A Stripe payout is not your revenue. It is a net figure covering several invoices, less fees, arriving days later. Our Chartered Accountants reconcile every gateway and currency account in Xero so your revenue and margin figures survive scrutiny.
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Booking the payout as income understates revenue by the fee amount, hides the fee as an expense entirely, and detaches revenue from the invoices that generated it. Gross margin is wrong from that point on. Each gateway gets its own clearing account, sales post when they occur, settlements clear it, and fees separate on the way through.
An account in another currency creates realised gains when money moves and unrealised gains when it sits at balance date. Neither is handled by converting at whatever rate the bank feed supplies. Businesses holding balances in Airwallex or similar often carry an unrecognised position nobody has quantified, which is a difference that only grows.
If you bill annually, recognising the whole amount on receipt inflates reported revenue in a way an acquirer will reverse. It is the single most common revenue error in Australian SaaS and the first thing due diligence tests. Revenue is deferred and released across the subscription term, monthly, from the day we take over.
Each gateway gets its own clearing account in Xero: Stripe, PayPal, Airwallex, Shopify Payments, Afterpay, Amex and whatever else you run. The balance at any point should equal what the gateway holds and has not yet settled, and it is reconciled monthly to prove it.
Where a gateway account has been left to accumulate, the historical difference is quantified before it is corrected. That balance is the first thing a buyer's due diligence team asks about, and the answer needs to be better than nobody knowing.
Clients typically get every gateway reconciling within the first two closes, with historical differences explained rather than written off.
Payouts are matched back to the invoices that produced them, so revenue ties to sales rather than to bank deposits. Processing fees are separated and recognised as an expense, which is what makes gross margin mean something.
For high-volume merchants this is the difference between a P&L that shows the real cost of taking payments and one where the cost has silently reduced reported revenue. Across a year on meaningful volume, the fee line is material.
Clients typically see gross margin move once fees are recognised properly, usually downward and accurately.
Currency accounts are reconciled in their own currency, with realised and unrealised movement recognised separately, so the Australian dollar figure in your reporting reflects both the underlying transaction and the currency movement and you can see which is which.
Where the account has never reconciled, the cause is usually unrecognised FX combined with a bank feed converting at a rate that differs from the transaction rate. It can be brought back to a reconciled position, and we quantify the historical difference first.
Clients typically get a foreign currency account reconciling properly for the first time, with the historical difference explained.
Annual and prepaid billing is deferred and released across the term you deliver the service, not recognised on receipt. Monthly, as part of the close, with a deferred revenue schedule you can hand to anyone who asks.
The distinction is invisible while you are growing and extremely visible in due diligence, where recognising annual prepayments up front inflates revenue in a way a buyer will unwind. Fixing it before a process starts is considerably cheaper than fixing it during one.
Clients typically get a deferred revenue schedule and a corrected revenue trend line within the first two months.
Treatment depends on what is sold, to whom and where they are located. Exports, digital services to overseas customers, and merchant fees charged from offshore all behave differently, and assuming everything is taxable at ten per cent produces a BAS that is wrong in both directions.
We work through it per revenue stream rather than applying one rule to everything, and we put anything material to your tax agent rather than deciding it ourselves.
Clients typically get a documented GST position per revenue stream, which is also what stops the treatment drifting when someone new joins.
A buyer or investor traces revenue from your reporting through to gateway settlements and bank deposits. A clearing account that reconciles monthly is what makes that trace possible, and its absence is what turns a four-week diligence process into a twelve-week one.
Where you are heading into a process, we work out how far back the file needs to be clean, which depends on what the buyer will look at and whether prior BAS lodgements are affected.
Clients typically enter a diligence process with a revenue reconciliation the other side accepts without rebuilding it.
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Because the payout is a net figure. It covers several invoices settled over a period, it is net of processing fees, and it arrives days after the sales it relates to.
Recording that deposit as income does three things at once: it understates revenue by the fee amount, it hides the fee expense entirely, and it breaks the link between revenue and the invoices behind it. Gross margin is wrong from that point onwards and nothing downstream can be trusted. The fix is a clearing account per gateway, reconciled monthly against what the gateway says it holds.
It sits inside a monthly finance function, and most e-commerce and SaaS clients with multiple gateways run between $2,500 and $6,000 per month depending on transaction volume, entity count and payroll.
We do not sell it as a standalone reconciliation, because it determines your revenue figure, which determines your BAS, your reporting and your margin analysis. Doing it separately from the bookkeeping produces a reconciliation nobody uses. Historical clean-up before ongoing work begins is scoped separately as a project with an endpoint.
If you bill annually or in advance, yes. Deferred revenue means recognising income across the period you deliver the service rather than when the money arrives, with the unearned portion sitting on the balance sheet as a liability.
It is the single most common revenue error in Australian SaaS businesses and the one buyers find first, because recognising a twelve-month prepayment on day one inflates the month it lands and flatters the trend. Fixing it usually reduces reported revenue in the short term and makes it defensible. See SaaS bookkeeping in Australia.
Yes, and businesses running several at once are the ones that most need this. Each platform reports differently, settles on a different cycle and reconciles to a different balance, so four gateways is four clearing accounts and four reconciliations rather than one.
Marketplace channels add another layer, because Amazon and similar report net of fees and deductions that need separating before revenue means anything. Our guide to e-commerce bookkeeping covers the common structures.
Almost always unrecognised realised and unrealised foreign exchange movement, sometimes combined with a bank feed converting at a rate that differs from the transaction rate.
The account can be brought back to a reconciled position. We quantify the historical difference first, because writing it off without knowing the size is how a small problem becomes an audit question. Once it reconciles, keeping it there is a monthly step rather than a project, with revaluation at each balance date.
It depends on what is being sold, to whom and where they are located. Exports are generally GST-free, digital services to overseas customers have their own rules, and merchant fees charged by an offshore provider are treated differently from a domestic one.
We work through it per revenue stream rather than applying one rule to everything, and we put anything material to a registered tax agent rather than deciding it ourselves. The default assumption that everything is taxable at ten per cent produces a BAS that is wrong in both directions, which is worse than being wrong in one.
Yes, as a scoped catch-up before ongoing work begins. How far back it needs to go depends on whether prior BAS lodgements are affected and whether you are heading into a due diligence process.
We quantify the position first and tell you what correcting it involves, including whether any lodged statements need revising. The general approach is in our messy Xero file rescue plan. If the answer is that three years need reworking, you will hear that before you commit rather than after.
Once transaction volume and complexity justify a full-time revenue accountant, which for most businesses is well past the point this page is written for. At that scale you want the capability internally and we will say so.
