Reconciling Afterpay orders in Xero

Overview

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

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

How to Set up Afterpay

Afterpay needs its own clearing account in Xero. This is where each Afterpay payment and fee sits until Afterpay pays you.

1. Open Setup - Payouts and click Afterpay in the payment gateway list. If Afterpay is not listed yet, click Add payment gateway.
2. In Xero Clearing Account (if applicable), choose your Afterpay clearing account or create a new one (e.g., Afterpay Clearing). It must be a Bank account in Xero, but it does not need a bank feed.
3. Make sure Enable Payment is ticked.
4. To post Afterpay fees, tick Enable Fees and enter your Afterpay rates in Payment Gateway Fee (Percent) and Payment Gateway Fee (Dollar).
5. Click Update (or Add), then click Save at the top of the page.

Use a separate clearing account for each payment gateway. Do not share your Afterpay clearing account with 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:

1. In Xero, go to your bank account and open Reconcile.
2. On the Afterpay deposit line, click the Transfer tab.
3. Select your Afterpay Clearing Account and click OK.

Step 2: Account for Fees

Afterpay deposits the net amount (sales minus fees) into your bank, but your clearing account records the gross sales. The fees make up the difference.

• If you post Afterpay fees with Post to Xero: there is nothing to do here. For each order, the app creates a Bill for the Afterpay fee and pays it from your Afterpay Clearing Account. For these fees to match what Afterpay charges you, enter your Afterpay rates in Payment Gateway Fee (Percent) and Payment Gateway Fee (Dollar) for the Afterpay gateway in Setup - Payouts.
• If you do not post fees with Post to Xero: record the fees yourself for each payout.
  1. Work out the total Afterpay fees for that payout from your Afterpay payout report.
  2. In Xero, open your Afterpay Clearing Account under Bank accounts and choose Spend Money.
  3. Enter the fee amount, code it to your Merchant Fees expense account, and save.

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. Open the Afterpay gateway in Setup - Payouts, turn on Enable Fees, and enter Afterpay's fee rates (percentage and fixed amount). The app then posts each order's fee as a bill that is already paid from your Afterpay Clearing Account.

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.