Substack, Stripe and FreeAgent: recording your paid subscriptions properly

If you run a paid Substack, you set up a Stripe account when you switched paid subscriptions on. Your readers pay into that account and Stripe pays you out to your bank. Substack takes its cut along the way, and so does Stripe.

All your bank statement shows is the payout, with both cuts already gone. If FreeAgent only ever sees the payout, your income and your costs are both understated.

What Substack and Stripe each take

Substack's own help centre puts its fee at 10% of subscription revenue. Stripe charges its own processing fees on top of that:

• Card processing: Stripe's standard rate (1.5% + 20p for standard UK cards, more for international cards)
• Stripe Billing: an extra percentage on recurring payments, because subscriptions run on Stripe Billing

So a £5 monthly subscription paid with a UK card works out roughly as:

• Reader pays: £5.00
• Substack's fee: £0.50
• Stripe's fees: roughly £0.30
• You receive: roughly £4.20

That's about 16% of the subscription gone before it reaches your bank. It's worth seeing on your P&L.

Where it shows up in Stripe

The account Substack set up is a normal Stripe account in your name, and you can log into its dashboard. Open any successful payment and you'll see:

• The charge: the full amount the reader paid
• The fee breakdown: Stripe's processing fee, plus Substack's fee if it's collected through Stripe
• The net amount: what's left for your next payout

If your subscriptions are billed through that account too, each billing period generates a Stripe invoice for the reader.

Recording it properly in FreeAgent

Record the full subscription price as income. If a reader pays £5, your sales figure is £5, not the £4.20 that reaches your bank. Booking the net amount makes your publication look smaller than it is, and hides what Substack costs you.

Record Substack's fee and Stripe's fees as expenses. They're both genuine costs of running a paid publication. Keeping them as their own entries means you can see what each is costing you each year.

Use a clearing account between Stripe and your bank. Subscriptions, fees and refunds go into the clearing account as they happen, and each payout is a transfer from the clearing account to your bank. Our guide to Stripe clearing accounts covers how this works, and reconciling Stripe subscriptions in FreeAgent covers the subscription side in more detail.

How FreeAgent's native Stripe integration handles this

FreeAgent's built-in Stripe feed brings in balance transactions for you to explain like a normal bank feed. It won't create invoices for your Substack subscribers, and it won't separate Substack's fee from Stripe's. You'll be categorising each one by hand. We've written up what the native integration does and doesn't do.

How ClearingHouse handles it

ClearingHouse connects to the Stripe account behind your Substack and syncs it into FreeAgent:

• Each subscription invoice in your Stripe account becomes a matching invoice in FreeAgent, paid from your Stripe clearing account.
• Each fee on a payment is recorded as its own expense, using Stripe's description. If Substack's cut shows up in the fee breakdown, it's recorded separately from Stripe's processing fee, so you can see who took what. Both currently land in FreeAgent's Bank & Finance Charges category.
• Payouts are recorded as transfers from the clearing account to your bank, so they reconcile cleanly.
• Readers paying in other currencies go into a separate clearing account for each currency in your Stripe balance.

If you have other income running through Stripe, such as consulting or a course, you can map each Stripe product to its own FreeAgent category so your Substack revenue sits on its own line.

Substack is one of many platforms that run payments through your own Stripe account. If you use others, here's what that means for FreeAgent in general.

Getting started

If you write on Substack and keep your books in FreeAgent, ClearingHouse takes a few minutes to set up. It records every subscription, fee and payout for you, so you don't have to explain them one by one.