The MP Xero Connector is flexible in terms of which accounts of your business are used when posting invoice payments, and adding any optional surcharges. The following is for demonstration how the accounting can be handled following Xero best practices.

For the standard accounting it is recommended to add a Mobipaid clearing or suspense account to the charts of accounts. This would be a Current Asset with "Enable payments to this account" activated.

The accounting entries are then as follows:

If you opt to add an automated surcharge of, for example 4% to recover bank charges, then in addition to the Mobipaid clearing account you may wish to add another account to your charts of accounts to provide for the bank charges. In this example, we call this account "Bank dues".

The accounting entries are then as follows:

Transaction	Amount	Debit	Credit
Invoice issued	$100.00	Accounts Receivables	Sales
Surcharge	$4.00	Accounts Receivables	Bank dues	automated
Payment	$104.00	Mobipaid Clearing	Accounts Receivables	automated
Mobipaid settlement	$100.00	Bank account	Mobipaid Clearing
Bank charges	$4.00	Bank dues	Mobipaid Clearing

If the "Bank dues" account reflects an over- or under-recovery balance, this can then be posted through the income statement.