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How to reconcile PayProp settlements to Xero, QuickBooks or Sage

A PayProp settlement is one net number hiding a dozen moving parts. Here's what's inside it, how it lands in your accounts, and where the three accounting systems pull apart.

What's actually in a settlement

The figure that hits your bank is the end of a sum, not the start of one. A typical day's settlement contains:

• Income — rental commission plus your other fees (management, end-of-tenancy, inventory, marketing, change-over). Each one is its own category.
• PayProp's fees — service, transaction, integration. These come off, so they're deductions.
• Contractor recharge margins — your markup on any contractor work recovered from landlords that day. (More on the mechanics in secondary payments & contractor recharges.)
• The net payout — what's left, paid to the agency's bank.

Reconciling means putting all of that back together in your accounts so the income, the costs, the VAT and the bank movement all agree — not just stamping the net number against the bank line and hoping.

The shape of a clean posting

However you slice it, a reconciled settlement is four things:

1. An income document — one line per fee category, each posting to the right account with the right VAT rate.
2. The PayProp fees — recorded as deductions so the net works out.
3. The recharges — gross income plus a per-contractor credit note that nets them down to your margin (keeping the VAT on both legs visible).
4. A payment — the net amount into the bank account, with the day's breakdown attached as your audit trail.

Where Xero, QuickBooks and Sage differ

The economics are identical across all three — same income, same fees, same VAT, same net. What changes is the document shape each system wants.

The QuickBooks journal has a quirk worth knowing: the VAT has to be a single line per rate, signed by direction (output negative, input positive). Put a tax line per income line instead and the journal won't balance. Xero and Sage avoid that by using a real invoice, which carries the VAT per line for you.

Getting the VAT right

Each income line carries its account's VAT rate — most agency fees are standard-rated, but not all, so map the rate on the account, not by assumption. Contractor recharges are the fiddly bit: the income leg carries output VAT, the cost leg carries reclaimable input VAT, and the rate follows the contractor's real status rather than a flag on the report. That's its own subject — see the recharges guide for the worked example.

Why a settlement won't reconcile

When the numbers don't agree, it's nearly always one of these:

• An unmapped category — a fee type with no account behind it, so its income never posts.
• Missing fees — PayProp deducted something your figures didn't see.
• Recharges in net, or not at all — the margin's missing, so you're short by exactly that amount.
• A phantom event — PayProp sometimes emits a zero-amount marker alongside the real settlement; count it and the day looks like two settlements.
• Data not synced yet — the income or contractor rows simply aren't in your local copy of the payments report yet. Re-checking won't fix that; the data has to be pulled in first.

The quickest diagnosis is the cross-check from earlier: how far off is your calculated net from PayProp's settled figure, and does that gap match one of the above?

Common questions