In this tutorial you will learn the proper accounting method for reconciling your Stripe payments inside Xero. If you don't have an accountant or bookkeeper then these are the steps you will need to take to reconcile those payments.
We're going to cover the following:
Adding a new Stripe bank account into Xero.
Reconciling a Stripe payment going in to your Stripe bank account.
Reconciling the Stripe fee corresponding to that payment.
Reconciling the Stripe payment going out of your Stripe bank account and into your Business bank account.
And finally reconciling the Stripe payment being received by the Business bank account.
Before we begin, I'm going to assume that you have already integrated your Studio Ninja account with Xero. To make reconciling your Stripe payments with Xero seamless and easy, make sure you have Sync Payments with Xero switched OFF inside your Xero integration settings.
This means that whenever your clients pay your invoices via Studio Ninja:
In Studio Ninja, the payment is automatically marked as paid
In Xero, the payment will need to be manually reconciled so that Xero's copy of the same invoice is marked as paid while the Stripe fees are accounted for
Turning Sync Payments with Xero ON works really well if you are accepting Bank Transfer or Cheque or Cash, but if you're receiving Stripe payments it's not a good idea as it creates duplicate payments in Xero, one coming from Studio Ninja and the other from your bank feed.
So let's begin.
Step 1: Add your Stripe bank account to your Xero account.
The first thing we need to do is add a new Stripe bank account into your Xero dashboard. To do this, click on Accounting in the main menu and then click Bank Accounts.
Next click on Add Bank Account. Then on the next screen, search the word Stripe in the Find your bank section. As soon as Stripe appears in the list, click it.
On the next screen click Sign in to Stripe & connect. Once you've logged in, you're all set. You will now have a new Stripe bank account inside your Xero dashboard.
Step 2: Reconcile your Stripe payment/s.
Next we are going to find and reconcile the payment/s that you have received from Stripe. You do this inside the Stripe bank account, not your business bank account.
Inside your Stripe bank account, locate your Stripe payment. You'll notice that it automatically sync's up with the corresponding invoice.
You'll also notice the corresponding Stripe fee here too. We'll deal with that in the next step.
To reconcile your Stripe payment, simply click OK and it will disappear from the list.
Step 3: Reconcile your Stripe fee/s.
Next we are going to allocate the Stripe fee that was associated with the Stipe payment to the correct account.
The Stripe fee is essentially a merchant fee from Stripe so in the box on the right hand side we want to type "Stripe fee" in the Who field and then choose Merchant Fees from the What field dropdown.
Once you've done that, simply click OK and this step is done.
Step 4: Transfer your Stripe payment from your Stripe bank account to your Business bank account.
So far we've reconciled money coming in to your Stripe bank account and matched it with the corresponding invoice. Now we need to reconcile money going out.
We're going to reconcile the money going out from your Stripe bank account by transferring it into your Business bank account.
If you have received one payment in a day, find the line item for the same amount that we just reconciled but this time the money will appear in the Spent column.
If you have received more than one payment in a day, Stripe will combine all the payments together into one line item. Unfortunately Stripe doesn't transfer individual payments, it combines them all together and sends them in one lot. Here's an example below.
Once you've found the line item, click on the Transfer tab inside the box on the right hand side. Then make sure your Business account is selected. Click OK and we're done.
Step 5: Reconcile the Stripe payment that was transferred into your Business bank account.
So far we've reconcile the initial Stripe payment going in to your Stripe bank account, we've reconciled the Stripe fee and we've reconciled the Stripe payment going out of your Stripe bank account.
The final step is to reconcile the Stripe payment coming in to your Business bank account.
Go back to your dashboard and this time click Reconcile in the Business Account box.
Find the line item that shows the money being received from Stripe into this Business bank account. Once you've found it, you'll notice that it will automatically match the corresponding item that we just transferred in the previous step.
Click OK and you're all done.
Now you know how to:
Add a new Stripe bank account into Xero.
Reconcile a Stripe payment going in to your Stripe bank account.
Reconcile the Stripe fee corresponding to that payment.
Reconcile the Stripe payment going out of your Stripe bank account and into your Business bank account.
Reconcile the Stripe payment being received by the Business bank account.
If you have any other questions or need help with anything, please chat to us in-app, in our Facebook group, or send us an email to firstname.lastname@example.org