Chapter 4: Connecting Xero to Avalara TrustFile

Getting started in Avalara TrustFile

Creating a new account in TrustFile is easy: go to trustfile.avalara.com. Enter your email and choose a password, then enter your company’s information.

After you’ve synced data from Xero, you’ll need to have this info on hand to finish configuring your TrustFile account:

• Sales tax registration numbers for each state where you have nexus
  
• US Federal Employer Identification Number (FEIN)
  

Set up the Xero connector in Avalara TrustFile to sync transactions

In TrustFile, click on Company Settings, then navigate to the Connectors tab. Click ‘Start Using the Xero Connector,’ and choose the ‘Starting Sync Date’. Choose a date that is the first day of a month in order to capture transactions for the entire month. It’s important to know that whatever date you choose, TrustFile will pick up all completed transactions after that date (in accordance with the Tax Basis — cash or accrual — chosen in the Xero setup) and include those transactions in the current return. In other words, if the user chooses a July 1 sync date and performs the sync on September 1, then all invoices from July and August will be included on the return due September 20. [1] Note that this is true for the first filing period only.

Click ‘Activate,’ then click ‘Authorize’ to enable Trustfile to sync with Xero. If you have multiple Xero companies, make sure you authorize the correct one.

Once authorized, your data will begin to sync. The time required for the initial sync is dependent on the number of transactions; in most cases, the sync is complete in a matter of minutes. As new transactions are added in Xero, it typically takes 5 to 10 minutes before they are synced to TrustFile.

Click ‘Show Logs’ to see details about what data has been synced and when. The number of ‘Sent orders’ should be consistent with your expectations based on the data in Xero. In other words, if today is September 5 and you selected August 1 as the sync date and you had 10 sales invoices generated between August 1 and August 31, then you would expect to see a message in the log that says ‘Sent 10 orders to TrustFile’.

Notes about Xero transactions imported into TrustFile

TrustFile imports three types of transactions:

1.Invoices

• When the ‘Sales Tax’ setting in Xero (Settings > General Settings > Financial Settings) is ‘Accruals Basis’, invoices are sent to TrustFile as soon as they are approved in Xero.
• When the ‘Sales Tax’ setting in Xero (Settings > General Settings > Financial Settings) is ‘Cash Basis’, invoices are sent to TrustFile as of the date they are marked as fully paid in Xero. (Partial payments are ignored).
  

2.Credit Notes: Refunds or reductions applied to prior invoices. These credits notes are treated the same way as Invoices, only with negative amounts.

3.Bank Transactions: TrustFile only receives Bank Transactions with included items of type sales or revenue, meaning they are coded to Account 400 (Sales) or Account 460 (Other Revenue). All spend and receive transactions coded to other accounts are ignored.