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Reconciling payments that include bank fees in Xero

Short Answer

When reconciling pick the invoices that the payment relates to then click + Adjustments > Bank Fees at the bottom of the reconciliation box.

Some payment operators (eg Stripe, World Pay, GoCardless) deduct their fees before sending you the payment. This means that the cash received in the bank is typically less than the invoices the payments relate to. This creates a reconciliation issue in Xero as the amounts don’t match. However it’s easily resolved:


In the example below we take the case where there are two invoices in Xero worth a total of £480, but only £465.60 is received once Stripe have taken their fees.

Here are the steps to reconcile it:

  1. Go to the bank reconciliation page
  2. Click Find & Match on the relevant transaction
  3. Allocate against the invoices the payment relates to
  4. Now Xero won’t let you reconcile yet because the amounts don’t match so click + Adjustments then Bank Fees towards the bottom of the reconciliation box.
  5. Fill out the box as follows:
    • To: The payment processor (eg Stripe)
    • Description: Credit card fees
    • Account – Bank Fees
    • Tax Rate – NO VAT
    • Amount – The amount of bank fees deducted. In our example this is £14.40
  6. Now you can click Reconcile

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