Transition of Accounts Receivable Management from Xero to Kindo Payables

Access: Payable Administrators

This guide is for our customers who are State integrated or private schools currently using Xero to manage their school Accounts Receivables – when the balances include legal debt such as Attendance dues.

In Kindo Payables - School Receivables are referred to as “Unpaid Payables” given that they represent amounts “payable” by the families.

The following steps indicate our suggested transition process for the management of these balances.

1. Any existing student payable balances relating to the year before the school converts to Kindo should remain within the Xero ledger and be managed from there until the full debtor balance has been received or written off i.e. They are not transferred into Kindo at all.

2. From launch date Kindo then becomes the primary system used to keep track of Receivables at the level of the Family Account Holders - with only a “Control” account representing the total Student Payable balances in the Xero general ledger thereafter.

3. At the start of each term (or year) Attendance dues or other compulsory fees for the current year are then applied to Kindo Family Account Holders for the students currently enrolled. Similarly, any other school Payables - including voluntary school donations – can also be applied to their accounts. This can be easily achieved through Kindo’s functionality to apply payables by whole school/ year/class/individual or pre-specified Groups.

4. On the last day of each calendar month the school will then run a “Payable Status” report on Kindo - which can be filtered with various options including Payable item name, Group, Student, and then Unpaid or part paid balances. This report can be exported to Excel - sorted and filtered as required and the “Applied Date” field used to reflect the current “invoice period” and obtain ageing of balances due. Our existing customers simply use Kindo reports for their Board reporting on Accts receivable during the year rather than Xero. Note that this can also include reporting on Income from voluntary items such as pledged donations - even if they are not

accounted for until the time of receipt within Xero.

5. At the end of the financial year (or monthly if desired) a General Ledger journal will be raised to ensure all current year Attendance Dues are reflected in the correct financial year’s income and to align the balance of the Xero Student Payable Control Account to the Kindo report of unpaid balances. This journal is then reversed at the start of the new financial year and monies relating to these balances collected after balance date are used to pay down the Student Payables Account balance in the Balance sheet.

6. Every week (or daily if that option is selected) - all accounting for income including donations would effectively be done on a CASH basis within Xero (particularly as the entitlement to Donation income does not arise until payment is made anyway). This is done on the basis of the weekly/daily Invoice and payment from Kindo – which provide summary reports for the appropriate split of income across different revenue accounts and detailed reports as backup documentation. Daily reporting/payments is also available as an option

7. We recommend the use of a weekly/daily repeating invoice template within Xero when recording Kindo payments as this will minimise coding required - Data will be pre-populated with dates/ ledger codes/ GST status and tracking if required and weekly amounts could then just need to be updated as required. We also suggest that you attach copies of the relevant weekly Kindo reports to the invoice within Xero to enable an easy audit trail after the event.
Alternatively – the efficiency of this process can be further enhanced by the use of the Kindo Xero Rapid integration functionality. This feature was released last year to our single entity schools and is on the development roadmap for extension to dual entity schools (i.e. Those with a proprietary trust entity in early 2024)

8. GST on income is returned to IRD on a Payments basis at the time that the payment from The Growth Collective Ltd is recorded. This GST basis ensures that the school does not have to return GST until such time as the monies have been received and is therefore the preferred GST accounting basis adopted by our other schools – allowed by IRD providing income is less than $2 Million per annum. If the school is registered on a GST Invoice basis - then the date of the invoice from The Growth Collective becomes the date on which the GST is returned.

9. Debtor Collection processes for current students will be managed via Kindo - where we have a number of in-built features to enable easy email reminders for payment to families - filtered as required.

Any Outstanding Payables will be shown on the Account holders page every time they log into their account - with direct links to the payment portal and that this feature has enabled our schools to significantly improve their Donation collection rates.

10. The only Receivables recorded at Account Holder level within Xero would be either for preexisting debt before the school transitioned to Kindo OR for students who have left the school.

For unenrolled students - any outstanding balances at year end would need to be removed from Kindo and recorded separately within Xero – generally as a financial year-end process. This small group of debtors would have to be managed from Xero in the current way.

Key Cost Savings

1. Significant administrative time/cost savings with no need to account for and reconcile every individual school payment. Instead - there will be a single payment and invoice from Kindo to process - with reports summarising income by GL code to simplify coding, full supporting detail available both on the portal and in report form and Xero Rapid Integration making data input quick and error free.

2. Greatly improved collection rates for Donations as every time a family logs on to their Kindo account all outstanding payables appear at the top of the screen with direct link to the payment portal. Features enabling easy email reminders also improve collection rates.

3. Merchant fees cost reduction from POLi or Online eftpos (generally about 1% of the payment value) as these are included in the Kindo service fee.

4. Reduced audit fee costs have been reported to us from current customers.

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