How to automate accruals and prepayments in Xero

Xero is brilliant at bookkeeping, but it doesn't manage accruals, prepayments or deferred income for you. Most teams bridge that gap with spreadsheets and manual journals — which is slow, error-prone and painful to review. Here's how to automate the whole cycle.

What "automated" actually looks like

1. Connect once. Authorise a live connection to one or many Xero organisations.
2. Classify your nominal codes. Tell the system which balance-sheet codes represent prepayments, accruals and deferred income — once per entity.
3. Auto-build the register. Every invoice or bill posted to those codes becomes a schedule automatically, with a sensible default release period you can tweak.
4. Post journals on schedule. Monthly release/accrual journals post straight back to Xero — automatically, or behind a two-person approval for control.
5. Reconcile continuously. The register is checked against the live Xero balance per code, so variances surface immediately instead of at year-end.

The controls that matter

Automation shouldn't mean losing oversight. Look for:

• Approval workflows so journals can require a reviewer before they post.
• A full audit trail — every create, amend, post and approval logged with before/after detail.
• Recurring accrual handling that accrues and reverses each period without manual effort.
• A 12-month forecast so you can see the future P&L impact of today's balances.

The payoff

Practices that automate accruals and prepayments typically cut hours off every close, remove a whole class of rekeying errors, and hand reviewers a clean, evidence-backed pack.

How WorkWithLottie does it

WorkWithLottie was built for exactly this: it reads your Xero data live, builds and maintains the schedules, posts the journals (with optional approval), reconciles to Xero, and produces branded reports — across your whole portfolio of entities.

Ready to see it on your own ledger? Start a free trial and connect Xero in minutes.