Click Dealer to Xero Reconciliation Checklist

Why reconcile every month

Click Dealer knows what happened to each car. Xero knows what happened to the money. If the two are only compared at the year end, a missing part-exchange or a sale imported twice can sit in the figures for months – distorting your profit per vehicle, your stock value and, most expensively, your VAT returns.

A short reconciliation at each month end catches those differences while the deals are still fresh. It also means the VAT return is built on figures that have already been checked, rather than checked after it has gone to HMRC.

What to take from Click Dealer first

Before you start, export the reports for the month you are closing, so you are working from a fixed set of figures:

vehicle sales for the month, showing the sale price, any part-exchange and whether each car was sold under the margin scheme or with VAT;
vehicle purchases for the month, including part-exchanges taken in;
the closing stock list at the last day of the month, with the cost of each vehicle;
any deposits taken and finance company settlements due.

Bring these into Xero by file import rather than typing them in. Under Making Tax Digital for VAT, CSV import and export count as a digital link; re-keying and copy-and-paste do not.

The month-end checklist

Every sale is in Xero onceEach vehicle sold in Click Dealer has one sales invoice in Xero with the same date, price and registration. Look for sales missing from Xero and for anything imported twice.
The VAT treatment matchesCars sold under the margin scheme in Click Dealer are margin scheme sales in Xero, and VAT-qualifying cars are standard-rated in both. A mismatch here goes straight into the VAT return.
Every purchase is in XeroEach vehicle bought appears in Xero at the price on the purchase invoice. Check whether the invoice showed VAT – if it did, the car cannot be sold under the margin scheme later.
Part-exchanges are recorded on both sidesThe part-exchange value forms part of the selling price of the car sold and is the purchase price of the car taken in. Both systems should use the same figure.
Closing stock agreesThe total of the Click Dealer stock list equals the stock balance in Xero. If it doesn't, list the differences car by car rather than posting a balancing figure.
Preparation costs are treated consistentlyRepairs, valeting and parts can be included in the cost of stock in your accounts, but they are never added to the purchase price for margin scheme VAT. Decide where they sit and keep it the same every month.
Finance payouts and deposits are matchedMoney received from finance companies is matched to the sale it relates to, and deposits are held against the deal until the car is sold.
The bank is reconciledEvery bank line in Xero is reconciled to the statement, so nothing is waiting in the bank feed that should be in the figures.
VAT is checked, then the period is lockedMargin scheme VAT is one-sixth of each positive margin; standard-rated sales carry 20%. Compare the VAT in Xero with the Click Dealer reports, then set a lock date in Xero so the reconciled month can't change.

Common differences and what usually causes them

What you see	Usual cause
Stock in Xero higher than Click Dealer	Cars sold in Click Dealer but not invoiced in Xero, or a purchase imported twice.
Stock in Xero lower than Click Dealer	Purchases not yet entered, or part-exchanges missing from Xero.
Sales agree but VAT doesn't	A car's VAT treatment differs between the systems, or a loss-making margin sale has been netted against profitable ones.
Profit per car looks too high	Preparation costs sitting in overheads in one month and in stock in another.
Bank won't reconcile	Finance company settlements received as one payment covering several deals.

Where we come in

Some dealers run this checklist themselves and send it to us each quarter; others ask us to do it every month. Either way, the aim is the same – figures in Xero that agree with Click Dealer, so the VAT return and the year-end accounts need no surprises.