Product updates 4 min read

Expense management for Xero: automated accounting meets company spend

Faustine Rohr-Lacoste

Xero is undeniably one of, if not the leading accounting software for small and growing businesses. Companies all over the world rely on this smart, intuitive software to make their accountants' lives easier and keep clean, accessible books. 

Many of these same businesses use Spendesk with very similar benefits. They want to digitize paper processes, eliminate data entry, and speed up the closing process. 

Which is a why a powerful expense management integration between the two makes so much sense. 

You can have both easy spend management and streamlined accounting, and never have to duplicate those boring tasks across platforms. Which is about as good as it gets. 

So let's take a little look under the hood and see how Xero and Spendesk fit together so well. Starting with a quick backstory. 

Our history with Xero expense management

Xero and Spendesk first integrated in September 2017. The first need was for Spendesk customers in the United Kingdom, for whom Xero is the staple tool. The software began life in New Zealand, and has quickly spread around the world, with the UK as an important market. 

One of its best strengths is its integrations with more than 600 third party apps (Paypal, Vend, Square, Shopify, FUTRLI, etc.). Xero users have come to expect easy integrations as a result. 
 
And while Spendesk has never planned to be an accounting software per se, we know that accountants use our tools on a daily basis. The only way to offer truly companies smooth spend management is to connect their other favorite tools with ours. 

Where accounting meets expenses

To understand why this integration is so important, we first need to revisit the basic company spending workflow:

  1. An employee seeks approval to spend (if necessary), then makes a transaction with their expense card, virtual card, supplier invoice, or requests reimbursement for out-of-pocket expenses.
  2. They upload their receipt or proof of purchase.
  3. Their manager reviews the purchase and approves it.
  4. The financial controller validates the purchase, pays the invoice, or transfers an expense reimbursement (depending on the case in question).
  5. At the end of the month, all payments are exported to the company's financial tools, along with receipts and any other supporting documentation.

So that's the classic case. And even though it's a vast improvement on traditional, paper-based processes, there are still a few shortcomings. 

Why a direct integration is best

Under the process above, the financial controller or accountant still has to "push" transactions to their accounting tools. Which leads to a few issues: 

  • If there are missing documents or errors, it can hold up the whole closing process.
  • Your accounting tool is always a step behind, waiting for payments to be pushed.
  • Updates made in your accounting tool aren't returned to your spend management software. The push usually only works one way.
  • There's usually a huge amount of re-formatting to do in your accounting tool. This can mean manual data entry for team members, just to enter every payment clearly in the ledger.

Overall, you're still viewing accounting as the end of a process. And any hold-ups or complications can leave your accountants hanging. 

Which is what makes fully-integrated accounting so much more exciting. 

Spendesk = expense management for Xero

The first and most important aspect is that Spendesk and Xero talk to each other directly. So Spendesk data can be sent to Xero with no extra formatting, instantly. 

Card payments are sent to Xero as bills with statements attached. This removes the need for any reconciliation work in Xero itself - that work is already done. 

In fact, this integration means you avoid double-dipping altogether. You assign the correct ledger codes in Spendesk, and they match up perfectly in Xero. (And most of the time, we assign these codes automatically!)

Another key point: Spendesk and Xero talk to each other with a two-way sync. This means that any updates made in Xero are reflected in Spendesk right away. So once again, you don't have to do the same work twice. 

A few examples of features:

  • Invoices are attached directly in Xero
  • VAT is calculated and synchronized automatically
  • You can create analytics codes to differentiate financial information (for consulting firms for example)
  • Bank feeds are updated automatically

And honestly, there's not much more to it! We've recently revamped this integration in a major way, and early reviews have been glowing:

"Xero connects perfectly with Spendesk, so that’s really helpful. There’s also a perfect sync for our back-office software. It’s really key for us as a finance team that we have that connection ready-made.”

- Tom Libbrecht, Silverfin

How to use Spendesk expenses with Xero

If you're already a Spendesk user, it couldn't be simpler to use the integration. Your Account Owner just needs to do the following:

  1. Log into Spendesk
  2. Head to the Accounting tab, find Xero, and click "Connect"
  3. Choose the accounts you wish to sync with Spendesk

spendesk-login-xero

And that's about it! If you have any problems along the way, just reach out to our Customer Success team. 

And if you're not yet a Spendesk user, talk to us!

Xero + Spendesk = better expense management

Streamlined processes are a great goal in themselves. But more concretely, here are some of the best reasons to set this integration up for yourself:

  • Massive time savings since there’s no more manual processing
  • Better budgeting for teams thanks to real time synchronization
  • Increased accuracy and an end to manual accounting errors (because there's no more manual work at all!)
  • Peace of mind and less end of month stress

And obviously, Spendesk complies with the General Data Protection Regulation (GDPR), guaranteeing users data protection - which applies to this integration too. As a Xero partner, Spendesk had to provide a detailed description of its software.

We discussed this point a lot with Xero. Their third party app integration policy is very tightly regulated to guarantee optimal quality. All of the apps in the Xero store get official certification, which assures there will be no user data loss or damage.

Every CFO knows how much easier life can be with a helping hand from software? This integration between Xero and Spendesk will make day-to-day life even easier for financial teams. Pretty soon they’ll only need three things: their bank account, accounting software... and Spendesk!

So take note: when it comes to managing your finances, soon you won’t be able to do without the winning combination of Xero and Spendesk.

Spendesk-request-a-demo 

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Faustine Rohr-Lacoste

Faustine is Head of Community at Spendesk. She is in charge of CFO Connect, a community of modern finance leaders.