Understand the Square invoices Xero creates for you
Xero automatically turns your daily sales data into a detailed sales invoice. This page explains some of the detail in your automated Square invoices, and outlines how to manage refunds.
Viewing Square invoices
To view your Square invoices, either:
- under the Square Activity heading, click on the invoice links, or
go to Accounts, then click Sales. Search for Square.
Transactions made in Square's Offline Mode won't appear on your Square invoice unless processed the same day.
Process Payments with Offline Mode (Square website)
Paid Square invoice
Your Square invoices will look similar to this if you chose the Paid invoice status in your Square setup:
Draft Square invoice
Your Square invoices will look similar to this if you chose the Draft invoice status in your Square setup:
Square invoice line items explained
|Net Credit Card Sales|
This is your total daily credit card Square sales less sales tax.
Any discounts you give your customers are deducted from this total; that is, Xero doesn't split out discounts.
Xero sets the tax rate for this line item as No Tax. This is because Xero uses the suspense line items to calculate sales tax on your Square transactions.
|Suspense account line items|
Xero uses the suspense account to match Xero's sales tax calculation to Square's sales tax calculation. Xero needs to use this account because Xero calculates rounding on sales tax slightly differently to Square. This rounding difference is usually only a few cents for each transaction so it's not something you need to watch.
Xero creates 2 suspense account lines for each sales tax rate used. So if you use 3 sales tax rates for your daily Square transactions, 6 suspense lines will appear on your invoice.
|Sales tax rates|
If you have several tax rates in Square, Xero will automatically create the same tax rates in Xero. This means your sales tax calculation in Xero equals Square's sales tax calculation.
The sales tax amount calculated for each sales tax account is listed under the subtotal in your invoices.
Xero puts a payment against each of your Square invoices if you chose the Paid invoice status in your Square setup. This is not a real payment - it's an accounting entry Xero uses to keep your Square clearing account balanced.
|To be deposited by Square into your bank account|
Xero puts a negative line item against each of your Square invoices if you chose the Draft invoice status in your Square setup. This negative line item is an accounting entry Xero uses to keep your Square clearing account balanced.
For full refunds, Xero will automatically adjust your sales, suspense, fees, and refund accounts.
Partial refunds aren't itemised in Square and will include taxes and tips. For partial refunds, you should calculate the tax and tip amounts, then manually adjust your refund, sales, and suspense accounts. Xero will automatically adjust your fees accounts.
Get advice from your accountant or bookkeeper if you're unsure of the amounts to enter.