Xero Rapid Integration - How to process a negative invoice

Xero Rapid Integration - How to process a negative invoice

When using Kindo’s Xero Rapid Integration, you may occasionally receive a negative invoice. This happens when refunds and external (POS) payments recorded in Kindo exceed payments collected through Kindo during a weekly period.

Because Xero does not allow an invoice with a value less than zero to be approved, negative invoices must be processed as a credit note in Xero.

Important
We recommend seeking advice from your accountant where appropriate, as they may have alternative processes or preferences.

How Kindo negative invoices behave in Xero

When you select Create invoice using the Kindo Xero Rapid Integration:

  1. Kindo will create a draft negative invoice in Xero
  2. Xero will not allow this invoice to be approved, as it has a value below $0
To correctly account for this transaction, you'll need to manually create a credit note instead.

How to process a negative invoice in Xero


Step 1: Create a new credit note
  1. In Xero, go to Business

  2. Select Invoices

  3. Click New credit note

Step 2: Enter the credit note details

      4. In the Reference field, enter the Kindo invoice number.
          Alternatively, you may update the automatically generated credit note number to CN-XXXXXX, using the Kindo invoice number as the reference.

      5. Select the contact The Growth Collective/Kindo (use the name as it appears in your Xero contacts).

      6. Ensure the Amounts setting (top right) is set to GST "Tax inclusive".

Step 3: Enter the values

Using information from your weekly Kindo reports, enter the following line items:

Refunds
Use the Refunds report and enter the total as a positive value, coded to your Income account.
Example: $800.00. This reverses previously recognised revenue.


Payments collected
Use the Payment Summary report and enter the total as negative values, coded to the relevant Revenue accounts.
Example: -$450.00.


Kindo fees (GST inclusive)
Use the values from the Kindo invoice and enter them as a positive value, coded to your Kindo fees expense account.
Example: $27.14


Step 4: Review and approve

      7. Confirm the net total is a positive credit note. 
          This is the accounting equivalent of a negative invoice.

      8. Approve the credit note.

The approved credit note total represents the net amount payable from the school to Kindo.

Idea
Helpful tip: 
You may find it useful to open the draft invoice created by the integration in a second Xero window and copy the account codes and values, reversing the signs as you enter them into the credit note.
Alternatively, you can print the draft invoice and use it as a reference when creating the credit note.





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