Xero Clearing Account Type Requirement for Payouts

Why the Clearing Account Must Be a Bank Account

When processing Shopify payouts via Post to Xero, we create a bank transfer from the Clearing Account to the Bank Account. However, due to a limitation in Xero, transfers cannot be created between a CURRENT type account and a BANK type account.

To ensure seamless reconciliation, your Clearing Account must be set up as a BANKtype account, even if it’s not connected to a real bank feed. This will allow us to automatically handle the bank transfer for each payout.

Manual Workaround: Simulating a Transfer

If the clearing account must remain as type CURRENT  , you can manually simulate the transfer in Xero by:

1. Creating a Spend Money transaction from the clearing account

   Guide: Add a Spend Money transaction in Xero

2. Then creating a Receive Money transaction in the bank account

   Guide: Add a Receive Money transaction in Xero

Ensure that the amount and date match the actual payout for accurate reconciliation.