Merchant processors aggregate many sales into periodic payouts. Reconcile by downloading payout CSVs, breaking deposits into component sales/fees/refunds, matching to bank deposits, and recording fees and refunds separately. Reconcile daily or weekly for high-volume merchants; monthly minimum.
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Why this matters
Merchant processors (Stripe, Square, PayPal) typically batch dozens or thousands of transactions into single or periodic bank deposits. If you only reconcile bank deposits, you miss fee allocations, refunds, and chargebacks that affect gross sales and COGS. Proper reconciliation ensures accurate revenue, fee recovery, and tax-ready books.
Real-world story
A cafe owner noticed monthly sales on the P&L that didn’t match POS reports. Bank deposits showed aggregated amounts and fees were lumped as bank fees. After reconciling payout CSVs to deposits, we discovered multiple days of unrecorded refunds and duplicated fee entries — correcting these improved gross margin accuracy and reduced overpaid merchant fees by identifying duplicate charges.
Key terms to know
- Payout — The net amount the processor deposits to your bank for a group of sales after fees and refunds.
- Settlement — The process where individual card transactions are settled and later included in a payout.
- Gross sales — Total sales before fees, refunds, and adjustments.
- Fees — Processor fees, including card interchange, platform fees, and chargeback fees.
- Refunds & chargebacks — Customer refunds reduce gross sales; chargebacks are disputes and may include fees and recoveries.
- Net deposit — Gross sales minus fees and refunds — what hits your bank account.
Step-by-step reconciliation process
- Download payout reports (CSV) for the period — e.g., daily/weekly/monthly, and also download settlement/transactions exports if available.
- For each payout, break the payout into: gross sales, refunds, fees (processing & platform), adjustments, and net deposit.
- Match the payout’s net deposit to the bank deposit on the corresponding date. Note timing differences for weekends/holidays.
- Record gross sales (sales income) and separate entries for fees and refunds. Do NOT record fees as a lumped ‘bank fee’ if you want clear P&L visibility.
- Use a merchant clearing account if you prefer: post gross sales and fees to the clearing account and clear it when payout deposits hit the bank.
- Reconcile any discrepancies by researching transaction IDs in the payout report vs POS/order reports. Look for duplicates, delayed settlements, or disputes.
- Accrue or track chargebacks separately; when chargebacks reverse or are won, record the recovery and remove liabilities accordingly.
- Save payout CSVs and reconciliation notes for audit trails.
Recommended journal entries (examples)
Example A — Record gross sales and fees using clearing account method (on sale date):
- Debit: Merchant Clearing (Asset) — Gross Sales $10,000
- Credit: Sales (Income) $10,000
- Debit: Merchant Fees (Expense) $300
- Credit: Merchant Clearing (Asset) $300
- Debit: Refunds/Returns (Contra-Revenue) $150
- Credit: Merchant Clearing (Asset) $150When payout deposits hit bank (net deposit $9,550):
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- Debit: Bank $9,550
- Credit: Merchant Clearing $9,550
Example B — Direct deposit recording (if not using clearing account):
Assume net deposit $9,550, fees $300, refunds $150 (gross sales $10,000):
• Debit: Bank $9,550
• Debit: Merchant Fees (Expense) $300
• Debit: Refunds/Returns (Contra-Revenue) $150
• Credit: Sales (Income) $10,000
Worksheet — Merchant reconciliation table
Use this table to map payouts to bank deposits. Copy into a spreadsheet for automation or print it for manual reconciliation.
| Payout ID | Payout Date | Gross Sales | Refunds | Fees | Adjustments | Net Deposit | Bank Deposit Match (Date/Ref) |
| PAYOUT12345 | 2025-10-01 | 10000 | 150 | 300 | 9550 | Bank Dep 10/02 ref 9876 | |
| PAYOUT12346 | 2025-10-02 | 8500 | 50 | 255 | 8195 | Bank Dep 10/03 ref 9921 |
CSV copy (paste into a sheet)
Payout ID,Payout Date,Gross Sales,Refunds,Fees,Adjustments,Net Deposit,Bank Deposit Match (Date/Ref)
PAYOUT12345,2025-10-01,10000,150,300,,9550,Bank Dep 10/02 ref 9876
PAYOUT12346,2025-10-02,8500,50,255,,8195,Bank Dep 10/03 ref 9921
Here’s a ready-to-use CSV you can open in Google Sheets or Excel.
Download the CSV — Merchant Payout Reconciliation Template
Common issues & troubleshooting
- Timing differences — Payout date vs bank posting date — track both and reconcile by payout ID or date range.
- Aggregated deposits — Multiple payouts may combine into one bank deposit — sum the payouts to match the deposit.
- Split deposits — One payout may be split across multiple bank deposits due to holdbacks or returns — research payout notes.
- Missing fees or duplicate fees — Compare transaction-level fees in the payout export to fees recorded in books; watch for duplicate fee entries.
- Chargebacks and disputes — Track chargeback liabilities separately and reconcile when outcomes occur; include arbitration fees if incurred.
Tools & automation that help
- Use processor-native exports — Stripe, Square, and PayPal have export tools — download payouts, settlements, and transaction-level CSVs.
- Use import tools/apps — Apps that parse payout CSVs and auto-map to QuickBooks/Xero reduce manual entry (e.g., Connector apps).
- Merchant clearing accounts — Automate posting to a clearing account and auto-clear when deposit matches using bank rules.
- Bank rules & matching — Create bank rules to auto-match recurring payout patterns and amounts where possible.
Why trust this approach
Giesler-Tran Bookkeeping has reconciled thousands of merchant payouts across retail, e-commerce, and service businesses. We emphasize traceability — linking each payout to the bank deposit and saving payout CSVs for audit trails. This reduces errors, improves margin calculations, and eases tax prep.
Next steps / CTA
- Download payout CSVs for the last 90 days and paste the ‘CSV copy’ into a spreadsheet.
- Reconcile using the worksheet above and mark discrepancies for research.
- Book a free 30-min merchant reconciliation review.
It’s easy to trust the bank balance — until you realize aggregated payouts have been hiding fees, refunds, and chargebacks for months. We’ve reconciled thousands of Stripe, Square, and PayPal payouts and the pattern is the same: businesses that reconcile by payout ID see cleaner P&Ls, fewer surprises at tax time, and recover misposted fees.
If you want a quick win, book a free 30-minute evaluation with Giesler-Tran Bookkeeping.
Giesler-Tran Bookkeeping • gieslertranbookkeeping.com • 971-200-5158