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Community > Using Xero Connected Apps >

Square as one of many forms of payment accepted

Started by Tom Limroth -   in Using Xero Connected Apps

We accept several forms of payment and generate all of our invoices in Xero for our accounting firm. We use Square to accept "in-person" credit card payments. I setup the Xero-Square integration according to the instructions in the guide and everything flows smoothly.

Except that when we process a payment using Square, Square creates a duplicate invoice in Xero which results in overstating revenues. Which must be manually cleared when payment is received.

I have 2 thoughts on how to better handle this situation neither of which I like all that much, I am hoping for something better!

First option is to change our Xero/Square integration setup to point the “Sales” & “Refunds” accounts to the Square clearing account. By doing this we would no longer have duplicate invoices going to the revenue accounts.

My second option is to turn off the Square-Xero integration and handle the fees and offset invoices in the bank account when Square sends money. Seems like a lot of work.

I looked at generating all the invoices in Square but that is not a good option at this point.
Hi Tom,

I would recommend that you DISCONNECT the square integration!! It is far too simplistic for what you are doing. At this point your best bet is to manually reconcile the Square settlement transaction with the appropriate invoices and use a "Bank Fees" adjustment line for the commission.

Peter.
Xero Certified Advisor, Canadian CPA & New Zealand CA and Xero's award winning Most Valuable Professional. I give implementation advice to clients all over the globe. Get a Xero MVP on your team! Visit my blog for various Xero articles.

You can book a live remote Xero support session with me for a very reasonable price.
 

Peter McCarroll  

I have been doing the same thing Tom has been doing and I have the same question. Peter, your suggestion is probably the most viable at this point. Does anyone know if Xero is planning to expand their intergration to allow for the matching of a payment with an existing invoice instead of just generating an invoice. Not all of us operate food trucks. Some of us operate "hipster" CPA firms.
 

Doug Waite  

What we need, Doug, is the ability to treat Square as a bank feed. Xero could certainly do that, but they prevent the rest of us from doing so as they don't make the bank feed functions available through the API.
 

Peter McCarroll  

An update - We tested a solution that we thought would work keeping the Square integration turned on and it ended up not working well. So we followed Peter's advice and disconnected the Square integration and it is working OK. Square as a bank feed seems to be the ultimate solution.

What our firm would really like to see is the ability to put an ACH "click-n-pay" option on our outgoing invoices, anyone have a solution for that??
 

Tom Limroth  

Actually Tom - I do have an ACH solution.

For those interested in initiating pre-authorised Direct Debit/ACH or Credit Card transactions based on your Xero invoice due date and with Xero Payment Services option please check out uCollect.

Right now (March 2015) it has facilities for Direct Debits for NZ Banks (BNZ, ANZ, Westpac, Kiwibank, ASB & Fetch), Direct Debits using generic ABA file in Australia, EziDebit and SEPA (Eurozone). You can also charge credit cards through Stripe. We also have PayNow integration for selected gateways. Coming soon will be eWAY, eDebit, DPS (NZ) and US ACH and more. Please let us know if there is some gateway that you would like to use that we have not listed.

The ACH feature will be released in a few weeks and allow both one-off "Pay Now" charges as well as automatic collection (charge all invoices on their due date to the ACH method approved).
 

Peter McCarroll  

I have the same problem, and I do run a food truck, and we only use square. The issue for us is that we sometimes send out Square native invoices for their option to pay online when we're doing a catering. But we keep all of our detailed invoice information for the catering in Xero. So when the Square sales invoice comes in we have to edit it to balance our catering sales account. But that still makes the invoice look unpaid to our customer, so we add a credit note, which unbalances the catering sales account. It's frustrating.

We would try to use one of Xero's integrated payment options just for caterings, but they're all more expensive than Square. And disabling the Xero-Square integration is not really an option for us because 95% of our transactions come through the Square register, and we would be solving a problem that happens every other week with additional workload every day.

The Xero-Square integration producing automatic sales invoices is convenient for exactly one thing, but not flexible if you do anything more complicated. I would at least like to see Xero work with Square to include them as a payment option for invoicing.
 

Justin Doran  

We're just starting to convert our cafe & food cart from desktop QB to Xero. Square integration was the thing I wanted most, as we run ALL of our cash and non-cash tx through square. However we are having a similar issue. Yesterday's receipts at the register include an $18 (USD) credit card payment from a wholesale banking customer. The invoice is in Xero. I am afraid if I record the invoice payment in Xero into the Square Credit Card Clearing Account it will double post when the Square data gets imported.

Any suggestions?
 

Richard Foote  

I have been reading your posts and have come to the conclusion Square interrogation with XERO is not the best for my business, at least until there is the ability to have payments tracked per clients. We are still looking to use Square reader as our Credit Card payment option for clients, as it is the best vehicle for the value.

Now that Square has offering a direct invoice service for paying online at the same 2.75% it looks like this option will work the best for us. The frustrating part, is the need to send a Square invoice and producing a Xero invoice for our accounting system for the same amount. What are the plans if any to help out with this extra step? Do you have any other suggestions on how to over come this?

Thanks
 

Brian Gaum  

following this thread.
 

Phil Hart  

Are there any new updates on this issue? We also need Square as a bank feed. Question for those with past experience that have now turned off Square integration -- If you have a customer invoice in Xero and they are doing payment by credit card.... do you mark the "receive payment, paid to" account as the checking account that Square will ultimately be depositing the funds into?
 

Brenda Culp  

I am also following this thread. I have just bought myself a square reader as I would like to offer my customers a quick and easy way to pay. If it's going to be a nightmare behind the scenes though I may reconsider. I will only have a few transactions a month but don't have the time or the inclination to be mucking around with dual invoices.
 

Jennifer Crawford  

Jennifer - if it is only a casual payment method it is no different from any other. Just don't integrate Square with Xero (I don't know if you can with just the reader anyway). When someone pays an invoice through Square you then mark it as paid in Xero to the bank account that Square will settle to. When the settlement funds come in you reconcile them against the payment records and create a Bank Fee for the fees deducted.
 

Peter McCarroll  

Thanks Peter,

Does that mean Square and Xero are entirely independent? That they only interact via the business bank account?

Do I just create the invoices in Xero and just put in the amount in Square when someone hands me their credit card?
 

Jennifer Crawford  

Yes, Jennifer. Square and Xero would be operating independently. Your process is correct - create invoice in Xero and then mark it as paid after you receive the payment through Square.
 

Peter McCarroll  

I am wondering if anyone has tested this, or maybe it was a fluke for me. I just went into the invoice in Xero and marked it paid to the square clearing account before the integration did the reconcile for the day. When I did that, I didn't see it create the Square invoice for that amount. Was that a fluke, or is that a workaround? I need to have another invoice paid to try it again, but don't have one yet.
 

Shawn Foust  

Shawn,

I think this is a fluke. To the best of my knowledge Square is not looking for a possible match before storing the payment.
 

Peter McCarroll  

Wow what a waste of my time.

To get so far into integrating Squareup only to find out I can't reconcile payments made on my squareup reader to Xero invoices.

Here is the feature request link someone created - https://community.xero.com/business/discussion/13440278
 

Russel D  

My business also issues an invoice for every job some of it is Squareup, Direct bank deposits and cash.

Here's what I did to get rid of the Squareup integration;
1. Cancelled/Deleted Squareup (General Settings > Connect Apps)
2. Go to Sales > Search for square so all invoices display.
3. Open all invoices and click on the Paid link in the invoice to take me to the payment.
4. Remove & Undo the payment which will take you back to the invoice.
5. The invoice now has no payment against it and now just Void the invoice. That takes care of the integration and gets rid of all the invoices that Square made in your accounts.
6. Don't worry your still getting those payments come through as square deposits into your bank account, so the bank feed will show the square payments.
7. Go to your bank account that has the Square payments coming in and click on reconcile, you should see "Deposit Square..." which will only be the net amount (amount you charged customer -minus the Square fee).
8. Click on 'Match'
9. Scroll down the list and find the customer invoice/s you want to match the money in from Square too and tick them.
10. You will now see you are still missing some money. That is because Square only pays you the net amount and the fees are missing.
11. Click on Adjustments and then Bank Fees.
12. In the form TO: Square, DSECRIPTION: Square Fees, ACCOUNT: Bank Fees (I made an account in Settings > Chart of accounts called Merchant Fees just so I can keep track of how much the bank robs me compared to the merchants) TAX RATE: GST Free Expenses (I am pretty sure there is no tax on bank fees in any country) AMOUNT: (type in your missing amount that square charged you).
13. Click Reconcile and that's it you've reconciled Square and your invoice.

ps When a customer pays me using my square machine, I always enter the payment on the invoice and on the payment I type SQUARE in the reference. So I know later when I am reconciling that that invoice was paid by Square machine.

pps You can do the same thing with Cash and Cheques which helps when you go down the bank and drop a load of money in the bank and you need to reconcile that large bank deposit against 10 or so invoices.
 

Russel D  

On our side, we are very frustrated with this as we actually add Xero as a recommendation from our online booking software which uses Square as a payment gateway and now we have double Invoices, one created in Xero automatically by our booking software and the one created from Square when payment arrives.... Will have to check if your suggestion work for us, or maybe stop the integration with Square or just completely forget about Xero....
I am the only staff in charge of this and I do not have time (or more headache pills!) to keep on reading suggestions on what works or not...... Not so much for easy accounting anymore!
 

Andrea Albrecht  

Hi Andrea,

Change is a headache I recommend you read the suggestions for abit, leave it for a day to process in your brain then come back to it the next day and read again, maybe do that again. Your brain will absorb the information better with some time rather than do everything in one sitting.

My recommendation, unless you have a better plan.

1. Stick with your booking software create the invoice automatically in xero.
2. Forget Square integration.
3. Square will deposit net money (after square fees) into your bank account and your Xero bank feed will pick up with that payment which will sit in your reconcile area for that bank account.
4. All you need to do is 'match' the money from square on your bank statement to the invoice that your book keeping software created.
5. There will be a shortfall between the square amount and the invoice amount because square took out their fees (see steps 10-13 of my above steps).

ps: if you do 100s of bookings per day. Xero may not be for you as it is designed for small businesses only as general booking keeping software and it will probably be quiet cumbersome to use.

pps Since april when I wrote that post I can say I have never looked back, square reader is 100% reliable compared paypal here which was absolute piece of ###t that never used to work. The only difference between the 2 when it comes to Xero is I just have to do steps 10-12 on my above steps which is completely nowhere near as stressful as having a customer standing in front of me with 'paypal here' not being able to pay me coz it won't login or location settings are not working.
 

Russel D  

Hi Russel,

Thank you for your response, as you said I will take a moment and go over the options very well and make sure we choose the right set up for us. Looking at all the information I think stopping the Square integration looks like the best option so far..... I guess we were just hoping to turn on the switch and let the magic happen...

Ps- We do not have 100s of bookings a day yet so we are ok with Xero and so far we are really happy with Square, the reader works great and they have really good rates comparing to other options.
 

Andrea Albrecht  

Hey All
I think i have a major duplication as i have had Square connected to xero, I think while im creating the invoices and applying the square payment, square has been creating an invoice n the cash clearing account and applying the payment to that as well

Please let me know if this is what has happened as i will then need to work out how i go and fix this ..... this could mean $1000's extra income that i will be taxed for

Im going to disconnect the app connection for future transactions
 

Rebecca Gray  

@Rebecca

Yes you need to get rid of the integration because you will end up with 2 invoices (yours that you created in xero and the auto invoice that square creates through the integration).

See my detailed notes above on the 28 Apr 17 for the full explanation.
 

Russel D  

Thank you .... yep worked that out now :( so not happy about this ... cleaning up the mess now
doubled my income that i would have claimed and paid tax on.... really bad

 

Rebecca Gray  

Thanks for helping out here, Russell. Rebecca, I've asked the team about this one and if you invite them in they'll be able to take a closer look at what happened, and so what the best resolution might be. Cheers.
 

Brittany H (Community Manager)  

Hello Brittany

Not sure what you mean by "if you invite them in they'll be able to take a closer look"
I've gone through the cash draw transactions removed the payments and then voided the invoices, the cash draw is now at $0.00 and I'm now confident in telling my accountant the new figures to now lodge my tax at the correct income amount, excluding the double square payments. Im lucky im small but this might mean a refund for my tax

I've also turned off the square app connect so future payments will coming and I can create my own transaction, work out the cc fee after from the square website.

Crappy really as I used to use PayPal but the payments would not move to my bank account so i started using Square, and its really good apart from this double issue.

I personally think Xero need to fix this asap as companies incomes will not be correct for tax and that could lead to a major issue for Xero with clients using Square for Credit cards
 

Rebecca Gray  

VERY frustrating to hear of this but I'm glad I read this before signing up to square.

I have a client on Xero who was taking card payments from his banks card reader at site. They have MANY jobs with the same amount. Therefore, the amounts being reconciled in Xero against sales invoices have been applied to the incorrect sales invoices quite often.

I was hoping that Square would then automate this process to avoid the manual errors. It seems like this is still not possible at this stage.

Are there any other POS systems that CAN do this?
 

Admin Admin  

Hello Chris

I still user Square, i just dont connect to Square via xero, PayPal works but then the money doesn't transfer to your bank account
 

Rebecca Gray  

What a mess. I wish I had seen this before I had to clean up a bunch of doubled invoices. My work around is that if my client wants to use a credit card, I only make them an invoice in square. I totally avoid a Xero invoice for that client so we don't double up. It works for me but now I have a problem with reconciling the square loan that I took. The integration does not work at all with that.
 

Karen Hudson