23 Oct Saving time with batch deposits and payments
In Xero you can use batch deposits and payments to work more efficiently and reduce manual processing.
Batch deposits allow you to receive payments for multiple Invoices at once. This is useful for depositing cash and cheques.
Batch payments are a fast way to pay multiple bills at once. They can also be used to make wage payments to your employees. So if you are after time saving ideas to reduce your workload then the following information is for you.
If your organisation receives cash and cheques for Invoices then you will be able to benefit from using the ‘Batch Deposits’ function in Xero. You can also use batch deposits if your customers make a single payment for multiple Invoices. Creating batch deposits is an easy 4 step process.
Step 4: Enter the relevant information in the necessary fields:
- Payment Date: Select the Payment Date that you are going to deposit the cheque/cash.
- Reference: Include a reference that is suitable for the organisation.
- Bank Account: Select the bank account that the cheque/cash is going to be deposited into.
- Reference/Cheque No: This section is optional – you can enter a reference that is relevant for the organisation such as the relevant customer information or cheque number.
Note: You cannot make batch payments into the credit card however you can make payments into any account that have ‘enable payments’ activated.
Batch Payments – Suppliers
You can use batch payments in Xero to streamline payment suppliers by bundling the bills together into a batch payment.
The batch file, known as an ABA file, is then exported from Xero and imported into your bank for payment. The process is slightly different for paying employees.
Prior to creating a batch payment please ensure that the bank account that you use to make payment has been set up to create ABA files. You can check this by locating the relevant bank account in your chart of accounts and ensuring that the account has been enable (ticked) to include self-balancing transactions in the ABA file and the DE User ID has been added if necessary. It’s also a good idea to ensure the BSB and account number are entered and correct.
If this information has been updated then you can start creating batch payments in Xero using these 4 steps.
Step 4: Enter the relevant information in the necessary fields.
- Payment Date: Select the Payment Date that you are going to make the payment from your bank account. If you select a weekend please ensure that this is an allowable action from the bank.
- Bank Account: Select the bank account that you would like to make payment from. Batch payments are only allowable in the base currency of your organisation and payment can only be made from bank accounts that have been ‘enabled’.
- Details: Include details that are appropriate for the organisation and will assist when you come to reconcile the batch payment.
- Supplier details: The information in ‘To, ref and due date’ is directly from the bill. If you need to update any of this information then the actual bill will need to be edited.
- Supplier Bank Account is pulled from the contact information. You can override the bank account information in this step if you want.
- Reference: In this section you can enter a reference that is relevant for the organisation such as your organisation’s name or the bill number.
- Payment amount: This figure will default to the total amount payable you can override this if you are making a part payment.
Once you have added, reviewed and updated the information please select ‘make payment’.
Once you have exported the batch file you can now open your internet banking and import the payment file to make payment. If your bank gives the option to process the batch as a single or multiple statement line please select single.
Note: It is important not the change the file format or the data in the file. If you need to update the data in the file please consider editing the batch payment.
Batch Payment – Employees
Paying employees has never been simpler in Xero and by creating one simple ABA file in Xero you can work more effectively. The batch file can only be created once you have ‘posted’ the payrun and you are ready to make payment to your employees. Select the necessary payrun, ensure that the payment date is correct and under payrun options select ‘Download ABA’.
This ABA file can now be imported into your bank to make payments to your employees as per the payrun.
Note: It is important to make sure that you export the correct payrun.
Using these features in Xero should free up your time to focus on activitiess that add value to your business.
More information can be found on the Xero support centre:
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I’d love to get your feedback or questions on this blog post below. Zowie