Key takeaways
What this article covers, in order:
- The problem in one payout
- What's inside a payout
- A worked example: one Stripe payout
- The clearing account approach
- PayPal: treat it like a bank account
- SumUp: card takings and daily payouts
When Stripe, PayPal or SumUp pays you, your bank only sees one lump: the net payout, after fees and refunds have been taken off. To get your books right you need to record what's behind it: the gross sales, the fees as a cost, and any refunds, so that those parts add up to exactly the amount that hit your bank. For Stripe reconciliation, and for PayPal and SumUp, the processor's payout report gives you the breakdown. A simple "clearing account" makes it tidy.
The problem in one payout
Ellie runs a small online yoga studio from Bath. Students pay for classes by card through Stripe. On Monday a payout of £1,180.65 lands in her bank.
If she records £1,180.65 as sales, she's wrong in two directions at once:
- Her sales are understated, because she actually sold more than that.
- Her costs are understated, because the processing fees have vanished.
Her profit happens to come out the same. But her sales figure is too low, and she has no idea what card processing is costing her each year. That's a real number worth knowing.
What's inside a payout
Every processor works a bit differently, but a payout is nearly always made up of the same ingredients:
| Ingredient | Effect on the payout | Where it belongs in your books |
|---|---|---|
| Gross sales (what customers paid) | Adds | Sales |
| Processing fees | Subtracts | Bank and card charges |
| Refunds to customers | Subtracts | Reduces sales |
| Chargebacks and their fees | Subtracts | Reverses sales; fee to card charges |
| Reserves or holds | Subtracts (temporarily) | Stays in the processor balance |
| Other adjustments | Either way | Depends on what they are |
The net payout is what's left. Your job is to make sure the pieces add up to that figure.
A worked example: one Stripe payout
Here's the breakdown from Ellie's Stripe payout report. The fees are illustrative; check your own report for the real ones.
| Item | Amount |
|---|---|
| Class booking, Sam | £400.00 |
| Class booking, Ruth | £550.00 |
| Class booking, Imran | £300.00 |
| Gross sales | £1,250.00 |
| Refund to a student | −£50.00 |
| Processing fees | −£19.35 |
| Net payout to bank | £1,180.65 |
Check: £400.00 + £550.00 + £300.00 = £1,250.00. Then £1,250.00 − £50.00 − £19.35 = £1,180.65. That matches the bank.
So in her books for this payout:
- Sales: £1,250.00
- Refunds (reducing sales): £50.00
- Card processing fees: £19.35
- Money into the bank: £1,180.65
Net sales are £1,200.00, the cost is £19.35, and the profit effect is £1,200.00 − £19.35 = £1,180.65, the same as the cash. Everything ties.
The clearing account approach
For businesses with more than a few payouts a month, many bookkeepers use a clearing account for each processor (for example "Stripe clearing"). Think of it as a holding pen that represents money sitting with the processor.
- Sales are recorded into the clearing account at the gross amount.
- Fees and refunds are recorded out of the clearing account.
- When the payout lands in your bank, it's recorded as a transfer from the clearing account to the bank.
If all three are right, the clearing account comes back to zero after each payout (or to whatever balance is still sitting with the processor). If it doesn't, something's missing.
For Ellie's payout above:
| Step | Clearing account | Running balance |
|---|---|---|
| Gross sales in | +£1,250.00 | £1,250.00 |
| Refund out | −£50.00 | £1,200.00 |
| Fees out | −£19.35 | £1,180.65 |
| Payout to bank | −£1,180.65 | £0.00 |
Zero. Done. It's an extra step, but it turns "I think that's about right" into "I know it's right".
PayPal: treat it like a bank account
PayPal is a bit different, because money can sit in your PayPal balance for a while, and you can spend straight from it. Ellie buys yoga mats from a supplier with her PayPal balance, so that money never touches her bank.
The cleanest way is to treat PayPal as its own account in your books, like a second bank account:
- Sales come in to the PayPal account (gross).
- Fees go out of it.
- Purchases made from your PayPal balance go out of it, categorised as normal costs.
- Transfers from PayPal to your bank are transfers between two of your own accounts.
At month end, the PayPal account in your books should match the balance PayPal shows you. That's a reconciliation, just with a PayPal statement instead of a bank statement.
Say Ellie's PayPal for Sep 2026 looks like this:
| Item | Amount |
|---|---|
| Opening balance, 1 Sep 2026 | £120.00 |
| Gross sales received | £860.00 |
| PayPal fees | −£29.84 |
| Yoga mats bought from balance | −£214.16 |
| Transfer to bank | −£600.00 |
| Closing balance, 30 Sep 2026 | £136.00 |
Check: £120.00 + £860.00 − £29.84 − £214.16 − £600.00 = £136.00.
Only the £600.00 transfer shows up in her bank. Everything else lives in the PayPal account.
SumUp: card takings and daily payouts
If you take card payments in person on a SumUp reader, you'll usually get regular payouts of the day's (or several days') card takings, less fees. The logic is identical to Stripe: gross takings to sales, fees to card charges, net payout into the bank. Use the payout report to see which days' takings each payout covers, because a payout that lands on a Tuesday might include Friday, Saturday and Sunday.
If you also take cash, keep cash takings separate. Mixing them is how a café ends up with sales figures nobody can explain.
Common snags
- Payouts cover several days. Match each payout to the transactions it includes, not to the day it lands.
- Payouts straddle a month end. Sales on 30 Sep 2026 may be paid out on 2 Oct 2026. With a clearing account, the money sits there at month end and the clearing account balance should equal what the processor still owes you.
- Refunds bigger than sales. On a quiet day, refunds can exceed sales and the processor may take money from your bank instead of paying in. Same logic, other direction.
- Fees on refunds. Processors handle fees on refunded payments differently. The payout report is the source of truth, not your assumption.
- Currency. If you get paid in euros or dollars through a processor, the conversion and its fee are part of the picture too.
A monthly processor checklist
- [ ] Download each processor's payout report for the month
- [ ] For each payout: gross sales − refunds − fees − other = net payout
- [ ] Check the net payout matches the bank line exactly
- [ ] Record fees as a cost, not netted off sales
- [ ] Check any clearing account balance equals what the processor still holds
- [ ] For PayPal, reconcile the PayPal account to the PayPal closing balance
How HelloBooks helps
HelloBooks works from your bank side. Connect your bank through Open Banking (most UK banks and cards), or import a CSV statement, and each net payout comes into the review list like any other transaction. You use the processor's own payout report to record the gross sales, fees and refunds behind it, so the pieces add up to the amount in the bank.
At month end, the reconcile screen lines your bank statement up against your ledger, with an AI match suggestion on each line, a confidence score and why it picked that match, and you work through only the exceptions. The reconciliation report (opening balance, cleared items, outstanding items, closing balance) exports as PDF or CSV for your accountant. If you're also on Pro, multi-currency with automatic FX helps when payouts come in other currencies. For online sellers, see the e-commerce sellers page and bank reconciliation software.
FAQs
Should I record the net payout or the gross sales?
Gross sales, with fees and refunds recorded separately. Recording only the net payout understates both your sales and your costs.
What is a clearing account?
A holding account that represents money sitting with a payment processor. Sales go in at gross, fees and refunds come out, and the payout moves the rest to your bank. After each payout it should return to zero or to the processor's remaining balance.
Why doesn't my payout match one day's sales?
Most processors pay out on a schedule that can include several days of sales, minus refunds and fees. The payout report shows exactly which transactions are included.
How do I handle PayPal if I spend from the balance?
Treat PayPal as its own account in your books. Record sales, fees and purchases there, and treat money moved to your bank as a transfer. Reconcile it to PayPal's balance at month end.
Where do processing fees go?
In a cost category such as bank and card charges. Keeping them separate shows you what taking card payments really costs.
Get the gross, the fees and the payout to agree once, and every payout after that becomes a two-minute job.
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