Overview: Split accounts are used where users need to create new accounts that live in Active but would not want these accounts to be created in the clients source account system.
Please refer to the Glossary for definitions of key terms used in this article.
Overview
Users may need to set up a split account in a number of scenarios, some of these may include:
To split current/non-current balances in Active for the purposes of reporting but do not want these accounts set up in the clients source file
To track the changing account balances of a loan or hire purchase without creating extra source accounts in the clients source file
To allow for detailed categorisation in reporting.
How to create a split account
Navigate to the Accounts screen in your selected client and select the source you wish to create an account for in the dropdown.
To create a new split account, select the + New account.
The below screen will pop up for you to enter the account details. To ensure this account is a split account, use the dropdown to select the source account this split account belongs to.
Once done, press Save Source Account.
This account will now show in the list of source accounts.
You are now able to use this account in a journal. Any journals to the split account will be pushed back to the source account*** in the source system. Click Add Journal.
Tip: To create a split account linked to an existing source account in the Journals or Accounts screen, add an asterisk (*) after the account number when creating the account. The split account will be associated with the source account preceding the asterisk.
***WARNING:
Be very careful with this mechanism. See below:
1. How balancing journals are processed
When a balancing journal is formed, the system takes all the split accounts in Active L&R and exports the corresponding journal entries to their respective Xero source accounts in Xero.
Once the balancing journal has been exported, the balancing journal in Active and the individual journals that make up the balancing journal are hidden by the system. A fresh set of Trial Balance journals is then imported directly from Xero, which acts as the source of truth.
2. Why movements against split accounts cause an issue
If you record a movement against a split account and export it to Xero, the movement is posted to the corresponding source account in Xero. When the journals are subsequently reimported into Active, the balance appears against the original Xero source account rather than the split account. So you lose the figures against the split accounts in your reporting in Active Ledger.
3. Recommended approach
To avoid this issue, we recommend not posting actual movements or adjustments directly to split accounts. Instead, post these movements to the main Xero account and export them to Xero as usual.
Split accounts should primarily be used for presentation and reporting purposes, where no actual movement has occurred. For example, amounts can be reallocated from a Xero source account to split accounts to achieve the desired presentation in reports.
These presentation journals should not be marked for export. This ensures that:
Actual transactions and adjustments are posted to Xero and subsequently imported back into Active.
Presentation-only adjustments between split accounts are retained in Active for reporting purposes without affecting the underlying Xero file.