Square
Square syncs your in-store and online sales to Xero automatically - daily transaction summaries, payment fees, tips, refunds, and gift cards, all without manual entry
Everything on this page comes from connecting and reconciling Square inside Xero for retail and hospitality businesses - configuring clearing accounts, getting GST treatment right, and making sense of daily sales summaries in the books. This is what we have learned
What Square does
Features
Daily sales summaries pushed to Xero automatically. Card payments, cash, gift cards, tips, and refunds - all broken down and coded Square also works as a payment service for Xero invoices, so customers can pay you directly from the invoice
Automatic daily sync
End-of-day sales summaries land in Xero each morning - no exporting CSVs, no copy-paste. Your bookkeeper starts with clean data
Invoice payments
Attach Square as a payment method on Xero invoices. Customers click a link, pay by card, and the payment marks the invoice as paid automatically
Fee tracking
Processing fees are separated out in the daily summary so they hit the right expense account - no manual journals at month end
Multi-location support
Each Square location syncs separately, so you can track revenue by site using Xero tracking categories or separate accounts
POS + ecommerce
In-store Square Terminal sales and Square Online store sales both flow through the same integration - one reconciliation point in Xero
Clearing account model
Sales hit a clearing account in Xero and match against your bank deposit when Square pays out - keeps timing differences clean
Best for
- retail businesses with in-store and online sales
- cafes, restaurants, and food trucks using Square POS
- service businesses taking card payments on-site
- businesses selling across multiple Square locations
- anyone wanting to accept invoice payments via card
Integration mapping
Shared data between Xero and Square
Sales
Fees & Payouts
Invoicing
Getting started
How to connect Square to Xero
Authorise Square with your Xero organisation, map your payment types to the correct accounts, then configure how daily settlements are recorded
Before you start
- confirm you have Xero Advisor access - a Standard user cannot authorise payment service connections
- make sure your Square account is active and has processed at least one transaction
Connect Square to Xero
- in Xero, go to the Square listing on the Xero App Store and click Get this app
- sign in to your Square account when prompted
- review the permissions Square is requesting and click Allow
- select the Xero organisation to connect if you have more than one
Configure your account mapping
- set your sales revenue account - this is where daily sales totals will post (typically a Sales or Trading Income account)
- set the Square fees account - usually a Merchant Fees or Bank Fees expense account
- set the clearing account - Square deposits take 1-2 business days, so a clearing account holds the funds between sale and bank deposit
- if you collect tips, map the tips account separately
Set up invoice payments (optional)
- in Xero, go to Settings Payment Services
- find Square in the list and click Manage
- enable Square as a payment option for your Xero invoices
- your customers will see a Pay Now button on emailed invoices with Square as a payment method
Verify the first sync
- wait until the day after your next Square sales day
- in Xero, check Accounts Sales for a Square daily summary entry
- confirm the total matches what Square Dashboard reports for that day
- when the payout hits your bank, reconcile it against the clearing account balance
Things to know
What to watch out for
Square batches payouts 1-2 business days after the sale. The clearing account handles this, but if you skip it you will have unexplained differences between sales and bank deposits
Payout timing
Square batches payouts 1-2 business days after the sale. The clearing account handles this, but if you skip it you will have unexplained differences between sales and bank deposits
GST on fees
Square processing fees are GST-free (financial supply). Make sure your merchant fees account uses the correct tax code or your BAS will overstate input credits
Summary not detail
The integration sends daily totals, not individual transactions. If you need line-item detail for inventory or customer tracking, you will need a third-party connector
Multi-location mapping
Each Square location needs its own account mapping in the integration settings. If you add a new location and forget to map it, those sales will not sync
Disconnect issues
If the connection drops (password change, token expiry), sales stop syncing silently. Check the connection status monthly - there is no alert when it breaks
Pricing
What Square costs
Xero integration
Free - no subscription required to connect Square to Xero
Transaction fees
Flat percentage per transaction, no monthly minimums - hardware sold separately