Let's take a look at what the figures in your Sales Report mean, for example, the top revenue figure "Total Revenue From Visits" - what does it actually include? We'll also learn how these figures go across to Xero for those of you who have your Simple Salon account connected to your Xero account.
Here's an example of the Sales Report, located via Admin > Reporting > Report List.
What is and isn't included in the top revenue figure "Total Revenue From Visits"?
"On Account" service purchases:
Yes - if a visit is purchased using the "On Account" payment method, it is included in the "Total Revenue From Visits". It is then removed in the Total Revenue Summary with Corrections section as a negative value under "Total 'On Account' Purchases".
Gift Voucher service purchases:
No - this is included in the Total Revenue Summary with Corrections section, under "Total Gift Vouchers Purchased".
Paying off accounts:
No - this is included in the Total Revenue Summary with Corrections section, under "Total Paid Onto Accounts".
How we treat Accounts in Xero
Account balances are treated as a LIABILITY, like a Gift Voucher: Client has a positive account balance. eg. if you're taking deposits, and the client uses that account balance on a purchase later. When you receive payment, it reduces your liability to that client.
Therefore, your Xero account for Account payments needs to be a Liability account. If you are using it for negative account balances, then the account will always be negative (so it will essentially end up as an asset).
Here's how the different Gift Voucher/On Account purchases/redemption's come across to Xero:
"On Account" Purchases:
- as an "On Account" payment method line
- as a negative value (ie. reducing the liability to the client)
- recorded under the Xero account assigned to the "On Account" payment method in Simple Salon
Paying money onto accounts:
- as a "Total Paid Onto Accounts" line
- as a positive value (ie. increasing the liability to the client)
- recorded under the Xero account assigned to the "On Account" payment method in Simple Salon
Gift Voucher Purchases:
- as a "Gift Vouchers Purchased" line
- as a positive value (ie. increasing the liability)
- recorded under the Xero account assigned to the "Gift Voucher" payment method in Simple Salon
Redeeming a Gift Voucher:
- as a "Gift Vouchers Purchased" line
- as a negative value (ie. reducing the liability)
- recorded under the Xero account assigned to the "Gift Voucher" payment method in Simple Salon
NOTE: If no Xero account is selected for individual payment methods, then the lines are recorded under the Xero account assigned to the "Default Liability Account" in Simple Salon's Xero settings screen.
Does the purchase and redemption of Gift Vouchers, send the information through to Xero according to the ATO ruling?
Yes - this link relates to how to charge GST on vouchers. This is how it works in Simple Salon's Xero invoice, which matches the ATO's explanation:
- on the day the voucher is purchased:
- the Xero line for "Gift Vouchers Purchased" goes to the Liability account (as above) - it is not recorded against a Xero Sales account
- no GST is charged on the day of purchase - the Xero "Gift Vouchers Purchased" line does not include any tax
- on the day the voucher is redeemed:
- the GST is charged directly on the products and/or services
- that GST amount is reflected in the "Products Purchased" and "Visits Purchased" total lines sent to Xero
If you have any questions, please send them to us via the Submit a Request option in your Help & Support page.