Stripe Xero integration- How to set it up

Dealing with payments and balancing the books shouldn't feel like another full-time gig. That’s where the Stripe Xero integration steps in. 

It is a powerful way for multichannel businesses and merchants to automate the flow of payment data and keep their books clean. 

By connecting Stripe (your go-to tool for collecting payments) with Xero (your accounting hub), you eliminate manual data entry and reconciliation errors that slow you down. This integration also ensures you can sync payment data across channels and give business owners real-time visibility into their financials. 

In this article, we’ll break down what Stripe and Xero integration actually does, how it benefits your business operations, and the different ways to set it up - direct or use a reliable third-party solution.

Understanding Stripe and Xero integration basics

Stripe is a leading online payment processor, while Xero is a powerful cloud accounting platform. Integrating the two lets you:

• Provide a unified dashboard for sales, expenses, and payments, making it easier to monitor business performance and simplify tax preparation
• Sync data to your accounting system, which is Xero
• Automate invoice payments,
• Generate and send invoices directly from Xero, reducing time spent chasing overdue accounts
• Accept and track payment statuses in real time through Stripe, speeding up cash flow

Benefits of Stripe Xero integration

Here are some of the major benefits that businesses can have integrating Stripe with Xero:

• Faster payments: Businesses report getting paid up to twice as fast
• Reduced manual work: Automatic syncing of payments, fees, and refunds eliminates manual data entry
• Accurate reconciliation: Stripe fees and payouts are matched to Xero bank feeds for quick, accurate reconciliation
• Improved cash flow: Real-time visibility into your finances and customer payments
• Audit-ready books: Maintain clean, consistent records for compliance and tax filing

Understanding Stripe and Xero integration basics

How Stripe payment data translates to Xero accounting records

• Invoices: Stripe payments mark Xero invoices as paid automatically
• Fees: Stripe fees are recorded as expenses in Xero, either automatically or via mapping rules
• Refunds: Refunds processed in Stripe are reflected in Xero, ensuring accurate records
• Payouts: Stripe transfers to your bank are matched to Xero bank feeds for streamlined reconciliation

Key data points that sync between platforms

• Invoices (sales)
• Payments (customer receipts)
• Fees (Stripe charges)
• Refunds and chargebacks
• Customer/contact information

Common integration challenges and how to avoid them

• Country settings: Cannot be changed after initial setup. Therefore, it is recommended to set it correctly from the beginning
• Transaction mapping: Ensure fees, sales, and refunds are mapped to the correct accounts
• High transaction volume: Native integration may struggle; consider advanced solutions for complex needs

Who should consider this integration

• Ecommerce businesses- running single channel or multichannel operations
• Online sellers selling their products via an ecommerce store or marketplace
• Accountants and Bookkeepers
• Any business accepting online payments and seeking automated bookkeeping

Overview of integration methods

There are two primary ways to integrate Stripe with Xero:

1. Native integration (Direct): Offered within Xero’s App Store, ideal for startups or businesses with basic needs.
   
   
2. Third-party solutions (e.g., Webgility): Better suited for businesses with high volume, multi-channel complexity, or customized accounting needs.

How to connect Stripe with Xero (Native integration via Xero App Store)

1. Go to the Xero App Store and search for Stripe.
2. Click “Get this app” and log in to your Xero account.
3. You’ll be prompted to log in to your Xero account and authorize the connection.
4. Next, log in to your Stripe account to grant Xero access.
5. Set up Stripe as a payment service in Xero. For this, you need to visit Xero and:

• Go to Business > Online payments or access the payment services settings directly
• Add Stripe as a payment service. You can do this from the Xero App Store or from within Xero’s settings
• Assign Stripe to your invoice templates so future invoices include a “Pay now” button

6. Configure payment methods and fees. For this, you need to:

• Choose which payment methods to accept (credit/debit cards, Apple Pay, Google Pay)
• Decide whether to absorb Stripe fees or pass them on to your customers (surcharging).

7. Send invoices and get paid:

• When you send an invoice, customers can pay online using their preferred method
• Stripe processes the payment, ensures correct fee mapping to the expense account, and accurate sales mapping to the revenue account
• Xero automatically records the payment and fees, streamlining your reconciliation process

Pro Tip: You can also connect Stripe from Xero’s Payment Services screen or directly from an approved invoice.

Limitations of native Stripe-Xero integration

While Xero’s built-in integration works well for basic needs, it has notable limitations:

• Designed for simple Stripe-only setups
• Doesn’t support granular transaction-level controls
• Limited customization for how sales and fees are recorded
• Doesn’t sync orders from non-Stripe platforms (e.g., Amazon, PayPal, marketplaces)

How Webgility enhances Stripe and Xero integration

What is Webgility?

Webgility automates your ecommerce accounting and inventory management by connecting your online stores, marketplaces, and POS systems to QuickBooks/Xero, so your books are always up to date and accurate.

With AI-powered bookkeeping and real-time sync, it gives you clear cashflow visibility, audit-ready records, and a unified view of your inventory across all channels, so you can close your books faster.

Key benefits of Webgility for Stripe-Xero users

Webgility transforms the basic Stripe-Xero connection into a powerful financial automation system with these key advantages:

• Advanced transaction mapping: Sync individual Stripe transactions with custom rules, allowing categorization based on product type, customer segment, or sales channel for more granular financial tracking
• Detailed financial posting: Post Stripe sales, fees, and deposits to Xero with greater detail than native integrations, including tax management and automatic cost of goods sold tracking
• Automated reconciliation: Sync Stripe payouts with bank feeds automatically, matching individual transactions to bank deposits while handling the complexity of grouped payouts and timing differences between transaction dates and deposit dates
• Advanced reporting capabilities: Enable channel- and SKU-level performance analysis, profitability reports, cash flow forecasting, and real-time business insights with AI-powered analytics and customizable dashboards

Step-by-step guide to connect Webgility with Xero and Stripe

Follow these steps to set up your comprehensive Stripe and Xero integration with Webgility:

1. Connect Webgility Online to Xero Accounting

Connect Webgility with Xero by following these simple steps after connecting your first sales channel in Webgility Online:

• Navigate to Connect to Accounting Software and click Connect Accounting
• Select Xero as your accounting software and click Next
• Click Connect and then Connect to Xero
• Log in to your Xero account. A pop-up will appear for Xero User Consent - choose the organization you want to connect and click Allow Access
• Wait for the success message: Webgility is connected to your accounting system
• Click Finish. Webgility will begin downloading contacts, items, and other data from your Xero organization. This may take a few minutes, depending on your data volume

2. Connect Stripe as a Payment Processor

Connecting Stripe with Webgility is easy; you just need to follow these steps:

• In Webgility Online, navigate to Connections
• Choose Payment Gateways and click the blue Add button (+), and select Stripe
• Click Next and log in to your Stripe account to authorize Webgility
• Grant the necessary permissions to allow Webgility to access your Stripe transactions and data

Once connected, Webgility will sync Stripe payment data, including sales, fees, and refunds, with your accounting workflows

3. Sync and Automate

With both Xero and Stripe connected, Webgility will automatically:

• Sync ecommerce sales, Stripe payments, and fees into Xero.
• Automate bookkeeping, reconciliation, and reporting for all connected sales channels and payment processors

Real-world use case examples

Case study 1: Scaling revenue and order volume for a multichannel seller

A business owner at Bases Loaded, a high-volume online retailer, leveraged Webgility to automate their ecommerce accounting and streamline operations. 

By integrating Webgility with their sales channels and accounting software, they scaled from $1.9 million to $5.5 million in revenue and now process over 10,000 online orders each month. 

The automation eliminated manual bookkeeping, enabling the business to handle rapid growth without adding significant operational resources. 

As the owner stated, "We live in a 24/7 world, and Webgility keeps everything in check even when we are not at our business." Highlighting how real-time syncing of sales, refunds, and fees across multiple channels directly contributed to their ability and helped them grow efficiently.

Case study 2: Accounting firm managing multiple clients with Webgility

Product Bahn operates a complex multichannel business with 7 different shopping carts across Shopify and BigCommerce, representing 5 brands, plus sales on Amazon and other third-party websites.

Before Webgility, daily CSV uploads took up to two hours plus additional time for manual checks and corrections. The complexity increased dramatically during crisis periods - when an earthquake and tsunami struck Japan in 2012, they faced a spike in orders and a major data entry bottleneck.

With Webgility, Product Bahn can now process 50 orders in just five minutes, manage back-office operations for five stores from one dashboard, and easily reconcile all expenses and fees. 

Their head of operations described his "wow moment" when he downloaded 50 orders, hit submit, and five minutes later everything was perfectly synced with purchase orders, sales receipts, classes, and contact information all automatically organized.

Next steps for smarter Stripe Xero integration

Do you think any successful ecommerce business today likes wasting time on double data entry? You know the answer! Yet, many businesses still switch across platforms to update the same information more than once. 

Imagine a deal gets finalized in your CRM, but your finance team doesn't know about it. Payroll gets processed, and then accounting teams struggle to match expenses. These gaps do more than slow things down, they hide key insights about your company's financial health. 

Stripe Xero integration solves this problem. Xero’s built-in Stripe integration allows for easy payment reconciliation and automates basic data syncing, making it a good fit for small businesses or those with low transaction volumes. 

However, if your business is growing, operates across multiple sales channels, or deals with complex accounting needs, you might need a third-party solution that takes care of all your needs. 

Turn your business into a connected financial engine with Webgility!

This is where an ecommerce accounting automation tool like Webgility offers significant advantages: 

• Multichannel integration: Webgility connects not just Stripe and Xero, but also other platforms like Shopify, Amazon, eBay, and WooCommerce, centralizing all your sales, inventory, and customer data in one place
• Advanced automation: It automates detailed order syncing, inventory management, and complex transaction mapping (including fees, taxes, and refunds), reducing manual work and errors
• Real-time analytics: Webgility provides deep financial insights, profit tracking by product/channel, and robust reporting to support smarter business decisions
• Scalability and compliance: Designed for businesses with high transaction volumes and multichannel sales, Webgility grows with you and supports advanced workflows like multi-currency management and tax compliance

Simplify your workflow and keep your books audit-ready to scale without chaos. Schedule a quick demo with Webgility and get started! 

FAQs

Can I change the country setting after connecting Stripe and Xero?

No, the country setting is fixed once the integration is authorized. You’d need to disconnect and reconnect to modify it.

What if I use multiple Stripe accounts?

Xero’s native app supports one account per organization. Webgility can manage multiple Stripe accounts with unique mapping and rules.

How do I handle refunds or chargebacks in Xero?

Refunds processed in Stripe are synced to Xero, ensuring accurate records and reconciliation.

Does Webgility support other payment processors?

Yes. Webgility integrates with PayPal, Shopify payments, Authorize,net, Square, and more, unifying all data into Xero for complete financial control.