Note: Currently, payments only sync from Karbon to Xero. This feature is in Beta. Reach out to Jackson.leslie@karbonhq.com if you'd like access.
Overview
The Karbon and Xero Blue Payment Sync enables seamless synchronisation of payments from Karbon to Xero Blue. This integration allows you to collect payments via Karbon payments and automatically sync them to Xero Blue with accurate payment details, ensuring your accounting records stay up to date.
Prerequisites
You must have an active Karbon account with administrator privileges.
You must have an active Xero (General Ledger) account with Primary Admin credentials.
Ensure you are logged into the correct Xero account that you wish to connect to Karbon.
You must have connected and authorised the Xero contact sync.
Demo Video
Setting Up the Xero Payment Sync
Access Xero Settings – Billing and Payments Sync
Go to Connected apps → Xero General Ledger in Karbon.
Confirm your Xero account is connected.
Note: If you haven’t set up contact sync yet, please refer to the [Contact Sync help document].
Note: If you haven’t set up Invoice sync yet, please refer to the [Invoice Sync help document].
Find the Xero Billing and Payments Sync section on this page.
Review these prerequisites:
Accounts in Xero match Karbon Service Types.
Tax rates are aligned between Karbon and Xero.
Primary currency in Xero matches Karbon’s currency.
Click Set up sync to begin the configuration.
Configure Accounts for Surcharges and Karbon Fees
When a Karbon payment is synced to Xero, the base amount is posted into a designated clearing Account that Karbon creates.
Karbon defaults to creating a new Payment Fee account inside Xero; however, you can change the mapping to another expense account. The Karbon Fee component of the payment will be posted to this account on every payment.
Karbon defaults to creating a new Surcharge Income account inside Xero; however, you can change the mapping to another income account. If surcharges are enabled, that component of the payment will be posted to this account on every payment
Configure Tax Rate for Karbon Fees
Australia
In Australia, the Payment Fee Tax rate will be a 10%expense tax rate
Ensure to map the Payment Fee Tax rate to a 10%expense tax rate
New Zealand
In New Zealand, the Payment Fee Tax rate will be a 15% expense tax rate
Ensure to map the Payment Fee Tax rate to a 15% expense tax rate
United Kingdom
In New Zealand, the Payment Fee Tax rate will be a 20% expense tax rate
Ensure to Map the Payment Fee Tax rate to a 20% expense tax rate
Other
Karbon doesn't pay taxes on Karbon Fees in other regions
There will be no option for you to map a Tax Rate, as it is unnecessary
Select Start Date
Choose a start date for Payment syncing. Only Payments with a created date on or after this date will sync to Xero.
This date can be set to any day in the future, giving you control over which Payments get synced.
Confirm your selection and click Next.
Review Settings
Review a summary of your configured account mappings, tax rate mappings, and sync start date.
You can return to this page anytime to update settings by clicking edit
Syncing Payments from Karbon to Xero
Payment Synced to Xero Invoice
Once a payment has been collected Via Karbon Payments and the Karbon Invoice will be moved to Paid
The Payment will be synced to Xero.
The base payment is synced to the Invoice and a debit is created in the clearing account for that payment
Journal Syncing
Once the Payment has successfully synced, Karbon will create and post a journal in Xero.
This Journal will take the components of the payment, which include: Surcharges and Payment Fees.
The Journal will move money in and out of the clearing account and the mapped Surcharge and Payment Fee account to ensure the money received in the Payout = Amount owing in the clearing account
Reconciling the Karbon Payout
Karbon Payouts consist of multiple payments
To successfully reconcile, you will need to allocate each of these Payments to the Karbon Clearing account to balance them.
Create a new receive money bank rule and label the Description as Karbon, so the payments are reconciled correctly. Also, remember to check that you have the correct tax rate set.
