12 September 2024
How to centralise bill payments across multiple entities with a Xero payments Hub.
Managing payments across multiple entities can feel like an endless juggling act. Logging into multiple accounts, uploading separate ABA files—it's a lot.
What if you could consolidate it all into one streamlined system?
💡 If you manage more than five entities and fewer than 50 bills per month per entity, this approach is perfect for you.
With one Xero file and Parakeet, you can simplify your payment process, save costs, and create a scalable model for your business.
💡 Here’s how you can make it work.
One Xero File, Multiple Entities = lower costs & scalable operations
Instead of managing multiple Xero files, use a single Xero file—your Master Payment Entity (MPE)—to centralize invoices across related entities.
Here's how it works:
Channel Invoices
Route all entity invoices (e.g., MPE1, MPE2) to the Master MPE Xero file.
Set up Suppliers
Create suppliers in Xero for each entity and link them to their respective purchase/expense accounts.
For entity 1 - MPE1 -> COGs-MPE1
For entity 2 - MPE2 -> COGs-MPE2
Allocate Expenses Automatically
Approved bills are assigned to the correct chart of accounts, ensuring accurate spending visibility.
💡 Pro Tip: Consult with your accountant to ensure proper setup and compliance.
How Parakeet Simplifies It Further
Once bills are approved, Parakeet handles the heavy lifting:
Consolidated Payments
Receive a summary email (e.g., $100,000 across 12 entities). Pay it all in one go via the MPE's account.
Funds Transfers
Transfer the total payment to a trust account. Parakeet disburses funds to suppliers after a 2-day waiting period.
Detailed Remittance
Suppliers get a clear CSV breakdown of payments, making reconciliation easy.
Payer Protection
Why the 2-Day Waiting Period Matters
Transfer Time
Ensure funds reach the trust account on time.
Payment Flexibility
Cancel payments if needed before they’re processed.
Centralise and save
By consolidating payments into one Xero file and automating the process with Parakeet, you eliminate complexity, cut costs, and gain full control over your entity’s payments.
When this model Isn't Ideal
If your entities handle over 50 bills/month or operate as distinct business lines, separate Xero files might work better.
For personalised advice on the best approach for your business, reach out to us or consult with your accountant or bookkeeper.
Questions?
You can learn more about it here.
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About Parakeet:
Parakeet is a certified financial services app in the Xero app store that automates bill payments (BPAY & EFT) out of Xero and removes the need for manual uploading of ABA files or BPAY batch files into internet banking.
See Parakeet's Xero App Store listing here.
Learn about Parakeet's automated BPAY Bills payment automation (AP) here
For more information, contact: media@helloparakeet.com
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