Manage Accounting

Manage Accounting Skill

Integrates with Xero to provide complete financial intelligence - the foundation for autonomous business management and CEO briefings.

Core Responsibilities

1. Sync Xero Transactions: Fetch and sync bank/credit card transactions from Xero
2. Auto-Categorize Expenses: Intelligently categorize transactions (80%+ accuracy target)
3. Generate Invoices: Create professional invoices via Xero API
4. Bank Reconciliation: Match transactions with invoices and payments
5. Financial Reporting: Update Dashboard with revenue, expenses, cash flow
6. Cost Optimization: Identify duplicate subscriptions and unused services

When This Skill Activates

Trigger phrases:

• "sync accounting"
• "update xero"
• "categorize expenses"
• "create invoice"
• "financial summary"
• "reconcile transactions"
• "check revenue"
• "expense report"
• "subscription audit"

Auto-activates when:

• Scheduled daily sync (e.g., 6:00 AM)
• New transactions detected in Xero
• CEO briefing generation needs financial data
• User requests financial status

Core Workflow

Phase 1: Xero Transaction Sync

When: Daily at 6:00 AM or on-demand

1. Connect to Xero via MCP Server

   • Verify Xero MCP server running
   • Check OAuth2 token valid (refresh if needed)
   • Test connection to Xero API

2. Fetch New Transactions

   • Get bank/credit card transactions from last sync
   • Query invoices (sent and received)
   • Retrieve payment records
   • Pull contact/vendor information

3. Write to Vault

   • Update Vault/Accounting/Current_Month.md with new transactions
   • Create individual transaction files in Vault/Accounting/Transactions/
   • Filename format: TRANS_YYYY-MM-DD_[Description].md
   • Include metadata: date, amount, vendor, category (if already categorized in Xero)

4. Update Dashboard

   • Add sync timestamp to Vault/Dashboard.md
   • Include transaction count (new expenses, new revenue)
   • Flag any sync errors

Helper Script:

python .claude/skills/manage-accounting/scripts/xero_sync.py [--date-range YYYY-MM-DD:YYYY-MM-DD]

See reference/reconciliation-guide.md for detailed sync procedures.

Phase 2: Expense Categorization

When: After sync or when uncategorized transactions detected

1. Identify Uncategorized Transactions

   • Scan Vault/Accounting/Transactions/ for transactions missing category
   • Check Vault/Accounting/Current_Month.md for uncategorized items
   • Priority: Expenses first (revenue usually clear)

2. Auto-Categorize Using Rules

   • Load expense-rules.md
   • Apply pattern matching (vendor name, description, amount patterns)
   • Check against xero-categories.md for valid categories
   • Use tax-categories.md for tax treatment

3. Categorization Logic (80%+ Accuracy Target)

   • Subscription Services: Match vendor name against known subscriptions
     • Adobe, Netflix, Spotify, GitHub, AWS, etc.
     • Category: "Software & Subscriptions" or "Marketing & Advertising"
   • Recurring Payments: Identify by amount consistency + vendor
   • Office Supplies: Match vendors like Staples, Amazon Business
   • Professional Services: Contractors, consultants (look for invoice references)
   • Travel & Meals: Airlines, hotels, restaurants (check tax deductibility)

4. Update Xero via MCP

   • For high-confidence categorizations (>90%), update directly in Xero
   • For medium-confidence (70-90%), create approval request
   • For low-confidence (<70%), flag for manual review

5. Update Transaction Files

   • Add category to transaction metadata
   • Include confidence score
   • Log categorization reasoning

6. Handle Uncertain Transactions

   • Create review file in Vault/Accounting/Needs_Review/
   • Include similar past transactions for reference
   • Suggest 2-3 possible categories with reasoning

Helper Script:

python .claude/skills/manage-accounting/scripts/categorize_expense.py [--transaction-id ID] [--dry-run]

See expense-rules.md for complete categorization logic.

Phase 3: Invoice Generation

When: User requests invoice or client payment needed

1. Gather Invoice Details

   • Check request for: client name, amount, description, date
   • Look up client contact in Xero
   • Reference Vault/Business_Goals.md for rates/pricing
   • Use invoice-templates.md

2. Validate Information

   • Confirm client exists in Xero contacts
   • Verify amount matches agreed rate/scope
   • Check for duplicate invoices (prevent re-billing)
   • Ensure all required fields present

3. Create Approval Request

   • ALWAYS require approval for invoices
   • Use handle-approval skill to create approval request
   • Include:
     • Client name and contact
     • Invoice amount (line items)
     • Due date
     • Payment terms
     • Preview of invoice (text format)
   • Save approval request in Vault/Pending_Approval/

4. Execute After Approval

   • Once moved to Vault/Approved/, generate invoice in Xero
   • Use Xero MCP to create invoice
   • Capture invoice number and URL
   • Optionally send invoice via email (separate approval)

5. Update Records

   • Save invoice copy to Vault/Accounting/Invoices/INV_[Number]_[Client].pdf
   • Log to Vault/Accounting/Current_Month.md
   • Update Dashboard with invoice sent
   • Track invoice status (unpaid, paid, overdue)

Helper Script:

python .claude/skills/manage-accounting/scripts/generate_invoice.py --client "Client Name" --amount 1500 --description "Services rendered"

See invoice-templates.md for template options.

Phase 4: Bank Reconciliation

When: Weekly or before CEO briefing generation

1. Match Transactions

   • Compare bank transactions with Xero invoices
   • Identify payments received (match invoice amounts)
   • Flag missing payments (overdue invoices)
   • Detect unexpected transactions

2. Reconcile Expenses

   • Match expense transactions with receipts/approvals
   • Verify categorizations against bank statements
   • Identify discrepancies

3. Generate Reconciliation Report

   • Summary: Total reconciled vs unreconciled
   • List unmatched transactions
   • Overdue invoices report
   • Discrepancies flagging for review

4. Update Dashboard

   • Add reconciliation status to Vault/Dashboard.md
   • Include outstanding items count
   • Flag high-priority discrepancies

See reconciliation-guide.md for detailed procedures.

Phase 5: Financial Reporting & Cost Optimization

When: Daily dashboard update or CEO briefing generation

1. Calculate Financial Metrics

   • Revenue:
     • This week revenue
     • Month-to-date (MTD)
     • vs target from Vault/Business_Goals.md
   • Expenses:
     • Weekly expenses by category
     • MTD expenses
     • vs budget targets
   • Cash Flow:
     • Revenue - Expenses
     • Trend (improving/declining)
   • Outstanding:
     • Unpaid invoices total
     • Overdue invoices (>30 days)

2. Subscription Audit (Cost Optimization)

   • Identify recurring subscriptions from expense patterns
   • Check usage (cross-reference with other data sources if available)
   • Flag potential savings:
     • No usage in 30+ days
     • Duplicate functionality with other tools
     • Cost increased >20% without notification
   • Generate recommendation for cancellation or negotiation

3. Update Dashboard

   • Add financial summary section to Vault/Dashboard.md
   • Format:

     ## Financial Summary (Updated: YYYY-MM-DD HH:MM)
     - **Revenue MTD**: $X,XXX (XX% of $X,XXX target)
     - **Expenses MTD**: $X,XXX (XX% of $X,XXX budget)
     - **Cash Flow**: +/- $X,XXX
     - **Outstanding**: $X,XXX (X invoices)
     - **Alert**: [Any overdue invoices or unusual expenses]
     

4. Proactive Recommendations

   • If cost optimization opportunity detected, add to Dashboard
   • Example: "Notion: No activity 45 days. Cost: $15/mo → Annual savings: $180"
   • Create note in Vault/Accounting/Recommendations/

Security Safeguards

Before Syncing:

• ✅ Xero MCP server authenticated
• ✅ OAuth2 token valid
• ✅ Network connection stable
• ✅ Vault backup exists

Before Categorizing:

• ✅ Transaction not already categorized
• ✅ Category exists in Xero chart of accounts
• ✅ Confidence threshold met (or approval requested)
• ✅ Tax treatment correct

Before Creating Invoice:

• ✅ ALWAYS require approval (no auto-invoicing)
• ✅ Client exists in Xero
• ✅ Amount validated against rate sheet
• ✅ No duplicate invoice exists
• ✅ All required fields populated

Never Auto-Execute:

• ❌ Invoice generation (always requires approval)
• ❌ Invoice sending (requires separate approval)
• ❌ Payment processing
• ❌ Subscription cancellations (recommend only)
• ❌ Deleting transactions

Reference Files

Progressive disclosure - load on demand:

1. xero-categories.md

   • Standard Xero chart of accounts
   • Category hierarchy
   • When to use each category
   • Tax implications per category

2. expense-rules.md

   • Auto-categorization rules (vendor patterns)
   • Confidence scoring logic
   • Special cases and exceptions
   • Rule priority order

3. invoice-templates.md

   • Standard invoice templates
   • Template selection logic
   • Required fields per template
   • Customization options

4. reconciliation-guide.md

   • Step-by-step reconciliation process
   • Matching algorithms
   • Discrepancy handling
   • Reporting format

5. tax-categories.md

   • Tax treatment by expense type
   • Deductible vs non-deductible
   • GST/VAT handling
   • Documentation requirements

Helper Scripts

xero_sync.py

Purpose: Fetch transactions from Xero and update Vault

Usage:

# Sync today's transactions
python .claude/skills/manage-accounting/scripts/xero_sync.py

# Sync specific date range
python .claude/skills/manage-accounting/scripts/xero_sync.py --date-range 2026-01-01:2026-01-11

# Dry run (preview without writing)
python .claude/skills/manage-accounting/scripts/xero_sync.py --dry-run

# JSON output
python .claude/skills/manage-accounting/scripts/xero_sync.py --json

categorize_expense.py

Purpose: Auto-categorize transactions using pattern matching

Usage:

# Categorize all uncategorized transactions
python .claude/skills/manage-accounting/scripts/categorize_expense.py

# Categorize specific transaction
python .claude/skills/manage-accounting/scripts/categorize_expense.py --transaction-id TX123

# Dry run (preview categorizations)
python .claude/skills/manage-accounting/scripts/categorize_expense.py --dry-run

# Lower confidence threshold (more aggressive)
python .claude/skills/manage-accounting/scripts/categorize_expense.py --threshold 0.7

generate_invoice.py

Purpose: Generate invoice draft for approval

Usage:

# Create invoice approval request
python .claude/skills/manage-accounting/scripts/generate_invoice.py \
  --client "Client A" \
  --amount 1500 \
  --description "Consulting services - January 2026"

# Use specific template
python .claude/skills/manage-accounting/scripts/generate_invoice.py \
  --client "Client B" \
  --amount 2500 \
  --template "project-based"

# Include line items from file
python .claude/skills/manage-accounting/scripts/generate_invoice.py \
  --client "Client C" \
  --line-items-file Vault/Projects/ClientC/invoice_items.json

Integration with Other Skills

Skills that use manage-accounting:

• generate-ceo-briefing → Reads financial data for weekly business audit
• handle-approval → Executes approved invoices
• monitor-system → Checks Xero sync health

Provides data to:

• Vault/Dashboard.md → Financial summary section
• Vault/Briefings/ → Revenue/expense data for CEO reports
• Vault/Accounting/ → Complete financial records

Workflow:

1. Daily 6:00 AM: xero_sync.py runs automatically
2. New transactions → categorize_expense.py auto-categorizes
3. High-confidence → Update Xero directly
4. Low-confidence → Create review file
5. User requests invoice → generate_invoice.py creates approval
6. Approval granted → Create invoice in Xero
7. Weekly: Reconciliation + cost optimization analysis
8. Sunday: Financial data fed to generate-ceo-briefing

Dashboard Logging

All accounting activity logged to Vault/Dashboard.md:

### [Timestamp] - Accounting Activity

**Xero Sync:**
- Synced: X transactions (X expenses, X revenue)
- Date range: YYYY-MM-DD to YYYY-MM-DD
- Status: Success/Errors

**Expense Categorization:**
- Categorized: X transactions
- Confidence: High (X), Medium (X), Low (X)
- Pending review: X transactions

**Invoice Created:**
- Client: [Client Name]
- Amount: $X,XXX
- Status: Pending Approval
- File: Vault/Pending_Approval/APPROVAL_INVOICE_[...]

**Financial Summary:**
- Revenue MTD: $X,XXX (XX% of target)
- Expenses MTD: $X,XXX
- Cash Flow: +/- $X,XXX
- Outstanding: $X,XXX

**Cost Optimization:**
- Recommendation: [Subscription/service to cancel]
- Potential Savings: $X/month ($X/year)

Success Criteria

This skill works correctly when:

✅ Daily Xero sync runs automatically (99%+ success rate) ✅ Transactions correctly synced to Vault ✅ 80%+ auto-categorization accuracy ✅ All invoices require and receive approval ✅ Invoices successfully created in Xero after approval ✅ Financial dashboard updated daily with accurate metrics ✅ Cost optimization recommendations relevant and actionable ✅ Reconciliation reports generated weekly ✅ Zero unauthorized financial actions ✅ Complete audit trail maintained

Common Issues

Xero MCP Connection Failed:

• Check MCP server running: ps aux | grep xero-mcp
• Verify OAuth2 token not expired
• Test connection: python scripts/xero_sync.py --test-connection
• Re-authenticate if needed

Categorization Low Accuracy (<80%):

• Review and update expense-rules.md
• Add vendor-specific patterns
• Check Xero categories match xero-categories.md
• Adjust confidence threshold if too conservative

Invoice Generation Failed:

• Verify client exists in Xero contacts
• Check all required fields present
• Ensure no duplicate invoice number
• Review Xero API error logs

Sync Not Running Daily:

• Check cron job / Task Scheduler configuration
• Verify orchestrator.py scheduling working
• Check system logs for errors
• Ensure Xero API rate limits not exceeded

Reconciliation Discrepancies:

• Verify transaction dates match bank statement
• Check for manual entries in Xero
• Review transaction matching rules
• Ensure all transactions synced

External Dependencies

Required:

• Xero account with API access
• Xero MCP Server installed and configured
• OAuth2 credentials configured in Claude Code
• handle-approval skill operational

Optional:

• Bank account API for enhanced reconciliation
• Receipt scanning for expense verification

Setup Checklist

Before first use:

• Xero account created and configured
• Xero MCP Server installed: npm install -g @xeroapi/xero-mcp-server
• OAuth2 credentials obtained from Xero Developer Portal
• MCP server added to Claude Code config (.config/claude-code/mcp.json)
• Test connection successful
• Vault folders created: Accounting/, Accounting/Transactions/, Accounting/Invoices/, Accounting/Expenses/
• Vault/Business_Goals.md includes financial targets
• expense-rules.md customized for your business
• xero-categories.md matches your Xero chart of accounts
• Daily sync scheduled (cron/Task Scheduler)

Skill Version: 1.0 Last Updated: 2026-01-11 Branch: feat/gold-accounting-xero Dependencies: handle-approval, Xero MCP Server