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This article will walk you through the process of accounting for Loyalty points and Gift Cards within the Vend to Xero integrated system from a bookkeeping / accounting point of view. We also provide detail on the specifics of the integration setup in relation to these features. If you need more help with general setup, please read our “How to setup proper Vend POS and Xero Integration” article first.
Or if you would like us to assist with your setup, please give us a call and we can complete the full integration for you. We are not only cloud integrators, but also bookkeepers and we know all process from the beginning to the end.
Accounting Journal Movements
The normal accounting journal movements in Xero will be:
- On accrual of loyalty points: Debit Loyalty Expense, Credit Loyalty Liability
- On redemption of loyalty points: Debit Loyalty Liability, Credit Sales.
These entries will all be handled automatically through the positing of the sales invoice to Xero which will occur upon closing the register in Vend ( if all integration settings are correct).
Account Mapping and other Vend Settings
After you have enabled Loyalty, go to the Xero integration page in Vend and make sure that the Liability Accounts are mapped to the correct Xero accounts:
You will also need to make sure you have a payment type of 'Gift Cards' set up if you are using gift cards or vouchers.
For further information on how loyalty actually works in Vend please see the Vend support page - Setting up Loyalty in Vend
Checking the Chart of Accounts in Xero
Before you turn on your loyalty or gift card functionality, please double check that your chart of accounts is setup properly in Xero. Go to your Chart of accounts in Xero.
Our tip: Whether your store is using a loyalty program or not, it is better to set up the loyalty accounts from the outset, so that if you ever decide to implement Loyalty it is ready to rock’n’roll.
Two accounts are required:
- Vend Loyalty Liability account to record all loyalty dollars accumulated by your clients on the Balance Sheet
- Loyalty Expense account to expense the loyalty dollars when used by your clients.
Xero Vend Loyalty Expense Account
Xero Vend Loyalty Business Liability
Account type: Current liability. Please choose the appropriate GST code for your store. Usually this will be BAS Excluded. Enable payments to this account.
Account type: Current Liability. Default tax code: BAS Excluded. Enable payments to this account.
Note: If you do not enable payments to the liability accounts, the system will still send invoices to Xero as per normal but they will be in Awaiting Payments for you to apply manual payment against Liability account later on.