Square POS
Point-of-sale system used by Pride of Our Footscray for all transactional processing (card payments, cash, bank transfers, tips, gift cards). Integrates to Xero via Amaka middleware.
Settlement Mechanics
Square processes card payments throughout the day. At end of business, Square batches all transactions and initiates a single next-business-day payout to the linked bank account. The payout amount is net of processing fees (~1% in Australia).
Settlement structure:
- Gross amount: Total card transaction value
- Processing fee: ~1% of card gross
- GST refund on fee: Effectively reduces fee to ~0.9% net
- Net payout: Gross minus fee plus GST refund
- Settlement timing: Next business day in Australia
Revenue Categories
Square POS records transactions by tender type:
- Card payments: Processed via settlement flow
- Cash payments: Marked as “Cash” on register (manually entered by staff)
- Bank transfers: Marked as “Other Tender” (customers paying via direct deposit)
- Tips: Recorded separately; tips liability to staff
- Gift cards: Recorded as liability until redeemed
- Discounts: Applied at register; contra-revenue
Account Structure
| Square Account | Xero Clearing Account | Purpose |
|---|---|---|
| Card payments | SQ-000000 Square Balance | Clears daily card settlements |
| Cash payments | SQ-600000 Square Cash Clearing | Clears cash register takings |
| Bank transfers | SQ-600002 Other Payment Clearing | Clears customer bank transfer payments |
| Tips | SQ-800000 Square Tips | Tips payable to staff |
| Gift cards | SQ-800001 Square Gift Card | Gift card liability |
Revenue Recognition (via Amaka)
Daily Sales Sync:
- Amaka creates invoice for each day’s POS activity
- Breaks out revenue by category: SQ-200000 (Square Sales), SQ-200001 (Discounts), SQ-200003 (Service Charges)
- Includes GST
- Receivable side splits by payment type and clears respective clearing accounts
Settlement Sync:
- When Square deposits net payout to bank, Amaka creates bank transfer from SQ-000000 to bank account
- Amaka creates bill for processing fees coded to SQ-300000 (Square Fees)
- Allows bank deposit to match against clearing account transfer (not revenue directly)
Current Issues
Issue 1: Cash clearing (SQ-600000)
- Staff ring Zeller card payments as “Cash” on Square POS (Zeller terminals not integrated)
- Amaka debits SQ-600000 for “cash” amount
- Zeller settlement then arrives at bank and is also coded to SQ-600000 (double-hit)
- Result: SQ-600000 shows $65,829.45 credit balance (should trend toward $0)
- Affects ~30 transactions in FY25; ~$208,965 miscoded
Issue 2: Bank transfers (SQ-600002)
- Customers paying by bank transfer marked as “Other Tender” on Square POS
- Amaka creates invoice debiting SQ-600002
- But when bank transfer arrives, bookkeeper codes it directly to revenue (account 200)
- Result: Revenue recognised twice (Amaka invoice + bank receipt)
- SQ-600002 shows $27,968.32 debit balance (should trend toward $0)
- Balance has nearly doubled since FY25 audit ($15,894 → $27,968)
Uncategorised Transaction Problem
Added 2026-04-11 per Mat O’Keefe and Shae, meeting 11 April 2026.
Problem: Staff (including Mat and Mon) frequently enter transactions as uncategorised dollar amounts rather than selecting the correct menu item. Root cause: the Square terminals are physically small — “made for little Vietnamese 18-year-old bar staff” — and slow to navigate menus. Staff with larger hands or reduced patience bypass the menu and type “$20” directly.
Impact: Destroys data quality for sales mix analysis. Without proper categorisation, it’s impossible to determine what products are selling, calculate COGS accurately, or optimise the menu.
Decision (confirmed 11 Apr 2026): Replace small terminals with iPads behind the bar. Mat: “The solution. Yeah, that’s the solution. I think we need to have one or two iPads out there.” iPads provide larger screens, faster navigation, and support QR code scanning for members/shareholders. The fancy PinTuna-integrated registers remain for the rare member/shareholder scan use case, but day-to-day transactions move to iPads.
Xero Reconciliation Progress (11 Apr 2026)
Added 2026-04-11 per Shae, meeting 11 April 2026.
Square Balance zero account ($4.67M phantom balance): Resolved. The balance accumulated because there is no automated Amaka reconciliation for this account — bank statements must be manually imported. Shae built an automated monthly import process. This is now nullified as an ongoing issue.
General Xero reconciliation: Down from 1,200 unreconciled transactions to 379 (as of 11 Apr 2026). Process: Shae using Claude Chrome with three tabs open, cross-referencing each transaction against Xero setup guides, effectively running three independent bookkeeper verification streams.
Lending Products
Square offers lending products based on weekly revenue (not P&L). Has lent up to $250,000 per location in the hospitality sector. Currently not utilised by Pride, but represents potential cash flow tool if revenue stability improves.
New Features and Recommendations (April 2026)
Square AI (Free — Activate Now)
Conversational business intelligence launched in Australia March 2026. Ask questions in plain English about sales trends, best sellers, and peak hours directly from the Square Dashboard. No additional cost.
Square Loyalty ($49–99/month)
Recommended replacement for PinTuna. Native POS integration — loyalty happens automatically at every transaction. Phone number only (no app download). Members spend 53% more and visit 40% more often. 30-day free trial. Victorian liquor note: structure rewards around entry, access, food vouchers — not free drinks.
Square Restaurant Inventory by MarketMan ($278/month)
AI invoice processing, deep native Square integration. Just launched in Australia April 2026. Alternative to Loaded for inventory/COGS tracking.
See Tech Stack Optimisation for full recommendations.
Related Pages
- Amaka — middleware that syncs Square to Xero
- Revenue Model — Pride’s revenue streams and trading patterns
- Clearing Account Cycle — how temporary clearing accounts work
- Square Cash Clearing Issue — Zeller EFTPOS miscoding detail
- Other Payment Clearing Issue — bank transfer revenue double-count
- Square Capital Loans Issue — historical Square Capital lending facility
- Tech Stack Optimisation — stack assessment
- Melbourne Venue Tech Stack Research — source: tool evaluation