Prepared by DJB Accounting ·
The amount a card provider pays into your bank may be lower than the payments collected from customers. Fees, refunds, disputes and settlement timing can all affect the transfer. Recording the bank deposit alone can leave your sales and costs incomplete.
A simple payout example
This illustration assumes all the transactions below settle together, with no opening balance, reserves or other adjustments.
| Movement | Amount |
|---|---|
| Card payments collected | £1,000 |
| Less customer refunds | £50 |
| Less processor fees | £20 |
| Paid into the bank | £930 |
The £930 is a transfer from the payment provider to the bank. It does not, by itself, explain the original sales, refunds or fees. This is a cash reconciliation example, not a VAT calculation or a client case study.
How to check the difference
- Start with the sales records. Gather till summaries, invoices or order reports, including refunds and credit notes. Separate cash and card takings.
- Obtain the payment provider reports. Identify customer payments, fees, refunds, disputes, transfers and money still held by the provider.
- Match each payout. Compare the transactions included in that settlement with the amount received in the bank. The sale date and bank receipt date can differ.
- Reconcile the remaining balance. Opening funds held, plus payments collected, less refunds, fees and payouts, should explain the closing provider balance, allowing for any other recorded adjustments.
- Resolve differences before closing the period. Look for missing reports, duplicate entries, failed payouts or settlements crossing month-end. Keep a note of the explanation.
Which reports should I use?
Choose reports for your provider and payout arrangement. Stripe's payout reconciliation report supports automatic payouts. Manual or instant payouts can require a different approach, such as reviewing the balance and transaction history. Check Stripe's report guidance for your arrangement.
Does the bank payout determine the VAT?
No. The deposit is not enough to determine the VAT treatment of the underlying transactions. Your supplies, VAT scheme, timing and supporting evidence need to be considered. Do not assume that all sales, refunds or payment fees carry the same VAT treatment. See HMRC's VAT record-keeping guidance and discuss your circumstances with your accountant.
What should I send my accountant?
Provide the sales reports, itemised payment activity, payout reports, provider balances and bank statements for the same period. Include explanations of unusual refunds or disputes. This gives us a clearer route from the original transactions to your bookkeeping.
DJB Accounting supports businesses in Antrim and Northern Ireland with VAT and bookkeeping, retail and hospitality accounts and management reporting. Use our bookkeeping checklist to organise your regular records.