Overview

The purpose of the Inter-Entity Loan Linker is to facilitate the reconciliation of your inter-entity loan accounts across multiple Xero organisations, ensuring that they always remain in balance and streamlining the data entry between files.

Here's a short video to give you a feel for how the Inter-entity Loan Tool works, but otherwise check out the Deep Dive Training Webinar - Have the whole team watch this to get them up to speed in no time!

Before you start

Practice Settings

Review your practice settings to ensure the default settings for are how you like to process the various  journals into Xero.

1. Show journal on cash basis reports
   • This simply ensure all journals have the Xero journal option to show journals on cash basis reports. This can be overwritten on a per schedule basis within each schedules settings.
     
     
2. Show user name in journal narrations
   • Since the connection to Xero is generic in nature, when a journal is posted into Xero, you don't know who processed the entry as it will say in it's history "posted via API by AccountKit".  Turning this on ensures the journal narration also includes the user name of who posted the entries from AccountKit. 
   • We recommend that this is left on.

Prepare Xero organisations

For the two Xero Organisations to be linked together

1. 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.
2. 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.

The Inter-entity loan list page

Area		Description
1	Create new Inter-Entity Loan	Select the icon to start the process of creating a brand Inter-entity loan schedule.
2	Balance at date	This option simply lets you check balances at specific dates. Eg. end of the month or quarter.
3	Views	Head to Menus & Shared elements > Views & Filters for more details.
4	Group By, Filter, View Select,  Actions.	You can see an overview of these items within the shared elements section of the Help Centre. What is unique to Equipment Finance is the 3 dot menu that gives you access to a variety of export options. Actions Menu Export List Summary Report Summary Movement Report Cashflow Commitments Repor
5	The list...	This is a snapshot of all current Inter-Entity Loans being reconciled within your practice and their current status. Client Entity 1 & 2 - Shows which two client entities are being reconciled along with the display name. Xero Icon - Shows the status of the connected Xero file   Xero connection is ok ok The Xero data is still being downloaded, so you can't do much with this until it's done.   The Xero org has been disconnected; Select the red Xero icon to be given the ability to reconnect it. It will then turn orange and then eventually blue. Balance - Shows the current balance of the inter-entity loans in both entities along with any other relevant details, such as the number of transactions to be reconciled. Status - The icon demonstrates a quick visual of whether a set of inter-entity loans are in balance. This means that the loans are in balance, even if there are transactions to reconcile. This means that the loans are out of balance so some transactions need reconciling and posting to the opposing entity. even if there are transactions to reconcile. You can select this icon to enter the reconciliation page. Description - Gives a short description of the loan. Helpful if there are multiple inter-entity loans within an organisation, such as multiple Div7a loans. You can also select this to enter the reconciliation page. Actions - See the next section.
6	Actions Column	These are the actions available to you for each equipment finance line.   Summary - Select this to take you to the summary tab for the family group. Link - Allows you to link a document from your DMS directly to the schedule. Actions Menu Export Delete - Select this to permanently delete the inter-entity loan. Note that this doesn't delete any transactions, just the reconciliation schedule. Archive / Unarchive - Select this to temporarily put this loan out of sight. To get it back, tick the "Show archived" at the bottom of the page, select the 3 dots and "Unarchive".

Legacy User Interface 

Tools in Brief

The Inter-Entity Loan List Page

Common Settings - For both Legacy & New UI

Setting up your first Inter-entity loan (IEL)

1. Set the start date you would like to start reconciling from; (we will check balances before commencing to ensure you're balanced before commencing.
   
   
2. Select the two client entities you intend to reconcile with. (Note that only clients connected to Xero will show up in these lists.)
   
   
3. Go through both entities and add in the accounts you intend to reconcile between.
   
   
4. 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
     
5. Then press [SAVE] to finalise the setup and get ready to start reconciling.

 

The Summary Tab Layout

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The purpose of the summary tab is to give you a quick view of all loans within a group at a glance, with an easy avenue to then jump to the specific loans you want to review.

Input Field		Description
1	Family Group Select	Selecting here will enable you to switch between family groups
2	Compare Balance at	Simply enables you to show balances at specific points in time. Eg. end of month, quarter or financial year. Great for when you finalising a period and just want a quick view of the loan balances.
3	Summary Tab	Access the summary tab at any point to see the overview of all loans within the group. Select the icon to open the Quick search to quickly jump to another loan (in the event you have more than 5)
4	Entity List	Here you will see by default all entities with loans along the x & y axis. If you want to see other entities within the group (for example if you wish to setup a new loan within the group), select the "Show entities with no loans" option. Otherwise you have the normal Xero icon which you can select to show further details about the Xero connection. See the link for more details around how the integration works.
5	The Grid	The grid shows each of the loan balances with the following statuses. If you select a cell with a balance, it will expand to show other loans within the group which total up to net balance shown. If you select one of those balances, it will go to the selected loan for review. Cell Statuses Out of balance In balance Create new loan (only available where both entities are connected to Xero) No ability to create loan (where one or both entities are not connected to Xero)

 

Review your practice settings - To ensure default settings fit with execution

​

1. Show journal on cash basis reports
   • This simply ensure all journals have the Xero journal option to show journals on cash basis reports. This can be overwritten on a per schedule basis within each schedules settings.
     
     
2. Show user name in journal narrations
   • Since the connection to Xero is generic in nature, when a journal is posted into Xero, you don't know who processed the entry as it will say in it's history "posted via API by AccountKit".  Turning this on ensures the journal narration also includes the user name of who posted the entries from AccountKit. 
   • We recommend that this is left on.

Prepare the entities you plan to reconcile - Linking 2 Xero organisations together

1. 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.
2. 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.

Setting up your first Inter-entity loan (IEL)

1. Set the start date you would like to start reconciling from; (we will check balances before commencing to ensure you're balanced before commencing.
   
   
2. Select the two client entities you intend to reconcile with. (Note that only clients connected to Xero will show up in these lists.)
   
   
3. Go through both entities and add in the accounts you intend to reconcile between.
   
   
4. 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
     
     
     
5. Then press [SAVE] to finalise the setup and get ready to start reconciling.

 

The Summary Tab Layout

---

The purpose of the summary tab is to give you a quick view of all loans within a group at a glance, with an easy avenue to then jump to the specific loans you want to review.

Input Field		Description
1	Family Group Select	Selecting here will enable you to switch between family groups
2	Compare Balance at	Simply enables you to show balances at specific points in time. Eg. end of month, quarter or financial year. Great for when you finalising a period and just want a quick view of the loan balances.
3	Summary Tab	Access the summary tab at any point to see the overview of all loans within the group. Select the icon to open the Quick search to quickly jump to another loan (in the event you have more than 5)
4	Entity List	Here you will see by default all entities with loans along the x & y axis. If you want to see other entities within the group (for example if you wish to setup a new loan within the group), select the "Show entities with no loans" option. Otherwise you have the normal Xero icon which you can select to show further details about the Xero connection. See the link for more details around how the integration works.
5	The Grid	The grid shows each of the loan balances with the following statuses. If you select a cell with a balance, it will expand to show other loans within the group which total up to net balance shown. If you select one of those balances, it will go to the selected loan for review. Cell Statuses Out of balance In balance Create new loan (only available where both entities are connected to Xero) No ability to create loan (where one or both entities are not connected to Xero)

 

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.

1. Go through and select the transactions you can match on the left and right columns as follows
   
   • Select each transaction one by one with a left mouse click
     
   • Select multiple transactions by left select and dragging with your mouse.
     
   • Filter for specific transactions by amount / narration, then bulk select.
     
   • Auto-match transactions
     
2. 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.
   
   
3. Press the reconcile tick to reconcile and hide the 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.

1. You can only post from one entity to another per entry, so select those that you would next like to reconcile on the left or ride side.
   • HINTS & TIPS
   • Every line selected will create a separate journal so that we have a one-to-one relationship between reconciled entries, rather than a net figure for multiple selected lines. In Xero, simply filter by narration "Inter Entity Loan" and archive them to get them out of sight.
     
     
2. 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.
   
   
3. 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", or just leave the default entry.
   • Date: Identify the date you would like to post the journal; By default, the date of the transaction is selected; We recommend you leave this as is.
   • 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.
4. 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 the status indicator will turn into a green tick indicating that there's is sufficient information to post a journal and the [POST] button will enable.
     • If you have multiple transactions selected, once you have the green tick on the first journal, you will have another option become available to copy the coding to the other selected transactions.
     • The way the copy coding works is:
       • If you copy a single coded transaction to:
         • Other single line entries, it will apply the same account code, description, tax code and amount to all other transactions ready for posting.
         • A multi-line entry, it will copy the same details, but you will need to set the amounts.
       • If you copy a multi-lined transaction to:
         • Other multi-line entries for the same amount and number of lines, it will apply the same account code, description, tax code and amounts to match the initial entry.
         • Other multi-line entries with a different amount or number of lines, it will do the same, but repeat as required; You will need to update the amounts.
         • A single line entry will just copy the details for the first line of the initial multi-line entry and apply the full amount.
   • With the [POST] button enabled, you will now be able to process the journals; The process now will:
     • Confirm as each journal is posted;
     • Complete a finalisation process to update the transaction list and associated inter-entity loans.
       
       
5. Now work your way down the unreconciled items on the right side until all entries are completed. 
   
   
6. Once both columns are empty, you are then complete. 

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 matching 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 voided.

Fixing exceptions

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.

Other useful information

Audit History

It's important to know who are reconciling accounts and creating entries within our accounting records. AccountKit has two ways of capturing this:

1. Within Xero
   • The journal posted from AccountKit into Xero will have the user name appended to the memo/description. For the date and time that it was posted, simply review the "History & Notes" section within Xero at the bottom of the transaction.
     
   • This setting can be turned off within Practice Settings -> Tool Settings & Defaults -> Inter-Entity Loan
2. Within AccountKit
   • If you mouseover a reconciled transaction and select the clock icon  you will have a tooltip appear identifying the user and date stamp for any transactions that have been reconciled or journal posted.
     

Related Links