Reconciling Afterpay Orders Using Post to Xero by Hyve

Overview

This guide explains how to reconcile Afterpay payments in Xero.

Because Afterpay does not share detailed payout data with third-party apps, Post to Xero by Hyve cannot automatically reconcile the final payout or group orders into deposits. While the app posts individual orders to Xero, the final reconciliation step must be done manually.

How it Works

Orders are Posted: Each Shopify order paid via Afterpay is sent to Xero as an invoice.
Payment Allocation: The payment is applied to the Afterpay Clearing Account you selected in the app settings.
Result: Sales, tax, and inventory are recorded immediately, but the funds sit in the "Clearing Account" until Afterpay deposits the money into your bank.

Recommended Xero Setup

To ensure smooth reconciliation, please check your setup:

Create a dedicated Clearing Account: Set up a "Current Asset" account in Xero specifically for Afterpay (e.g., Afterpay Clearing).
- Tip: You can create this account directly within the Post to Xero during the Afterpay gateway setup.
Map the Gateway: In the Post to Xero settings, map the Afterpay gateway to this new clearing account.
Keep it Separate: Do not use the same clearing account for Shopify Payments or PayPal.

How to Reconcile an Afterpay Payout

Since the app cannot see which orders make up a lump-sum deposit, you must clear the account manually when the money hits your bank.

Step 1: Reconcile the Deposit When the Afterpay net deposit (lump sum) appears in your Xero Bank Feed:

Find the deposit line in the Bank Feed.
Code this transaction (i.e. match or create a Receive Money transaction) directly to yourAfterpay Clearing Account.
Click OK to reconcile.

Step 2: Account for Fees Afterpay deposits the net amount (Sales minus Fees) into your bank, but your Clearing Account records the gross sales. You must account for the fees to balance the ledger.

If you use Automatic Fees in Post to Xero: Ensure you have entered your Afterpay fee rates in the Post to Xero. When this is configured, the app automatically creates a Bill in Xero for the fees.
- To reconcile: Locate this Bill in Xero and mark it as paid using funds from the Afterpay Clearing Account.
  
  If you do NOT use Automatic Fees: You must manually calculate the fees for that payout.
- Create a "Spend Money" transaction from the Afterpay Clearing Account, coded to your Merchant Fees expense account.

Result: Once the deposit is transferred to the bank and the fees are paid/expensed, your Afterpay Clearing Account balance should return to 0.00 (or equal the value of orders waiting for the next payout).

Frequently Asked Questions

Can the app automate Afterpay payouts? No. Afterpay does not provide the necessary payout-level data to third-party integrations, so the app cannot see which specific orders are included in a deposit.

Can Afterpay fees be posted automatically? Yes. You can enable this in the Setup tab of the Post to Xero app. However, you must manually enter the Afterpay fee schedule (percentages and fixed cents) for the app to calculate this correctly.

Will the clearing account always be zero? No. The clearing account is a "holding" account. It will often show a balance because orders are posted immediately, but Afterpay pays out in delayed lump sums. It should only zero out after you have fully reconciled a payout period.

Do I reconcile individual orders? No. Individual orders remain as "Invoices" and "Payments" within the clearing account. You only reconcile the total payout in your bank feed against the clearing account.