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Guide to Rechargly auto-reconciliation
Guide to Rechargly auto-reconciliation

Comprehensive guide to the auto-reconciliation process within Rechargly

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Written by Alex Millar
Updated over 2 weeks ago

How Rechargly’s Clearing House Works


Rechargly automates the reconciliation of invoices and Stripe payouts by using a clearing house account in Xero. This process ensures that payments from clients are correctly matched to invoices without manual intervention. When you set up our auto-reconciliation, a clearing house is created to reconcile the relevant invoices from a Stripe payout.

How Auto-Reconciliation Works:

  1. Client Payment: Stripe charges all clients who have setup their payment method for recurring charges from Rechargly.

  2. Payout to Bank: Stripe deposits a lump sum into your bank account. This lump sum corresponds to multiple invoices in your Xero.

  3. Clearing House Allocation: The relevant invoices are marked as paid towards the clearing house

  4. Fees: The fees that correspond to the payout are automatically assigned to the P&L.

  5. Reconciliation: The payout is transferred from the clearing house to the bank account that was assigned during the auto-reconciliation setup, bringing the balance to zero.

What Happens With Refunds:

When a refund is required, it can be handled through the clearing house. A credit note is raised towards the customer. Rechargly then creates a payment in the clearing house, which brings the balance to zero.

Why Your Clearing House May Have a Non-Zero Balance


1. Unauthorised Transfers or Transactions

  • Issue: Employees may mistakenly allocate unrelated transactions to the clearing house, causing discrepancies.

  • Solution: Educate your team that the clearing house is an automated process. Any manual entries will likely need to be reversed. If a transaction has been incorrectly allocated, identify and correct the entry in Xero.

2. Payments Couldn’t Be Allocated

There are several reasons why a payment might not be correctly assigned to an invoice:

a) Missing Invoice in Xero (Archived Contact)

  • Issue: A client’s contact record has been archived, preventing Rechargly from creating an invoice.

  • Solution: Reactivate the contact in Xero and request Rechargly support to trigger invoice creation again.

b) Payout Can’t Be Allocated Due to Invoice Modifications

  • Issue: A firm employee manually reduced the total of a Rechargly invoice in Xero after it was created. Since the actual payment from Stripe is higher than the new invoice total, Xero rejects the allocation.

  • Solution: Reverse the manual changes to restore the original invoice total, then contact Rechargly support to reconcile the payment.

c) Double Payment Was Processed

  • Issue: A client has paid twice, either due to a manual payment or a duplicate charge.

  • Solution: Notify Rechargly support, who will generate a duplicate invoice to account for the extra payment. You can then refund the invoice through Rechargly or apply a credit to a future invoice.

d) Invoice Marked as Paid Outside of Rechargly

  • Issue: A Rechargly invoice has been manually marked as paid in Xero before auto-reconciliation occurs.

  • Solution: The payment needs to be reversed so Rechargly can complete the reconciliation process correctly.

3. Other

If the auto-reconciliation fails for another reason, the support will notify you by email with the steps to fix.

Best Practices and Tips


Below are a handful of tips that will ensure you have minimal interruption with your auto-reconciliation.

1. Avoid Sending Invoices from Xero

Rechargly handles payment reminders automatically. If you send individual invoices manually from Xero, it increases the likelihood of a duplicate payment in the future. If you do send invoices manually and they are paid, please ensure you go to Rechargly and mark the invoice as paid outside of the platform.


2. Use a Dedicated Rechargly Invoice Template

During setup, we recommend creating a Rechargly-specific invoice template that does not have any payment methods attached. It reduces the likelihood of double payments occurring.


3. Educate Your Team on Rechargly’s Role

Ensure that firm employees understand how Rechargly manages software disbursements. If they see an invoice related to software, they should check before making any changes to prevent reconciliation issues.

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