Introduction
At Summ, we know how important it is for a small business owner, an SMSF or even an Accountant to have a product that integrates seamlessly with Xero. We built our Xero integration so that you can summarize daily trade activities into accounting journals within Xero. This will help you keep track of all of your crypto-related finances and help you understand sources of revenue, losses, and expenses. We’ve made the integration customizable so that your account mappings can be tailored to match the way you manage your bookkeeping.
How to get started with our Xero integration
So, you can now integrate your Summ records with your Xero account by following the below steps!
Step 1:
In order to confirm your account integration, you must allow the Summ app to upload Manual Journals on your behalf by authorizing this action in Xero. To do this, navigate to the ‘Accounting Integrations’ tab in the Summ platform and then select "Connect to Xero."
Step 2:
Next, you’ll have to organize your account mapping. An ‘account mapping’ is basically a way to tell the Summ app what particular account to increase and/or decrease in certain situations. To make things easier, we’ve outlined the accounts that need to be mapped and what they should relate to below:
The ‘Cash’ account: This should be the account that decreases when purchasing crypto with fiat currency and increases when purchasing fiat using cryptocurrency.
Example 1: You purchase $1000 AUD worth of ETH in March 2022. Your ‘Cash’ account would decrease by a value of $1000 AUD.
Example 2: You sell 1 ETH in April 2022 for the value of $3000 AUD. Your ‘Cash’ account would increase by a value of $3000 AUD.
The ‘Fee’ account: This should be a contra account that will track any fees that have been paid. As more fees are paid, the value in this account will increase.
Example: You transfer 1 BTC from your Binance account to your MetaMask wallet. To do so, you have to pay a fee worth $25 AUD. Your ‘Fee’ account would show an increase of $25 AUD.
‘Realized gain’/’Realized loss’ accounts: These accounts should be contra accounts that absorb the increase and/or decrease in the value of crypto assets you hold before they are disposed of. These accounts give you a method to calculate the gains or losses on your different crypto holdings. Currently, any losses are calculated using the First In First Out (FIFO) method.
Example: You hold 10 ETH in your MetaMask account, which is valued at $30,000 AUD in March 2022. You continue to hold your 10 ETH, but the value of your holdings drops to $20,000 AUD in May 2022. If you generate a manual journal at this time, it will show a decrease in value of $10,000 AUD.
Step 3:
Once you have completed your account mapping, you should choose your rollup settings and if you want to allow transactions with warnings to sync.
Rollup Settings - Choose whether you want us to rollup all transactions in the selected period into a single journal entry.
Allow transactions with warnings to sync - If turned off, all warnings must be resolved on a given transaction before it can be synced to Xero
Step 4:
Step 5:
Navigate to your Xero tenant dashboard, and click on ‘Accounting’, then ‘Manual Journals’ (found under the ‘Advanced’ section). Click on ‘Drafts’ and you will find the Manual Journals uploaded by Summ Our integration is built so that we generate a manual journal for every day you make a crypto transaction.
Note: The Xero integration doesn’t currently support updating transactions. Please make sure that your transaction history is reconciled, or else you may have to delete your past journals and re-upload them if you edit your transaction history.
A visual representation of how our Xero Integration works
Frequently Asked Questions
How do I disconnect from Xero?
Click the “Disconnect from Xero” button or Clear all data from your account
What doesn’t your integration do?
It does not upload the actual tax settings, it also only works using a FIFO inventory method
What type of Xero do you integrate with?
Currently, we integrate with Xero blue (for business). Xero XPM and Xero Tax integration are not available in Summ.
How do I re-sync with Xero after I have already synced once?
Simply click the “Sync Accounts” button and it will import any transactions since the last sync date.
If you have a client who has reconciled their transactions incorrectly, synced this data to Xero, and added it to the journal, the steps to take to remove these transactions are as follows:
Delete all crypto data from Xero
Disconnect from Xero on the app
Connect to Xero again
Fill in the mapping and click ‘sync’