Before You Start

This guide assumes you have an active Square account with access to daily summary reports, and administrator access to your accounting software (QuickBooks Online or Xero).

Overview

30 min
Setup Time
Intermediate
Difficulty
Daily
Maintenance

What You’ll Learn

  • How to prepare your accounting software for Square data
  • Best methods for connecting Square sales and fees
  • Properly mapping sales tax and tips
  • Reconciling Square payouts with your bank statements

1. Preparation Steps

Before connecting anything, you need these accounts in your accounting software:

Required Accounts

  • Square Sales (Income)
  • Square Fees (Expense)
  • Square Payouts (Bank/Asset)
  • Sales Tax Payable (Liability)

Optional (but recommended)

  • Square Tips (Liability)
  • Square Gift Cards (Liability)
  • Square Refunds (Expense)

2. Choosing Your Sync Method

You have two main options, each with serious pros and cons.

Method A: Manual Entry & Bank Feed Rules

This involves manually entering data or using bank feed rules to categorize transactions.

Pros:
  • It’s free.
  • Full control over categorization.
  • Good for very low transaction volumes.
Cons:
  • Time-consuming and repetitive.
  • Prone to manual errors.
  • Doesn’t separate sales and fees properly.

Method B: Third-Party Connectors (e.g., Sync with Square, Transaction Pro)

These are paid apps that automate the daily sync and provide detailed breakdowns.

Expert Tip: We strongly recommend using a third-party connector for Square. These tools break down daily sales, fees, tips, and taxes into separate transactions in your accounting software, perfectly matching your Square deposits for effortless reconciliation.

3. High-Level Workflow for Automation

When using a third-party connector, your Square data will be automatically retrieved, processed to break down sales, fees, and taxes, and then posted to your accounting software as journal entries or sales receipts. This ensures that the net deposit in your bank account matches the entry from Square, simplifying your reconciliation process.

Here is a sample code block to show how a daily summary might be structured.

{
  "date": "2025-01-01",
  "total_sales": 500.00,
  "card_fees": 15.00,
  "tips": 25.00,
  "sales_tax": 30.00,
  "net_payout": 450.00,
  "payment_types": {
    "credit_card": 400.00,
    "cash": 100.00
  }
}

4. Setting Up a Third-Party Connector

  1. 1

    Connect Square to the Connector App

    Authorize the third-party app to access your Square account. This typically involves logging into Square through the app’s interface.

  2. 2

    Connect the App to Your Accounting Software

    Link your QuickBooks Online or Xero account to the connector app. Grant necessary permissions for data synchronization.

  3. 3

    Map Your Accounts

    Carefully assign Square sales, fees, tips, taxes, and payouts to the correct accounts you set up in your accounting software.

Common Error: Payouts Account Type

Ensure your Square Payouts account in QuickBooks or Xero is designated as a Bank account. This is crucial for matching actual bank deposits during reconciliation.

5. Testing Your Setup

Test Import Checklist

  • Import a test daily summary from a past day
  • Verify total sales, fees, and tips match Square reports
  • Check sales tax calculations are correct and assigned
  • Confirm bank deposit amounts align perfectly with your bank feed

Need Help?

Get Support

Having trouble connecting your Square data or reconciling transactions? Our team can help troubleshoot your specific workflow.

Contact Us