Xero how to
Reconcile card settlements in Xero
A terminal settles the day's card payments as one deposit, and the merchant agreement decides whether its fee is billed monthly or taken out of that money. Where the fee is billed monthly, match the bank line as one transfer out of a card clearing account for the gross amount, leave the fee out of the match, and code the monthly fee debit to its own expense account.
Key facts
- What the bank line is
- One settlement covering every card taken on the terminal that day, while the practice system recorded one payment per invoice4
- Where the canonical template posts it
- Account 106, EFTPOS clearing, at the BAS excluded tax type, taking the settlement gross8
- Where the fee goes
- Account 604, merchant and claiming fees, at the GST on expenses tax type, on its own line8
- HICAPS fee timing
- Up to 1.1 percent on credit and debit card transactions, inclusive of GST and interchange, charged monthly to the nominated account1
- HICAPS terminal rental
- 30 dollars a month for the primary merchant, inclusive of GST, with no fee to process health fund or Medicare Easyclaim transactions1
- Tyro Health card rates
- 1.1 percent on cards with eftpos at 0.5 percent, and 29 dollars a month per machine in rental2
- What the practice system sets up
- One clearing account for all payments, or one per payment type, with EFTPOS, cash, Stripe, another electronic payment provider and direct bank deposits named, each a current asset at BAS Excluded with payments enabled5
- What the integration pushes
- Every invoice and its allocated payments, sent to Xero automatically once the practice system is connected, so the payments are in Xero before the settlement lands3
- What Xero matches on its own
- Rule, match, memory and prediction, reconciling automatically only where it is highly confident and otherwise leaving the line for a person6
- The generic Xero answer
- Receive money transactions coded to a clearing account per payment type, which is written for a business whose unit is the day's takings7
- What that answer leaves out
- Nothing about a settlement that arrives short of the takings behind it7
What a card settlement actually is
A terminal does not send each tap to the bank on its own. It batches the day and sends one settlement, so the bank feed carries a single credit for an afternoon of consultations, gap payments and the occasional retail item sold at reception. Zanda puts the mismatch in one sentence for practice owners: the merchant processor deposits a single amount each day, while Xero holds each payment separately.
That is a different animal from an online platform payout, which covers several days and usually takes its fee out first. Much of the advice written about card money reaches for a fee adjustment because of it. A terminal settlement is one day, gross, with the fee billed later.
Why the generic answer misfires in a clinic
Ask Xero how to handle card takings and you get the daily takings pattern: enter separate receive money transactions for cash and card, and code them to a clearing account for each payment type. That is sound for a shop with a till, where the day's total is the only record there is. A clinic already has a better record, and the pattern quietly damages it.
- The practice system has already pushed one Xero payment per invoice, so a receive money line on top of them records the same money a second time.
- A takings entry summarises the day, so the split between a consultation and a retail sale on different revenue accounts has to be rebuilt by hand from the terminal report.
- The invoice detail disappears. A settlement posted as takings cannot answer which patient's payment is missing when the credit is short.
- The article says nothing about a settlement that arrives short of the takings behind it, which is the case a practice actually gets stuck on.
Two legs, and only one of them is about tax
The settlement leg and the revenue leg are separate, and keeping them separate is most of the job. Revenue is recognised when the invoice is raised, on whichever account the service belongs to, and that account carries the tax treatment. The settlement leg only moves money that has already been earned, so the canonical template posts it to account 106, EFTPOS clearing, at the BAS excluded tax type.
The practice systems land in the same place from the other direction. Cliniko's Xero setup guide offers a single clearing account for every payment, or one per payment type, naming EFTPOS, cash, Stripe, another electronic payment provider and direct bank deposits, each created as a current asset at BAS Excluded with payments enabled on it. So the account exists before anyone reconciles anything, and the bank line is a move out of it, not a sale. The account type decides the document. The canonical template makes each rail a bank type account, which the transfer needs; a current asset account takes a receive money instead.
The six steps, in order
Two of these happen once, when the practice is set up, and four happen every time a settlement lands. The fourth is the one that separates a terminal from a platform.
- Point the practice system's card payment type at a card clearing account rather than at the bank account, set up at the BAS excluded rate as a bank type account, so the settlement is a transfer. (Accounting, Chart of accounts)
- Put the merchant's settlement report for that day beside the bank line and read its gross total and its transaction count before touching anything in Xero. (Bank account, Reconcile)
- Match the bank line as one transfer out of the card clearing account for the gross amount, rather than coding it to a revenue account. (Bank account, Reconcile, Transfer)
- Leave the fee out of that match where the merchant bills fees monthly, because the settlement carried no fee to account for. (Bank account, Reconcile)
- Code the monthly merchant fee debit to the merchant and claiming fees expense account when it arrives, on its own statement line. (Bank account, Reconcile, Spend)
- Run the account transactions report on the card clearing account at month end and expect it to return to nil once the last settlement has landed. (Reporting, All reports, Account Transactions)
One day's settlement drawn whole
Here is an illustrative afternoon at a physiotherapy practice, with the amounts chosen so the arithmetic is visible. The account beside each line is the revenue account that invoice sat on, not the account the settlement posts to, which stays 106. The bank line equals the payments behind it, and those payments do not sit on one revenue account.
The fund benefit behind that gap is not in this deposit at all. It settles on the fund's own calendar, from a different payer, which is the shape HICAPS settlements and Tyro EFTPOS and HealthPoint settlements cover in detail. One visit, two bank lines, two days.
Gross or net, and how to find out in a fortnight
The published pricing pages give the rate but not always the mechanics. HICAPS states a card processing fee of up to 1.1 percent on credit and debit transactions, inclusive of GST and interchange, and says it is charged monthly to the nominated account, alongside a 30 dollar monthly rental for the primary merchant. Tyro Health quotes 1.1 percent on cards with eftpos at 0.5 percent and 29 dollars a month per machine. The rate is small. The timing is what decides how you post it.
The canonical template treats this rail as gross with the fee billed separately each month, and its own note says the timing is a generic assumption rather than something confirmed for every bank, to be checked against the practice's merchant agreement. Whether Tyro EFTPOS card settlements arrive gross or net is recorded in the research as unverified, and it stays open here.
When the credit is short
A short credit is a question, not a rounding event. Five causes account for most of them, and they want five different answers. The settlement report's transaction count is usually the fastest way to tell them apart, because it either agrees with the clearing account or it does not.
| What is going on | How to tell | What to do with it |
|---|---|---|
| The merchant nets its fee | Every credit is short by roughly the same proportion, and the merchant agreement says the fee is deducted | Post the gross out of the clearing account and put the fee on a fee line inside the same match |
| A payment the practice system did not push | The settlement report carries more transactions than the clearing account has entries for that day | Find the invoice in the practice system and check why its payment did not sync |
| A refund taken on the terminal | The settlement report carries a negative line | Post the refund against the original invoice rather than netting it inside the deposit |
| The credit covers more than one day | A weekend or a public holiday sits between the takings and the credit | Match the credit against every day it covers, not only the most recent one |
| A second merchant on the same terminal | Two credits on the same day, each smaller than the day's takings | Match each credit against its own merchant's takings |
One terminal, several merchants
A practice that pays practitioners on a split often runs a merchant per practitioner on one device, and HICAPS prices that arrangement directly by charging rental on the primary merchant and none on the others. The bookkeeping consequence is that several credits arrive on the same day from the same terminal, none of which equals the day's total on the front desk report.
The clean answer is a clearing account per merchant rather than one for the device, so each credit has exactly one balance it can clear. Those settlements also make useful practitioner payout evidence, because each merchant's credits are already the money that practitioner collected.
The monthly fee line, and its GST
When the fee debit finally arrives it is an ordinary expense with an ordinary tax invoice behind it. The canonical template sends it to account 604, merchant and claiming fees, at the GST on expenses tax type, which is a different treatment from the revenue the fee was charged on. Terminal rental usually rides the same debit, and both vendors quote their rates inclusive of GST.
This is the part the daily takings pattern hides. A fee folded into a deposit adjustment has no tax invoice behind it and no month to belong to, so the expense drifts across periods. On its own statement line it is one debit, one date, one rate.
Checking the account at month end
A clearing account has no bank feed behind it, so nothing arrives to reconcile it against and the check lives with the bookkeeper. Run the account transactions report on the card clearing account after the last settlement of the month has landed and read what is left in it. A balance equal to the final day's takings is the settlement still in transit. Anything older is a payment the practice recorded that the terminal never sent, or a settlement that arrived with no payments behind it.
Reconciling a clearing account covers that check in full, and Find and match a funder deposit covers the screen where a stubborn credit gets settled by hand. Card money on a platform behaves differently enough to be its own page: see reconciling Stripe payments for the rolling payout that does arrive net of fees.
What Ledger Map does with it
Ledger Map does not reconcile the bank feed for you. It holds one standing map the practice approves first, then posts one balanced document set per settlement, built from the day's payments and the accounts the map names, and leaves one exact match in the bank feed for a person to accept. The merchant fee stays outside that document set, because it is a separate debit on a separate day.
A settlement the map cannot resolve becomes a question with the options laid out, rather than a quiet posting to a default account. A credit that is short by more than rounding is exactly that kind of question. How it works walks through the map and the approval that sits in front of all of it.
Questions
How do I reconcile a credit card payment in Xero?
For a terminal, treat the day's settlement as one bank line rather than as many. Point the practice system's card payment type at a card clearing account, then match the settlement as a transfer out of that account for the gross amount. Where the merchant bills its fee monthly, no fee belongs inside the match. The clearing balance is then the takings waiting on tomorrow's settlement.
Should I use a clearing account or match straight to the invoices?
A clearing account per payment type is what the practice systems set up, and it gives an approved payment somewhere to sit between the tap and the credit. Matching straight to invoices works when the settlement is small and every payment is already in Xero, but it holds no memory of money collected and not yet banked, which is the balance a month end check reads.
Do terminal card fees come out of the daily settlement?
It depends on the merchant agreement rather than on a rule that covers every terminal. HICAPS states its card processing fee is charged monthly to the nominated account rather than deducted, and the canonical template treats the EFTPOS rail as gross with a note that the timing is a generic assumption to confirm. Compare a fortnight of settlement reports with the matching bank credits and the practice will know which it is on.
Why does my card settlement not match the invoices behind it?
Five causes cover most of it: the merchant netted its fee, a payment the practice system did not push across, a refund taken on the terminal, a credit covering more than one day of takings, or a second merchant settling separately on the same device. The settlement report's transaction count against the clearing account entries usually separates them in a minute.
Can I post the day's card takings as one receive money line?
It records the money twice where the practice system has already pushed a payment per invoice. A takings line also summarises a batch that can hold a GST free consultation and a taxable retail item on different revenue accounts, so that split has to be rebuilt by hand from the terminal report. The invoice detail goes with it, so a short credit cannot be traced back to a patient. A transfer out of the clearing account keeps the detail the invoices already carry.
Read next
Sources
Open questions
- Xero Central's own Record daily takings article renders client side and returned an empty document on every fetch on 3 Sep 2026, so the pattern described here is read through a bookkeeping practice's republication of that article rather than from Xero's own page.
- Whether a given acquirer settles gross or net of the card fee is not settled by the published pricing pages. HICAPS states the fee is charged monthly to the nominated account, and the canonical template's own note calls its monthly fee timing a generic assumption to confirm against the practice's merchant agreement.
- Whether Tyro EFTPOS card settlements arrive gross or net of fees is recorded as unverified in the research behind the templates, so this page states the template's position and leaves the question open.
- HICAPS settlement granularity, one deposit per fund or one per day, is unverified in the research, so this page speaks about the card side of the terminal and leaves the fund benefit side to the funder hubs.
- No google.com.au ranking, AI Overview or People Also Ask data could be observed for this query on 3 Sep 2026, in either the drafting pass or the fact checking pass, because both sessions exhausted their search budget. The answer landscape in the brief is assembled from the corpus's earlier ranking notes and from the four articles that could be fetched and read in full, rather than from a fresh observation of the results page.
- The canonical template posts retail goods to a taxable products account by default and asks for an item level override for the medical aids listed in Schedule 3 to the GST Act, so whether a particular item sold at reception is taxable is a per item question for the practice rather than one this page settles.
- No bank narration is published for a card settlement, so the page names no descriptor string and the matcher learns it from the practice's own feed.
Review
Last reviewed 3 Sep 2026 by Shane
General information for Australian allied health practices, not tax advice. Confirm a treatment with your BAS agent or accountant before you post it.
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