Managing Trust and Scholarship Payments for Students

Managing Trust and Scholarship Payments for Students

Access: Payable Administrators

Scholarship bodies, education trusts, and other external organisations sometimes pay on behalf of students. Because these payments don't come from a family, they need to be receipted through a specific process to keep your records accurate and ensure funds are managed correctly.

Before you start

There are a few important things to be aware of before processing a payment from an external organisation.
  1. Keep funds in the holding account until they are ready to be receipted against a specific charge. If money is added to a student's account as a top-up, it sits as a credit in their wallet and a linked caregiver can withdraw it, which could cause confusion as the funds belong to an external payer.

  2. Create a new payable item to receipt the payment against. Enter 0000 in the GL Code field as a placeholder, and make sure donation receipt is not ticked. Donation receipts can only be issued to the person who made the payment — in this case, the trust or organisation, not the family.

  3. Use the student's existing caregiver account when processing through POS. Do not use Add payer to add the trust or organisation — this will produce incorrect results.

How to process the payment in Kindo

The correct process is to create a new payable item specifically for the external payment, apply it to the student, and then receipt it through POS using the student's caregiver account.

Creating the payable

1. Create a new payable item in the Payable Catalogue with a name that clearly identifies the source and what it covers. For example:  Year 8 Camp paid by Community Trust. A clear name ensures the payment is easy to identify in your records and helps avoid any confusion if the transaction is queried later.





2. Enter 0000 in the GL Code field as a placeholder. You will assign the correct GL Code later when processing through your accounting system.




3. Leave donation receipt unticked on this payable.




4. If the student already has a payable applied for the same item (for example, a Year 8 Camp charge already sitting on their account), go to the Payable status page, select the student and choose Exempt from the Select action dropdown before applying the new one.





Receipting the payment through POS

When the funds are received, process the payment through POS, selecting the student's actual caregiver as the account to receipt against.

The caregiver will receive an order confirmation email. This is expected — the payable name makes it clear that the item has been paid for by the trust, not by the family.

Alert
Do not select a new or different payer for the POS transaction. Select the student's existing caregiver account and use the payable name to carry the audit trail.

How to process the payment in Xero

Set up a new GL Code Holding Account in Xero — for example: Student payables paid for by charities or trusts — to record and hold any funds available for future charges.

To record and move the payment correctly in your accounting system, you will need to action a journal. Follow the steps below.
  1. Action a journal for the amount being used for the payment. Debit the GL Holding account and credit the Kindo Clearing account.
  2. Receipt the POS payment against the payable you created, ensuring the payable name clearly identifies the external payer.
  3. This item will not show a GL Code on your weekly billing report or draft invoice. Enter the correct GL Code for the item that was exempted on the student's account.

This gives you an audit trail in both Kindo and Xero.

If you are unsure how to set up the GL Code, check with your school accountant.

If the trust or organisation needs a donation receipt

If the external organisation requests a donation receipt for the items paid on the student's behalf, run a report from the Order status and reporting page — download the Excel workbook or CSV file to get the total funds received from them — then generate a manual donation receipt accordingly. The receipt goes to the organisation, not to the family.

Scenarios

Scenario 1: Student has outstanding charges

Follow the steps above. Create a new payable named to reflect the external payer, exempt the student from any existing payable for the same item if needed, apply the new payable, and receipt through POS.

Scenario 2: Student has no outstanding charges

If there are no charges yet for the student, do not process the payment through Kindo yet. Keep the funds in the holding account until the relevant item or charge is created and ready. Credits sitting in a wallet can be withdrawn by a linked caregiver, which could cause confusion if the funds belong to an external payer and need to be refunded.

Once the charge exists, follow the steps above to create the payable and receipt through POS.

Scenario 3: Student has some outstanding charges and a remaining credit

Example: A student has $150.00 in outstanding charges. The scholarship body pays $200.00. Process $150.00 against the outstanding charges using POS. For the remaining $50.00, follow the same steps as Scenario 2 — keep the funds in the school's holding account until the next charge is created for that student.

Scenario 4: Scholarship funds sitting in a caregiver's account

If a student was previously linked to a caregiver and scholarship or trust funds ended up in that caregiver's account, the credit will need to be settled and returned to the school's bank account before the correct process can be followed.
Contact the Kindo support team to assist with settling the account and returning the funds.

Notes
  1. Each external payer situation may be slightly different. If you are unsure how to proceed, contact the Kindo support team before processing.
  2. Kindo support can check specific invoice numbers if your Xero reconciliation does not balance after following the steps above.
  3. This process also works well for School Managed Accounts (SMA).

Related articles
  1. External Payers - Overview



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