Where each Xero record lands
Connecting Xero means the claim starts from what the company actually paid, not from a rate card or a spreadsheet rebuilt at year end. Each kind of record feeds a different part of the claim, and each needs a person to confirm it.
| Xero record | What it becomes | Who confirms it |
|---|---|---|
| Payslips | Gross wages and super per person, the base of personnel cost | The director signs the hours that cost is applied to |
| Leave applications | Fewer available hours in the months taken | An owner or manager can record a day worked during leave |
| Bills by supplier | Contractor candidates | A person with permission to manage financials |
| Spend lines and journals | Other Expenditure groupings with a proposed basis | A person, with a written rationale |
| Expense accounts | Effective payroll tax and workers compensation rates | A person, by confirming the accounts |
| Fixed assets | Decline in value at the extent of R&D use, with an AI suggestion of how each asset is used | A person, asset by asset |
| Profit and loss and balance sheet | The company's accounts, as Xero reports them, for the Expert Reviewer to read beside the claim | Nobody: no claim figure comes from them |
In the final claim pack, personnel cost for employees comes from signed hours: R&D hours over each person's productive hours, applied to their payroll for the year. During the year the same formula runs on the hours Rand estimates from records, and the total is shown as Not confirmed or Partially confirmed until a director signs the year. Contractors are not priced from hours at all. A confirmed contractor is costed as the amount incurred with them in the year, excluding GST, times a confirmed R&D share, which can be split bill by bill. For a contractor who is an associate, only the amount actually paid counts.
For overheads, the ATO's guidance is that a company must use a reasonable basis of apportionment for each type of expenditure, and that a salary ratio fits costs driven by pay, such as super and payroll tax, not costs like rent. Rand follows that: each grouping gets a proposed basis that matches its cost driver, and a person accepts it, changes it or leaves it out.
The boundary
The figures Rand prepares from Xero are working figures for your company and its accountant to confirm. An Expert Reviewer reviews them, a director approves the claim pack, and Rand prepares the AusIndustry registration from it. Your accountant prepares the ATO schedule and handles the company's tax affairs.
Scopes, permissions and disconnecting
- Scopes. Rand asks for offline_access, accounting.reports.profitandloss.read, accounting.reports.balancesheet.read, accounting.invoices.read, accounting.banktransactions.read, accounting.manualjournals.read, accounting.settings.read, assets.read, payroll.employees.read, payroll.payruns.read and payroll.settings.read. Every data scope is a read scope. A company that signs up to Rand with Xero also grants Xero's identity scopes for sign in.
- Timing. The sync covers the claim year and runs daily.
- Missing permissions. If Xero rejects the bills, assets or balance sheet permission, payroll and the profit and loss report keep syncing and Rand shows a warning instead of failing. A dead connection or a missing payroll permission asks you to reconnect, because personnel cost depends on it.
- Disconnecting. Rand first revokes its authorisation on Xero's side, then switches the connection off.
For how payslips become personnel cost, and what to set up in Xero payroll first, read Xero payroll for R&D personnel costs. Hours come from your engineering tools, usually Jira and GitHub. The R&D Tax Incentive resources explain what counts as eligible expenditure.