How to reconcile Stripe payouts in FreeAgent

Every few days, Stripe sends a payout to your bank account. That payout is the net result of all your recent charges, minus fees, minus refunds. Reconciling it in FreeAgent means explaining where that money came from, and making sure your accounts reflect the full picture, not just the lump sum that hit your bank.

Here's how the process works, what most people get wrong, and how to make it less painful.

What's inside a Stripe payout

A single payout might contain dozens of individual transactions:

• Charges: payments from your customers
• Fees: Stripe's cut on each transaction (typically 1.5% + 20p for UK cards)
• Refunds: money returned to customers
• Currency conversions: if you received payments in a currency other than your settlement currency
• Other adjustments: disputes, Stripe Connect application fees, and so on

Your bank statement shows one deposit. Your accounts need to show all of it.

The manual approach

If you're doing this by hand, you'll need to:

1. Log into Stripe and find the payout
2. Work out which transactions make up that payout
3. For each charge, create or find the corresponding invoice or income entry in FreeAgent
4. Record the Stripe fee for each transaction as an expense (usually under "Bank & Finance Charges")
5. Record any refunds as credit notes or sales refunds
6. Explain the payout in your bank account as a transfer from your Stripe balance

Step 2 is harder than it sounds. If you're on automatic payouts (the default), Stripe shows you which transactions are included in each payout. But if you're using manual payouts, Stripe doesn't break down the payout by transaction. You'll need to cross-reference the payout amount against your balance transactions for that period to work out what's included.

For a business processing even a modest volume through Stripe, this adds up to hours of work every week. And if you fall behind, you're reconciling weeks of transactions at month-end.

Where this goes wrong

The most common mistakes with manual reconciliation:

Recording the payout as revenue. The payout amount is net of fees and refunds. If you book it as income, you're understating your costs and potentially misreporting your revenue.

Ignoring fees. Stripe fees are a real business expense. If they're not on your P&L, your margins look better than they are. Over a year, a business doing £100k through Stripe is paying £2,000+ in fees.

Lumping everything into one category. If you sell multiple products, your P&L should break down revenue by product. Recording a single "Stripe payout" line tells you nothing about which products are driving your business.

Falling behind. Manual reconciliation only works if you keep up with it. Once you're a month behind, spotting errors becomes much harder.

Using FreeAgent's built-in Stripe feed

FreeAgent has a native Stripe integration that explains your Stripe transactions in a dedicated bank account. It's worth understanding what it does and doesn't do.

What it does:

• Creates a bank account in FreeAgent for your Stripe transactions
• Explains charges, fees, and refunds on your GBP Stripe balance
• Lets you match transactions against existing FreeAgent invoices

What it doesn't do:

• Explain transactions in any non-GBP currency
• Mirror Stripe invoices in FreeAgent
• Categorise revenue by product
• Handle Stripe-generated invoices or credit notes

If your workflow is "create invoice in FreeAgent → customer pays via Stripe link", the native integration works reasonably well.

But if you're running subscriptions, using a third-party platform that processes payments through Stripe, or taking payments via Stripe Checkout, your revenue doesn't start in FreeAgent. You'll still be doing most of the reconciliation work manually.

How ClearingHouse handles it

ClearingHouse takes a different approach. Instead of working backwards from payouts, it syncs each transaction as it happens in Stripe.

Clearing accounts. ClearingHouse creates a clearing account in FreeAgent for each currency in your Stripe balance. Every balance transaction (charges, fees, refunds) is recorded individually in the clearing account, categorised and explained.

Per-product categories. You can map each Stripe product to a specific FreeAgent accounting category, so your P&L breaks down revenue the way your business works.

Invoices and payments. When a Stripe invoice is finalised, ClearingHouse creates a matching invoice in FreeAgent with the same line items, discounts, and taxes. When payment comes in, the clearing account transaction is explained as an invoice receipt.

Fees. Every Stripe fee is recorded as a separate expense in the clearing account, assigned to "Bank & Finance Charges". No fees go missing from your P&L.

Refunds and credit notes. Refunds are explained as sales refunds. Stripe credit notes create matching credit notes in FreeAgent with the same line items.

Payouts. When Stripe sends a payout to your bank, it's a simple transfer from the clearing account to your bank account. ClearingHouse waits for your bank feed to update, then explains the transaction automatically.

Because each transaction is already recorded and categorised by the time the payout arrives, reconciliation is just confirming that the transfer matches, not unpicking what's inside it.

Which approach is right for you?

If you're processing a handful of Stripe transactions per month and they're all from FreeAgent invoice payment links, the manual approach or FreeAgent's native integration is probably fine.

But if you're running subscriptions, using Stripe Checkout, processing payments in multiple currencies, or just tired of spending time on something that should be automatic, it's worth setting up ClearingHouse. It takes a few minutes, and your reconciliation workload drops to near zero.