XBert Type: Standard
Accounting Software: Xero
Country Restriction: All supported countries
Risk Type: Data Quality Risk
Business Function: Sales
Overview
This XBert checks how your income (money-in) transactions are coded. When a payment from a contact is allocated to a different income account than the one you almost always use for that same contact, XBert flags it for a quick review. Catching these before reporting keeps your income accounts, sales tax and financial reports accurate.
What it does
This XBert:
Looks at receive-money (income) bank transactions that have already been coded to an account.
Builds a picture of how each contact is normally coded, using your own past transactions for that contact.
Flags a transaction when its account does not match the account that contact is consistently coded to, and shows you the account it would have expected.
How it works
XBert only raises this alert when it is confident the coding looks wrong, so it is deliberately careful about when it fires:
It only looks at income transactions that have already been allocated to an account. Transactions that are still uncoded are never flagged, and XBert never codes a transaction for you.
It only fires when a contact has a clear, settled pattern: that contact has been coded several times before (at least eight) and, up to now, always to the same income account. If a contact's coding has been mixed or inconsistent, XBert stays quiet.
It then fires when the latest transaction for that contact is coded to a different account than the established one.
To avoid false alarms, XBert deliberately ignores some situations:
Very small transactions (under $5) are skipped as not worth flagging.
Genuine, deliberate changes to your chart of accounts are not flagged. If several different contacts are all moved from one account to another around the same time, XBert recognises this as an intentional reclassification rather than a mistake.
A deliberate bulk re-code of a single contact (where you intentionally move many of that contact's transactions to a new account at once) is also recognised and left alone.
If the account that contact was usually coded to has since been archived or renamed, XBert holds back rather than guessing.
Example/Use Case
Every month for the past two years, income received from Bob's Plumbing has been coded to "Local Sales". This month a $4,200 payment from Bob's Plumbing is coded to "Overseas Sales" by mistake. Because "Overseas Sales" has a different tax treatment, the error would misstate the tax owed and your sales figures. XBert flags the transaction, shows that it expected "Local Sales", and the bookkeeper recodes it back to "Local Sales" before the next tax return is prepared.
Accounting software
This XBert runs on:
Xero
Which countries it supports
All supported countries. There is no country restriction on this XBert.
Processes
This XBert falls under the Sales (AR) business area.
To resolve it:
Open the flagged income transaction and compare the account it was coded to with the account XBert expected for that contact.
Check whether the new account is correct. Sometimes a contact genuinely starts earning income that belongs in a different account.
If the coding is wrong, recode the transaction to the correct income account.
If the new account is intentional, no change is needed. As this becomes the contact's normal coding, XBert will stop flagging it.
Once you have reviewed and corrected the transaction, mark the XBert as resolved.