Preparing for Xero Integration

ABOUT XERO INTEGRATION

Xero Integration has been designed to save processing time and reduce discrepancies between the Hero Student Billing module and a school's Xero Accounting Package.

Many school Finance Officers will reconcile payments received in Xero to the desired ledgers. They will then perform the same process in Hero, thus duplicating the processing time and increasing the chance of discrepancies. Xero integration removes this double handling. 

HOW IT WORKS

• ALL payments received into Xero that relate to Hero Line Items are reconciled to a single Hero Clearing Account which has been created specifically for this purpose. This relates to payments from ALL sources i.e. internet payments, EFTPOS, cash banking and Stripe. 
• These payments are then processed in Hero in the usual way and allocated to the appropriate line item or Payment in Advance.
• The Hero Bank Reconciliation Report forms the basis of the integration with Xero. Transactions that have not yet been updated to Xero will be available for selection by payment type. Selected transactions will be stamped with the next batch number and uploaded to Xero. 
• The upload process will create a Draft Journal for that batch in Xero, which will credit the appropriate Ledgers and debit the Hero Clearing Account. On posting the Journal in Xero the Hero Clearing Account balance will be reduced and the appropriate Ledger balances increased. 
• If all reconciled transactions have been processed in both Xero and Hero, the Hero Clearing Account should have a balance of zero.
• Transfers from Payment in Advance to other Line Items will be uploaded to Xero via the Transfer Transaction List as these do not appear on the Bank Reconciliation Report. These will create a Draft Journal in Xero which will credit the appropriate Ledgers and debit the Payment in Advance Ledger in Xero.
• To ensure successful integration with Xero, the Ledgers in Xero must match the Ledgers in Hero. These are matched by Ledger Code. A sync process will update Hero with any changes or additions made to the Ledgers in Xero. Only those transactions with Xero Ledgers will be available for selection and upload.

There are several steps that need to be carried out before a school can successfully integrate with Xero. Please ensure that ALL steps are followed.

CREATE THE HERO CLEARING ACCOUNT IN XERO

1. Log into your school's Xero account.

2. Go to Accounting > Chart of accounts

3. Select Add Account

4. Create the Hero Clearing Account with these specifications. 

Note: The Code can be whatever falls in the correct code range for Current Liabilities in your school's Xero Chart of Accounts.

5. Click SAVE

CREATE ONE OR MORE HERO CUSTOMERS

A school can have either a single Hero Contact (e.g. Hero Caregiver) or they may choose to have one customer per payment type (e.g. Hero Cash, Hero Eftpos, Hero Internet, Hero Stripe). This option will make reconciliation easier as batches relate to a single payment type.

1. Log into your school's Xero account.

2. Go to Contacts > Customers

3. Select Add Contact

4. Add the Contact name/s (a single Hero contact is the minimum requirement) eg:

5. Click SAVE

ENABLE QUICK ACCESS TO MANUAL JOURNALS

Hero sends the posting information to Xero as a Manual Journal. If you have Adviser access you are able to add Manual Journals to the Accounting Menu.

To add Manual Journals to the menu

1. Click Accounting > Advanced

2. Click the star beside Manual Journals.

CHECK YOUR LEDGERS IN XERO

1. Ensure your Xero Ledgers are well named for easy identification.

2. Check the tax code is correct.

3. Check that they are Revenue accounts.

4. Ensure you have a Hero Payment in Advance (this is set up as a Current Liability) Ledger in Xero.

This example may be of assistance.

PREPARE YOUR HERO LEDGERS FOR INTEGRATION

In order for Hero to integrate with Xero the Ledgers must match. This may require some changes to your current Ledgers in Hero. The sync connects via the Ledger code and the details in Xero are considered to be the 'master' details.

If this process is difficult, please contact the Hero Helpdesk for assistance. It may be easier to not integrate to Xero until the start of a year.

1. Update Ledger codes to match Xero

If your Ledger Codes in Xero do not match the Ledger Codes in Hero, they will need to be changed in Hero to match. Changing a Ledger Code in Hero will reflect across all previously created transactions.

E.g. the Ledger Code for School Donations in Hero should be the same Ledger Code as Xero. Amend it in Hero. 

School Donations ledger in Hero

School Donation ledger in Xero

Action to take - edit the Hero Ledger code to 450

2. Identify redundant codes

Once integration is turned on, it is important to not use Ledger Codes that don't exist in Xero. Our team will be creating a process to enable these codes to be hidden but until then, you may wish to rename these to prevent them being used in error. If outstanding debt against these can be written off, it is a good idea to do so.

3. What to do with duplicate codes

In Hero you should not have multiple ledger codes relating to a single ledger in Xero however we are aware that some schools do. 

The best action in this situation is to:

• Create a new ledger with the correct code (this can be done using the sync) OR change the code of the Ledger with the most unpaid line items to the master code e.g. if you have duplicate ledgers for Camps, the last camp should have the most debt. 
• Mark all duplicate codes as DO NOT USE. This will not prevent payments being made against these ledgers but it will remind you not to use them in the future. Any payments received or transfers made against these ledgers will need to be updated manually in Xero. The posting totals will be easily identifiable from the Ledger Summaries.
• Create all future Ledger Items from the master code.

TIMING YOUR INTEGRATION

The above tasks can be carried out before Xero Integration is turned on. Start doing this now in preparation.

Once Xero Integration is available it is important to time it well to ensure that no transactions are left unposted. 

Do not reconcile transactions to the Hero Clearing Account until you are ready to turn on Xero Integration. It should begin with a zero balance.