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For many businesses, the only thing coming into Xero is the final payment that lands in the bank.
That works, but it doesn’t always tell us the full story.
With the right setup, platforms like Stripe, Tyro and PayPal can have their own feeds in Xero. This gives you much better visibility over what’s happening with your money and can save a lot of time when it comes to bookkeeping and reconciling.
For businesses processing plenty of transactions, it can make a big difference.
Let’s say you process $10,000 of sales through Stripe.
After fees, refunds and other adjustments, $9,550 might actually land in your bank account.
If we’re only looking at the bank feed, all we see is:
Stripe: $9,550
The problem is, that doesn’t tell us much.
We still need to work out:
We’re basically trying to work backwards from the final number.
There’s a better way. 😏
Where it makes sense, we prefer to have payment platforms feeding directly into Xero rather than relying only on the deposits hitting your main bank account.
Instead of simply seeing:
$9,550 → Bank
we can see the full picture:
$10,000 → Customer payments
($450) → Fees
$9,550 → Payout
$9,550 → Bank
Much better. 🥳
It means we can follow the money from the customer payment all the way through to your bank account.
If you take a lot of payments through Stripe, having the Stripe activity available separately in Xero can make reconciling much easier.
Rather than treating each Stripe payout as income, we can properly account for:
We can also reconcile the balance sitting in Stripe, rather than simply assuming all the money eventually made its way into the bank.
The same idea applies to Tyro.
If you’re processing plenty of EFTPOS transactions, the deposits hitting your bank account don’t always give us enough information to understand what’s happened behind the scenes.
Having the Tyro activity separately available in Xero makes it easier to follow the payment from the customer, through Tyro and into your bank account.
Simple.
PayPal is another good example.
You might have customer payments coming in while fees, refunds, purchases and transfers back to your bank account are all happening at the same time.
If we’re only looking at the final PayPal transfer into the bank, we don’t necessarily have the full picture.
Having PayPal set up separately in Xero lets us reconcile all of that activity before the money reaches your main bank account.
It also means we can keep track of any money still sitting in PayPal at the end of the month or financial year.
This is the biggest benefit.
Instead of spending hours looking at Stripe, Tyro or PayPal deposits and trying to work backwards, we can let Xero do more of the heavy lifting.
If something doesn’t add up, we’ve actually got somewhere to look.
It becomes much easier to pick up things like:
Importantly, it can also give you much better real-time visibility over which invoices have actually been paid.
The end result?
Less manual bookkeeping.
Cleaner reconciliations.
Better numbers.
And a lot more confidence that what you’re looking at in Xero is actually right.
Hopefully, it also means fewer questions from your accountant like:
“Any idea what this Stripe deposit from three months ago was for?” 😅
Nobody wants that.
More feeds don’t automatically mean better bookkeeping.
They need to be set up properly.
If Xero is already recording the sale and Stripe, Tyro or PayPal is collecting the payment, we need to make sure the same income isn’t accidentally recorded twice.
The goal is a nice, clean flow:
Sale → Payment Platform → Fees/Refunds → Payout → Bank
Each part has its job, and everything should ultimately reconcile.
If you’re using one of these platforms and your Xero file is getting messy, or you’re spending way too much time trying to reconcile payouts, it might be worth reviewing how everything is set up.
At PAL, we’re big believers in making your accounting systems work for you, not creating more work.
Sometimes a few small changes behind the scenes can save a surprising amount of bookkeeping time.
Cleaner Xero. Better numbers. Less mucking around.
Sounds pretty good to us.
Disclaimer: This article is here to give you general info only, not professional advice specific to your unique situation. While efforts are made to ensure accuracy, the content may change over time. We can’t take responsibility for any decisions based on the contents of this article, so be sure to chat with your accountant or advisor first!
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