Reconciling Stripe, PayPal & Afterpay in Xero

If you try to match your Shopify sales directly to your bank deposits, you will fail. This is the #1 headache for new ecommerce owners.

Why? Because of the Gross vs Net problem.

The Problem

Imagine you make a sale for $100.00.

• The Sale (Gross): $100.00
• Stripe Fee: -$2.90
• Bank Deposit (Net): $97.10

If you match the $97.10 deposit to the $100.00 invoice in Xero, you are left with a $2.90 discrepancy. If you just "write it off," you lose visibility on your fees.

The Solution: Clearing Accounts

The professional way to handle this is using a "Clearing Account" (a fake bank account in Xero).

1. Sales: Mark the $100 invoice as paid into the "Stripe Clearing Account." Balance goes up to $100.
2. Bank Feed: When the $97.10 hits your real bank, transfer it from the "Stripe Clearing Account." Balance goes down to $2.90.
3. Fees: Create a "Spend Money" transaction in the Clearing Account for $2.90 allocated to "Merchant Fees." Balance goes to $0.00.

This ensures your revenue is recorded at $100 (correct for GST) and your fees are recorded at $2.90 (tax deductible).