Xero Clearing Account Requirement for Payouts

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 BANK type 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.

Auto sync must be turned ON

For the bank transfer between the Clearing Account and the Bank Account to be created automatically for reconciliation, Auto sync must be turned ON. If your workflow requires manual posting of payouts and Auto sync is OFF, you must perform the transfer manually in Xero (see Manual Workaround below).

Manual Workaround: Simulating a Transfer

If the clearing account must remain as type CURRENT, or if Auto sync must be OFF, 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.