How to set up Paystack on Xero

Xero is a powerful online accounting software solution, and with our Paystack integration, you can now use Paystack as a payment provider to accept invoice payments for your business.

1. Go to this link to connect your Xero account to Paystack.

2. Click on the 'Connect to Xero' button. This will redirect you to Xero's login page, and once you've signed in with your user account, you'll be asked to grant Paystack some of the permissions required for the app to work.  If you still need to create a Xero organisation, you will see the image below, meaning you'll need to create a new one first.

3. Click 'Allow access' to be redirected to the configuration page to set up your integration.
   
   

4. To continue the configuration, click 'Switch to new invoicing'.

5. You'll need to set up your Accounts (accounts used to reconcile your Paystack payments in Xero). We've created an account you can use for your Paystack fees, and this will be selected by default, but you can change it if necessary.
   
   You'll also need to select your Payout Account. This should be the bank account in your Paystack where payouts are deposited. If you don't have your Paystack payout account created in Xero yet, follow this guide to create the bank account and return to the Xero-Paystack configuration page to choose the created account.

The next step is to enable Paystack for your invoice branding themes. You can click the toggle beside the 'Standard' option. When enabled, the 'Pay Now' button on your invoices will take your customers to a Paystack payment page to complete their payment.Once this is done, you'll see Paystack set as the payment service in your Xero invoice settings.

1. The last thing to configure is your API Keys. You can get these from the Settings page on your Paystack Dashboard. 

Copy your secret and public API keys from your Dashboard, paste them into their respective fields and click on 'Save Changes.' You can also use your test keys to test the app, but be sure to switch to your live keys when you're ready to accept payments.

Now that you're all set up, you can send invoices with the option for your customers to pay with Paystack by following these steps:

1. When you create an invoice and fill in all the details, the Paystack option is enabled by default.

   

   You can confirm this by clicking on the 'Manage online payments' button.

   

2. You'll see a modal with Paystack already checked, but in case it's not, select the option and click done. With this enabled, your customers will have the Pay with Paystack option on their invoices.

Three accounts in Xero keep records of all transactions done via Paystack.

• Paystack Clearing Account: This is a bank account created automatically by Paystack when you set up your integration. It records all transactions, fees, and payouts.

• Paystack Fees Account: This expense account tracks all transaction charges for Paystack transactions. The default account used is automatically created and called Paystack Fees, but you can change this on the configuration page.

• Payout Account: This is the bank account used for recording payouts made to your business by Paystack. The bank account to be used can be selected on the configuration page.

When a customer makes a payment on an invoice, this is instantly recorded as a credit in the Paystack Clearing Account and auto-reconciled. Payments throughout the day will continue to accrue in the clearing account.

On the next settlement day, between 1:00 AM and 3:00 AM GMT, all payments are recorded, and a bank transfer of the total amount, minus transaction fees, is made from your Paystack Clearing account into the Payout account you've selected.

The transaction fees are recorded as a debit in the Paystack clearing account and as a credit in the Paystack Fees account. This is also auto-reconciled.

The bank transfer created for the daily payout is recorded as a debit in the clearing account and as a credit to the payout account.

When you receive the credit notification in your bank account, you'll need to go back to your Xero dashboard to reconcile the transfers. You can do this by following these steps:

1. Under the Accounting menu, click on Bank Accounts, then select Paystack Clearing Account. Here, you'll find a line item describing Bank Transfer to [Payout Account]. Click on that item.

2. This will take you to a page showing the details of the transfer. In the top-right menu, click on Options, then Mark as Reconciled.

   

3. Next, you'll have to reconcile the transfer line item in the payout bank account. Go back to Bank Accounts, then select your payout bank account. Here, you'll find a line item with the description Bank Transfer from [Paystack Clearing Account]. Click on that item.

This will take you to a page showing the details of the transfer. In the top-right menu, click on Options, then Mark as Reconciled. 

If you encounter any issues while integrating the plugin, please contact us at techsupport@paystack.com or via our contact form.