DataRails Xero Integration Guide [2026 Updated]

Connecting your accounting software to your financial planning and analysis (FP&A) platform is the key to unlocking real-time insights and saying goodbye to manual reporting. If you’re using Xero for your daily accounting, you can supercharge your financial analysis by integrating it with DataRails. This guide provides a complete walkthrough for connecting the two, from the initial setup to troubleshooting common issues, so you can automate your financial data flow and get back to strategic planning.

Why Connect Xero with DataRails?

Xero is an excellent tool for managing day-to-day accounting tasks—it tracks your revenue and expenses, simplifies bank reconciliations, and keeps your books in order. It's the definitive record of what has happened financially in your business. However, financial teams need more than just historical data; they need to forecast, budget, and analyze "what-if" scenarios to guide future decisions.

That's where an FP&A platform like DataRails comes in. It picks up where your accounting software leaves off, providing the tools for sophisticated budgeting, forecasting, and creating dynamic management reports. Problems arise when data is trapped in one system. Without a direct connection, teams are stuck in a cycle of manually exporting CSV files from Xero and pasting them into complex spreadsheets, a process that is not only time-consuming but also prone to costly errors.

By connecting the two systems directly, you create an automated workflow that offers several key advantages:

• Eliminate Manual Data Entry: The integration automatically pulls financial data from Xero—including your chart of accounts, transactions, and balances—directly into DataRails, ending the need for manual exports and imports.
• Ensure Data Accuracy: Automation removes the risk of copy-paste mistakes, mismatched formulas, or version control issues. The numbers in your FP&A models will always reflect the source data in your accounting system.
• Get Real-Time Insights: With data syncing automatically on a set schedule (daily or even more frequently), your financial reports and dashboards always show the most current information. This means your budget-vs-actuals reporting is always up-to-date and ready for review.
• Faster Closing and Reporting: The month-end close process becomes dramatically faster. Instead of waiting for manual data pulls, your financial statements and reports in DataRails populate automatically, allowing you to focus on analysis rather than data gathering.

Methods for Integrating Xero and DataRails

Before you get started, it's helpful to understand the different ways you can connect these two platforms. While there are a few options available, the native integration is almost always the best path for a reliable connection.

Native Integration (Recommended Method)

The native integration uses the official APIs (Application Programming Interfaces) from both Xero and DataRails to create a direct, secure, and stable link. This is the method DataRails designed for its users and is the most efficient way to ensure all your data transfers correctly. It allows for a deep, comprehensive data sync—not just surface-level numbers but transactional details, customer and vendor data, and your full chart of accounts. This guide focuses primarily on setting up this direct connection.

Third-Party Connectors

Tools like Zapier and Make (formerly Integromat) act as intermediaries to connect thousands of apps that don't have a native integration. While flexible, using a third-party connector for something as data-intensive as an accounting-to-FP&A link is often not ideal. These tools are better suited for simple, trigger-based automations (e.g., "when a new invoice is created in Xero, add a row to a Google Sheet"). They may struggle with syncing an entire chart of accounts or large volumes of transactions, and they can introduce potential data latency or additional subscription costs.

Custom Development

For large enterprises with very specific needs, building a custom connection using the Xero and DataRails APIs is an option. This requires access to software developers and is a significant investment in time and resources, both for the initial build and ongoing maintenance. For the vast majority of businesses, a custom solution is unnecessary, as the native integration provides all the functionality needed.

Your Step-by-Step Guide to Connecting DataRails and Xero

Let's walk through the steps for setting up a stable, automated data sync using the recommended native integration method. Make sure you have administrator access to both your Xero and DataRails accounts before you begin.

Step 1: Obtain API Credentials From Xero

To let DataRails access your Xero data, you first need to create a secure key inside Xero. This key proves to Xero that the DataRails connection request is legitimate. You do this by creating a private "app" in the Xero Developer Portal.

1. Log in to the Xero Developer Portal with your Xero account credentials.
2. Click on "My Apps" in the navigation and then select "New App."
3. Give your app a clear name, such as "DataRails Integration," so you can easily identify it later.
4. Choose "Web app" as the integration type.
5. For the OAuth 2.0 redirect URIs, you will need to enter the specific callback URL provided by DataRails. You can find this in your DataRails environment under the Xero connection settings, or ask their support for the exact address. This is a critical step for security.
6. Once you've entered the required information and accepted the terms, save your app. Xero will generate a Client ID and a Client Secret. Copy and store these credentials somewhere secure; you will need them in the next step.

Step 2: Add Xero as a Data Source in DataRails

With your API credentials in hand, you can now log in to DataRails to establish the connection.

1. Log in to your DataRails account.
2. Navigate to the data management or integrations section of the platform. This is typically found in the main settings or a dedicated "Data Sources" menu.
3. Find and select "Xero" from the list of available accounting systems.
4. You will be prompted to enter the Client ID and Client Secret that you generated from the Xero Developer Portal in the previous step.
5. After entering the credentials, you will be redirected to a Xero authorization screen. Here, you will grant the DataRails app permission to access your organization’s data. Review the permissions and click "Allow access."

Step 3: Map Your Data and Configure Settings

Once authorized, DataRails will establish the connection, but you need to tell it how to interpret your Xero data. This process, called data mapping, is where you align your Xero chart of accounts with the financial reporting structure in DataRails.

1. Map the Chart of Accounts: DataRails will automatically pull in your chart of accounts from Xero. Your task is to map each account (e.g., "Sales - Product A") to the correct financial category in DataRails (e.g., "Revenue," "COGS," "Operating Expenses"). This ensures your P&L, balance sheet, and cash flow statements are populated accurately.
2. Define the Sync Frequency: Decide how often you want data to update. For most teams, a daily sync overnight is sufficient to provide fresh data by the start of the business day. However, during critical periods like month-end close reporting, you may opt for a more frequent sync.
3. Configure Initial Sync: Determine the historical date range for the first data sync. Do you want to pull data from the last two years, or just the current fiscal year? This initial pull might take some time depending on your data volume.

Step 4: Test and Validate the Connection

Never assume an integration works perfectly on the first try. Always verify the data integrity before relying on it for reporting.

1. Run a manual sync to pull your first batch of data from Xero to DataRails.
2. Open a standard report in Xero, such as the Profit & Loss statement for the last completed month.
3. Generate the same Profit & Loss statement in DataRails for the exact same period.
4. Compare the key totals—revenue, gross profit, net income—between the two reports. They should match perfectly. If they don't, revisit your data mappings to ensure all accounts have been correctly assigned.

Troubleshooting Common Integration Issues

Even with a well-designed connection, you might run into occasional hiccups. Here are solutions to some common problems finance teams encounter after setting up the integration.

• Problem: Data is missing or not updating.
  This often happens if the API token used to authorize the connection has expired. For security, these tokens periodically time out. To fix this, simply revisit the Xero integration settings in DataRails and re-authorize the connection. It's also a good idea to check your sync schedule to make sure it's running as expected.
• Problem: Financial reports don't match between Xero and DataRails.
  If your top-line numbers aren't tying out, the root cause is almost always an issue with the data mapping. Go back to your mapping configuration and check for unmapped accounts. It's common for a new expense or revenue account to be added in Xero that hasn't been categorized yet in DataRails.
• Problem: The integration is generating sync errors.
  If your company processes a very high volume of transactions, you might occasionally exceed the API rate limits set by Xero. This means you're trying to send too much data too quickly. Often, simply waiting and retrying the sync will work. If the problem persists, check the detailed error log in DataRails or contact their support team for guidance on optimizing your sync settings.

Final Thoughts

Integrating Xero and DataRails moves your finance team beyond static, historical reporting and into dynamic, forward-looking analysis. By automating the flow of data, you save hours of manual effort, reduce the risk of errors, and ensure your strategic decisions are based on the latest, most accurate financial information.

While this integration streamlines financial data analysis, questions revolving around tax compliance and planning often come up during the FP&A process. When you need quick, authoritative answers to complex tax questions without sifting through IRS documents or dated articles, our AI assistant is designed for that. Instead of switching from your analysis to manual research, Feather AI provides citation-backed answers in seconds, helping you assess the tax implications of your financial scenarios on the fly.