How the Stripe Clearing Account in Xero Works

Stripe deducts its fees immediately when a transaction is processed. This means the amount you see paid on the invoice won’t match the exact amount that arrives in your bank account. It can make reconciliation a little tricky at first, because the invoice shows the full payment total, while Stripe deposits the net amount after fees have been taken off.

This mean you’ll often see a small difference between what the customer paid and what lands in your account.

Pet Manager makes this process much easier if you utilise our Xero addon.

In This Article

• Clearing Account Explained
• How Pet Manager Handles The Clearing Account

Clearing Account Explained

What a clearing account does

A clearing account sits between Stripe and your actual bank account. It captures all the activity that happens before Stripe sends you a pay-out, including:

• Gross payments received from customers
• Stripe fees deducted
• Refunds or adjustments
• Net pay-out transferred to your bank

This means every movement is tracked step‑by‑step rather than lumped together.

Why it’s useful for Stripe fees

Stripe deducts fees before sending money to your bank. Without a clearing account, your bank feed only shows the net amount, making it hard to see:

• How much the customer actually paid
• How much Stripe charged in fees
• Whether the pay-out matches the transactions

A clearing account solves this by:

• Recording gross income
• Recording fees separately to your Stripe Expense account
• Showing the net transfer to your bank
• Making reconciliation in Xero straightforward and accurate

How Pet Manager Handles The Clearing Account

The process is as follows:

• Payments are processed through Stripe - transaction fees are deducted immediately.
• Pet Manager posts the original full payment amount to your Xero Stripe Clearing Account.
• Pet Manager automatically creates bills in Xero for all transaction fees and pays them from this account.
• When Stripe transfers funds from their system directly into your bank account, it will be minus the fees. When Pet Manager is notified of a transfer from Stripe, it will automatically move the correct amount from your Xero Stripe Clearing Account to the Xero Bank Account you nominated in the Pet Manager settings.
• You can now match transactions with Stripe deposits, simplifying reconciliation in Xero.
• All fees will appear in Pet Manager and a total payment amount for your reference.

Note: Pet Manager cannot provide accounting advice for your business. This article describes the features Pet Manager has put in place to assist you in identifying and reconciling payments in Xero.

For More Information

On setting up account codes for Stripe view - Setting up Stripe Account Codes for Xero 

On understanding Xero accounting view - Xero Accounting Add-on Overview