Square POS Sales to Xero for Retail & E-commerce

# Square POS Sales to Xero - Retail & E-commerce

## Purpose
Set up if you use Square for in-store payments and Xero for accounting to automate daily sales reconciliation.

## When to Use
Feed Square point-of-sale transactions into Xero automatically with daily summaries, GST breakdowns, and category mapping for clean retail accounting.

## Instructions
1. Review the template below and familiarise yourself with the structure
2. Replace all [bracketed placeholders] with your retail & e-commerce business details
3. Customise the tone and formatting to match your brand
4. Save in your preferred tool (Square or Xero)

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## Square POS Sales to Xero

### Overview
Automatically record Square POS transactions in Xero with correct GST treatment and category mapping, giving you real-time visibility of retail sales in your accounting system without manual reconciliation.

### Prerequisites
- Square account with POS set up (any plan)
- Xero account (Standard or above)
- Zapier account (Starter plan or above)
- Xero chart of accounts with:
  - A "Square Clearing" bank account (manual type)
  - Revenue accounts for each product category
  - A "Square Fees" expense account

### Setup Steps

**Step 1: Set up Xero accounts**
Create the following in your Xero Chart of Accounts:
- "Square Clearing" (Bank account, Manual type) for tracking Square transactions
- "POS Sales Revenue" (Revenue account) for in-store sales
- "Square Processing Fees" (Expense account, GST Free) for Square transaction fees

**Step 2: Configure Square categories**
In Square Dashboard, ensure your items are organised into categories (e.g., "Food", "Beverages", "Merchandise"). These will map to Xero revenue accounts.

**Step 3: Create a new Zap in Zapier**
Log in to Zapier and click "Create Zap". Name it "Square Sales to Xero".

**Step 4: Configure the Square trigger**
- App: Square
- Trigger event: "New Payment" (completed payments only)
- Account: Connect your Square account
- Location: Select your store location (or "All Locations" if applicable)
- Test: Process a test sale through your Square POS

**Step 5: Configure the Xero action (record the sale)**
- App: Xero
- Action event: "Create Bank Transaction" (Receive Money)
- Account: Square Clearing
- Contact: "Square POS Sales" (create a generic contact for daily sales)

**Step 6: Map fields**

| Square Field | Xero Field | Notes |
|-------------|------------|-------|
| Total Money Amount | Transaction Amount | Gross amount including GST |
| Payment ID | Reference | Unique identifier for reconciliation |
| Created At | Date | Transaction date and time |
| Item Name | Line Description | Product or service sold |
| Item Category | Account Code | Map categories to Xero revenue accounts |
| Tip Amount | Separate Line Item | If tips are collected, record separately |
| Processing Fee | Spend Money transaction | Record as Square Processing Fee |

**Step 7: Configure GST**
- For Australian businesses, most POS sales include GST
- Set tax type to "GST on Income" (the amount includes GST)
- For GST-free items (e.g., fresh food under $1,000), map to a separate tax rate
- Square's receipt will show the GST breakdown for verification

**Step 8: Record Square fees**
Add a second Xero action:
- Action: "Create Bank Transaction" (Spend Money)
- Account: Square Clearing
- Contact: "Square"
- Amount: Square processing fee
- Account code: Square Processing Fees
- Tax: GST Free (Square fees are not subject to GST in Australia)

**Step 9: Test the integration**
1. Process a test sale through your Square POS (use a small amount)
2. Wait 2-3 minutes for the Zap to fire
3. Open Xero and check the Square Clearing account
4. Verify the sale amount and fee are both recorded
5. Check GST treatment is correct on the sale transaction
6. Process a refund test and verify it records correctly

### Error Handling
- **Refunds:** Create a separate Zap for Square refunds that records a Spend Money transaction in the Square Clearing account
- **Split payments:** Square records these as a single transaction. The full amount maps to Xero regardless of payment method.
- **Offline transactions:** Square queues offline transactions. They will sync to Zapier when the device reconnects.
- **Tip handling:** Tips should be recorded as a separate line item or tracked in a dedicated account for reporting.

### Maintenance
- Reconcile Square payouts (typically deposited 1-2 business days after the sale) against the Square Clearing account in Xero weekly
- Review category-to-account mappings when you add new product categories in Square
- Check the Square Clearing account balance monthly. It should zero out after payout reconciliation.
- Update fee recording if Square changes their processing fee structure

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**Complexity:** intermediate | **Setup time:** 15 minutes | **Tools:** Square, Xero, Zapier

Note: This template has been tailored for retail & e-commerce businesses in Australia. Adjust terminology and compliance references to match your specific context.