If you use Square as a point of sales device then it is possible to link Square to Xero automatically, but you just need to be careful and get your initial settings correct when you first connect the accounts ...
Firstly, it's pretty straighforward to link Square to Xero. In Xero, in the left-hand side menu, go down to App Marketplace and search for Square then either connect to your existing account or set up a new account from here.
You will need to tell Square which VAT codes you are using for the different sales types and charges. There is quite a long list, but in simple cases, you will only use one or two of them. You also need to tell Square which bank account the balancing payments will be paid to.
The system is actually quite clever with how it works. Square raises an invoice for each day's takings and posts them to account codes it has created in Xero to split the income types by VAT code. It then marks these invoices as paid and posts the payment to a new bank account it has created in Xero for you called Square Balance. At the same time Square creates a bill for the commission charges and marks that as paid to the same Square Balance account.
The balance of the monies, the invoice paid less the charges, is then transferred to your bank account and the system puts in a bank transfer for you. So, when you reconcile your main bank account you can match the income from square against these transfers.
I recently helped a client set up the Square To Xero link and there was a rogue balance of around £300 which needed sorting. It took a bit of head-scratching and checking Xero against Square, but we found in the sync process an invoice and an unrelated payment had been duplicated. We needed to delete these payments using 'remove and redo' in the square balance bank account, then also void the associated duplicated invoice and bill to get everything clear.
The other issue with my client was that they had accidentally set all sales in Xero to No VAT when they should have been 20% VAT. It was only on checking the import this was spotted, so we were able to correct the Square settings going forward and use the 'find and recode' function in Xero to correct all the invoices already imported.
The moral of my story is these integrations can save you time and money if they have been set up correctly. I have seen a few right royal mess-ups when the client has not understood the bookkeeping principles behind the apps they are using.
So, if you are using Square (or other apps) and want to link Square to Xero, you may need a bit of support to get it set up or even to sort out a mess from the past. My hand holding sessions will show you how to get it all sorted.
If anything I've written here resonates with you, call me on 01604 420057 and let's see how we can help you.