example, setting the Invoice Age to two months means Xavier will only look at invoices that are dated older than two months from the Reporting Date.
# Aged Receivables
This surfaces your debtors, old invoices for people that owe you money. You can see a count of old invoices at a glance and a sum of the total amount owed. Clicking on this card will expand to show the detail of each aged invoice, each with a link straight to Xero if needed.
# Aged Payables
This surfaces your creditors, old invoices for people that you owe money to. You can see a count of old invoices at a glance and a sum of the total amount you owe. Clicking on this card will expand to show the detail of each aged invoice, each with a link straight to Xero if needed.
# Average Debtor Days
This uses a common ratio-based method to provide an indication of the length of time it takes for your debtors to pay you. This is based on the total Receivable amount owed at the Reporting Date, and the gross revenue over the last 12 months up to the Reporting Date.
The check allows you to review all overpayments that still have remaining credit available at the time of the Reporting Date, by checking the dates of any allocations to make sure they are applicable. This is categorised into Overpayments relating to Suppliers and Customers.
# Activity Stats
Designed for accountancy firms utilising proposal tools such as GoProposal to determine pricing for their clients, the Activity Stats insight gives a breakdown of the key trading statistics of a company, with a focus on volume, e.g. number of bank transactions for the period. These figures can then be input directly into your proposal tool to quickly calculate pricing when a client is up for renewal.
By default, this insight calculates statistics for a rolling 12 month period, starting from the last complete month, and working back from there. However, you can select a date range and Xavier will do its best to segment your date range into monthly slots.
# Understanding Turnover
The Activity Stats insight uses the following logic to determine the Turnover calculation:
The NET value of all transactions in the selected date range that have an Account Type of either Revenue or Sales.
Note that the Account Type Other Income is not included in this calculation.
This gives you some flexibility in determining this Turnover figure, as the Account Type can be modified for each account in Xero.
Xero provide some documentation on working with Chart of Accounts.
# Historical Changes
Have you ever had that uncomfortable feeling that something in a previous period has changed after you've reported it to the board or to the tax authorities? All the accountants we know have run into this at some point. Everyone makes mistakes, and it can be quite easy for someone with Advisor privileges in Xero to create a record with the wrong journal date.
The tricky thing is tracking down these changes so they can be amended. Xavier allows you to identify exactly what was changed and when within seconds. Simply input the historical reporting period that you want to check, and the close date from which you expect no more transactions to have been logged for that period, and click Run Report.
Xavier queries the underlying journal transactions for the client, and looks for transactions that have a journal date within the historical period, but a created date of after the reporting close date.
You'll be able to jump straight to the offending transaction(s) in Xero from the results. And, in case you need to show someone else where it all went wrong, you can always export the results to PDF.
# Regular Suppliers
The Regular Suppliers insight is designed to analyse your client's payments to their suppliers over time and automatically detect issues. Our AI will look for months where the total amount paid is higher than normal for a supplier.
Clicking a supplier will show a chart of payments over time and highlight the periods where we have detected where there may be an issue. Clicking on a bar in the chart will explain the issue that we have found and show a summary of payments to the supplier in the chosen period. You may then choose to dismiss the alert or go through to Xero to investigate.
We are really excited about the possiblities here and we will be working hard to continue making this insight more powerful.
# VAT Return Checks
Xavier provides a set of checks that have been designed to quickly spot tax issues with respect to transaction data over a given filing period. Simply enter in the date range and the minimum amounts (more on those below) and hit Run Report to generate the checks. Expanding the card allows you to see these transactions, with a link directly to Xero to sort them out.
Each anomalous period can be 'dismissed' if you have reviewed the period and do not want Xavier to raise it again. The card for that supplier will not be removed from the view until all anomalous periods in the chart have been dismissed. Dismissed items do not contribute to the Health Score. Any dismissed periods can be viewed by selecting dismissed from the filter at the top of the screen, where you can then review and undo any accidental dismissals.
# Reconciliation Review
This uses the same logic as the Unreconciled Transactions insight to find unreconciled transactions for the date range you have supplied.
# Revenue Account Review
This check finds transactions that don't have an Account Class of REVENUE, but have been assigned as revenue Tax Type of OUTPUT2, RROUTPUT or ZERORATEDOUTPUT.
# Expense Account Review
This check finds expense transactions that have been assigned a Tax Type of INPUT2 (20% VAT on Expenses), with accounts that have Reporting Codes of EXP.ADM.ENT (Entertainment), EXP.ADM.PRI (Printing & Postage) or EXP.ADM.TRA (Travel International).
# Balance Sheet Review
This check finds ASSET, LIABILITY or EQUITY type transactions with a non-zero tax value, excluding Fixed Assets (account type FIXED) and Reporting Codes of LIA.CUR.ACC (income in advance) or ASS.CUR.REC.PRE (prepayments).
# Zero-Rated Review
This check finds transactions with a tax type of ZERORATEDINPUT with a net value above the minimum amount set by you in the report header (Zero Rated Min). The idea here is to ensure the client is claiming back VAT on as many high value items as possible.
# No-VAT Review
This check finds transactions with a tax type of NONE with a net value above the minimum amount set by you in the report header (No VAT Min).
# Multi-coded Contacts
The same as the Multi-Coded Contacts insight, but looking at contacts that have transactions in the reporting period specified.
# Sales Analysis
This new feature allows you to review your client's revenue for a given period, breaking it down into who their key customers are and how much revenue each of these customers generate.
# Accumulated Revenue
This chart demonstrates how much of your client's revenue comes from a smaller proportion of customers. The chart area is cumulative; the steeper the curve is at the beginning, the more revenue is generated by that segment. The curve will typically then level off, as later segments contribute less to the revenue total.
Revenue-generating contacts are listed in the grid below the chart, grouped by segment, with an indication of how reliant the client is on that contact. By identifying these key revenue generating customers, you can give clients informed advice as to where they should be focusing their time.
This grid lists a few key stats:
- Customer is the contact name, and clicking on it will link to the contact in Xero
- Revenue is the amount of revenue generated by that customer during the period
- Transactions is the number of transactions generated by that customer during the period
- Reliance is the percentage of total revenue which comes from that customer in the period
- Debtor Days is a calculation of the time the customer typically takes to pay
# Average Monthly Revenue
Xavier then provides two key stats for the client; average monthly revenue for the period, and the average monthly revenue per customer for the period.