We sought advice from several accountants who specialise in the automotive industry and are familiar with workshop management systems that integrate with Xero.
Recommendations 📋
Some workshop management systems support head and sub-accounts, commonly used for Capricorn. However, accountants & bookkeepers typically advise against using them, even when available, to simplify reconciliations between the supplier and the buying group's monthly statement.
Best Practice in Auxo Workshop 🛠️
Process orders under specific supplier accounts: In Auxo Workshop, we recommend processing all orders under the specific account of the supplier you are ordering from. This makes reconciliation easier in Xero.
Identify Capricorn suppliers: To help identify suppliers linked to Capricorn, you can add -CAP at the end of the supplier's name. This will make it easier to distinguish these suppliers in your records.
Best Practice in Xero 📊
Use Xero's Group feature: The Xero Group feature will be helpful in Xero as it can be used to group the 'Capricorn' suppliers together. Xero explain how to use this feature here: Xero - Create and Edit Contact Groups
Reconcile each supplier individually:
In Xero, reconcile supplier bills against the Capricorn statement.
Match each suppliers sub-total on the Capricorn statement.
If there are any differences, they can easily be narrowed down to the supplier in question, usually due to a missing bill or one that was miskeyed.
📝 Note: This method assumes that all purchases from a supplier linked to Capricorn are purchased through the Capricorn account.
By following these best practices, you can ensure a smoother and more efficient Capricorn reconciliation process in Xero. If you have any questions or need further assistance, feel free to reach out! 😊