How to Set Up Accrued Transactions with DEAR and Xero
Although it may seem like a complicated and confusing process, setting up accrued accounts is a great way of organising your purchase transactions and sending your money where it needs to go. In this latest guide, we’ll take you through the process of setting up accrued transactions using DEAR and Xero.
The first thing you’ll need to do is make sure you’ve enabled accrued transactions within your settings. If not, this process won’t be available. Once enabled, you’ll need to enable two accounts for Goods Received Not Invoiced (GRNI) and Goods Invoiced Not Received (GINR).
If you don’t have any accounts that have been set up ready to be added, you’ll need to complete these within your Xero account before you can begin. When adding a new account, you can choose the account type, create a unique code, and give a description. In this case you’ll use either GRNI or GINR. VAT rates can also be added from here.
Once you’ve gone back onto your DEAR dashboard, you’ll need to go to Reference Books in your settings. Click on Chart of Accounts and you’ll be able to load the information straight from Xero. From there, you’ll be able to go back to enabling your accrued transactions and select which account you what to use for each option.
When creating your purchase transactions, the account that you use determines which account settings you use. For instance, if you want GRNI, then you’ll want to select Stock First. For GINR, Inventory First is the option you should take. For more information on purchase transactions, watch our video or read our blog for how to process your purchases.
After you’ve authorised your order and the stock received (following the Stock First process), your GNRI account will be credited with the total cost of the product purchased and the quantity bought. In this case, 5 products worth £50 were purchased, which is reflected in the £250 which has been debited from the inventory account and credited the GRNI account.
By authorising the invoice, corporation tax will automatically be taken off the amount credited – this is because you will have already set the tax rate in Xero when you created the account. The money from the sale will then be credited to your accounts payable.
For the Invoice First process, you can clone your Stock First order to save you putting all the information in again manually. Once the invoice is authorised, your GINR account will be debited and your accounts payable will be credited. As you progress onto your stock received, this will debit your inventory account and credit your GINR account, as you’ve received the stock on the system.
To see this process step-by-step, watch our YouTube video below. For more guides on utilising Xero and DEAR effectively for your business, see our YouTube channel. Ready to upgrade your business systems? Get in touch with our team today.