Connect Square with Xero

Connect your Square account to Xero, choose your account name and start date, map your account settings, and select how you want to record cash sales.

Before you start

Set up Square in Xero

  1. Go to Settings, then click General Settings.
  2. Click Connected Apps.
  3. Next to the Square description, click Setup.
  4. Click Add Square Account.
  5. Enter your information into all of the Square fields. Get advice from your accountant or bookkeeper if you're unsure what to include.
  6. Click Connect to Square.
  7. Either:
    • Sign in to Square using your email address and Square password
    • Sign up to Square by clicking Sign up and following Square's instructions.

      Image of the Square sign in.

  8. Give Xero permission to access your Square account.
  9. Wait for your Square sync to start in Xero and for your automatic transactions to appear under the heading Square Activity. You may have to refresh your screen.

    If you've chosen today's date as your sync start date, your transactions won't appear until tomorrow.

    Image showing Square activity

Square setup fields explained

This section provides guidance and tips on the Square fields. Xero helps you by filling in some of the fields for you - though you can change these to suit your organization.

Field Description
Name

Choose a name to suit your organization or to identify your point-of-sale location. If you have more than one Square account, choose a name that will help you tell the difference between accounts.

Sync start date

Choose the date you'd like Xero to start creating accounting entries for your Square sales transactions.

This can be today's date or a historical date, for example, it can be the date you started using Square. Be aware if you choose a historical date, Xero will create accounting entries which may repeat entries you've already manually entered and reconciled in Xero.

If you choose a historical date, Xero creates monthly accounting entries until today's date - then daily accounting entries start.

Square Clearing account

This is the asset account (in your chart of accounts) which shows the amount Square owes you.

If you have several Square accounts, you may want to set up a Square clearing account for each Square account.

From the drop-down menu, either click Add Account and choose a code or select an account.

If you don't add a new account but instead select an account that's already in your chart of accounts, it will need the enable payments setting.

Cash Clearing account

This is the asset account (in your chart of accounts) which shows the cash sales you've recorded in Square that are waiting to be reconciled.

If you have several Square accounts, you may want to set up a cash clearing account for each Square account.

From the drop-down menu, either click Add Account and choose a code or select an account.

If you don't add a new account but instead select an account that's already in your chart of accounts, it will need the enable payments setting.

Bank account

From the drop-down menu, select the bank account Square deposits your sales money into.

Suspense account

This is the liability account Xero uses 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.

From the drop-down menu, select the account (in your chart of accounts) you'd like Xero's sales tax calculations coded to.

If you'd like to create a new suspense account for Xero's sales tax calculations, from the drop-down menu, click Add Account.

Sales account

From the drop-down menu, select the revenue account (in your chart of accounts) you'd like your Square sales coded to.

If you'd like to create a new account for your Square sales, from the drop-down menu, click Add Account.

Refunds account

From the drop-down menu, select the revenue account (in your chart of accounts) you'd like your Square sales refunds coded to.

If you'd like to create a new account for your Square sales refunds, from the drop-down menu, click Add Account.

Fees account

From the drop-down menu, select the account (in your chart of accounts) you'd like Square's fees coded to.

If you'd like to create a new account for Square fees, from the drop-down menu, click Add Account.

Tips account

From the drop-down menu, select the liability account (in your chart of accounts) you'd like your tips coded to.

If you'd like to create a new account for your tips, from the drop-down menu, click Add Account.

You can use this account to help you calculate the tips amount you need to pay to your employees.

Invoice status for the generated invoice

Choose one of 2 invoice status options for your non-cash Square sales:

  • Paid (default option) - If you select this option, Xero automatically puts a payment against each of your Square invoices. This isn't a real payment - it's an accounting entry Xero uses to manage your Square-related accounts. Choose this option if you don't think you'll need to approve or edit your Square invoices.
  • Draft - If you select this option, Xero creates draft Square invoices which have a negative line item coded to your Square clearing account. This negative line item is an accounting entry Xero uses to manage your Square-related accounts. Choose this option if you want to approve or edit your Square invoices.
What to do with cash transactions

Square can also record your cash sales (includes cash, checks, and gift vouchers). Choose one of 3 options to handle your cash sales:

  • Create a Sales Invoice (default option) - If you select this option, Xero creates a sales invoice for your daily cash sales. This option gives you the most flexibility when you reconcile your bank account. You may want to choose this option if you don't deposit your Square cash sales into your bank account daily.

    If you choose this option, you'll need to create a receive money transaction each time you deposit your Square cash in your bank account. Code these receive money transactions to your cash clearing account.

  • Do nothing - If you select this option, Xero doesn't create automatic accounting entries for your cash sales. You'll have to enter them manually. You may want to choose this option if you don't process any cash sales through Square.
  • Create a receive money - If you select this option, Xero creates a receive money transaction for your daily cash sales. This option makes your bank reconciliation faster but it's not as flexible as the sales invoice option. You may want to choose this option if you deposit your Square cash sales into your bank account daily.