Small businesses waste a lot of time trying to answer a simple question: did I actually get the money I think should have for everything I sold yesterday, last week, last month? Up until now, Commerce Sync has done a pretty good job with Stripe. But as we know with accounting, "pretty good" is "not good enough."
Commerce Sync is excited to announce support for Stripe Transfers into your QuickBooks and Xero accounts, fully automating reconciliation.
How Stripe Transfers Work with QuickBooks
Here's how the new feature works with QuickBooks Online. First, we enter all Stripe sales from a given day as a summary invoice, and individually apply each charge as a payment to the invoice:
All of the payments are initially tracked in a Clearing Account, which is used to track payments that have been authorized, but before they are actually transferred between banks. For QuickBooks Online, the clearing account must be the default Undeposited Funds.
You'll notice the above $20.00 payment was partially refunded for $5.00. Any Refunds work in a similar manner, entered as Refund Receipts and winding up as a negative entry in Undeposited Funds:
Eventually - usually the next day, save weekends - Stripe's bank takes all Charges and Refunds, takes out Stripe's processing fees, and sends them to the merchant's bank. Commerce Sync represents this activity in QuickBooks Online by entering a Deposit as follows:
- Each previously entered Payment and Refund Receipt is targeted for Deposit.
- Stripe Fees are now subtracted from the deposit total, rather than the sales invoice.
- The net deposit total is transferred into the Bank Account of your choice.
This approach has two key advantages:
- It is 100% representative of Stripe settlement activity.
- Stripe Fees are now subtracted from settlement rather than sales.
How Stripe Transfers Work with Xero
Stripe transfers work in Xero similar to how they work in QuickBooks Online, with a few notable exceptions:
- Stripe transfers / settlements are represented as Bank Transactions (Accounts > Bank Accounts), the Xero equivalent of QuickBooks' Deposits:
- Users may choose any asset account as a Clearing Account for funds prior to deposit (again, into a chosen Bank Account)
Otherwise, Stripe Transfer activity is represented in Xero in all ways equivalent to QuickBooks Online, mostly in terms of the flow and footprint in the Chart of Accounts.
One more thing...
Both QuickBooks and Xero support automated Bank Feeds. For a business that does this, Stripe Deposits will be fed automatically into the accounting software as a bank transaction. Is this duplicate data? No! In fact, it streamlines the process of reconciliation.
While bank transactions can be automatically matched using rules, users may still elect to match transactions manually. Furthermore, any discrepancies are immediately apparent, not after hours of receipts, statements and guesswork. In this way, Commerce Sync doesn't make the accounting software you buy, we just make the accounting software you buy... better.
Activating and Managing the Feature
For all Stripe businesses activating Commerce Sync after January 13th, activating Deposits is easy: we do it automatically during activation! Users are only prompted to select a bank account.
Existing users will need to go into their Commerce Sync Dashboard and select a Bank Account (under Deposits) to track Stripe Transfers. You can get step-by-step instructions here or contact our Customer Experience team for help.
We are excited about this feature and hope you are too!