The Most Important Thing You Need to Know About Square’s Debit Card


Square's new business debit card provides easy, no-fee access to cash but adds some complexities to your accounting. We provide some tips for managing this and learn how bookkeep.com™ can help.

Written by Jason Richelson
April 20, 2021

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Square recently released a new business debit card that connects to your Square balance. I thought I’d try it in my wine store, and discovered some things you ought to know about it.

What I like

When they say no fee, they mean NO fee. The Square Card itself is free to order and customize, and there are no annual or monthly fees. The card itself also makes no charges to use any ATM, and is accepted anywhere Mastercard is. In my experience, it’s the perfect card to keep on hand in your register for managers and employees to use for petty cash.

It’s also great because the card spend is reported in a system that you and your team already have access to, your Square Dashboard, so if your manager needs to check what an employee spent on an item for the store, the information is available in the Square app.

What needs some work

While it is helpful to have on hand, there are a few important things to remember when using the Square Card.

Don’t bounce your payroll!

If you’re a regular Square user, you know that funds from Square transfer automatically to your bank account. Once you turn on the Square Card however, this is no longer the case. Let me say that again, once more with feeling: if you have the card turned on, funds will not automatically transfer. Money will no longer flow into your account until you send it manually, so if you need that cash for payroll, you need to be on top of bank transfers so that there are funds to pay your employees. To make those transfers you go to the dashboard page in Square.

The reporting will confuse you and your bookkeeper

Fees, loan payments and other daily transactions reduce your balance. While the balance reflects these fees, there is no report that actually explains how the balance is adding up and what transactions are being taken into account. When you see a line on the all activity report here that says “Sales” note that actually that is really “Sales - Fees - Loan Payments - Refunds - Disputes”. In addition, Square’s balance transaction reporting time period did not match my sales reporting time period, which can certainly lead to confusion for you and your bookkeeper.

We asked Square about this and they told us that later this year expanded reporting will come that breaks out all these other amounts which is great to hear.

It’s hard to book the spend transaction because there is no automation.

There is a report on card spend found here, and it can be downloaded to a CSV file, but there is no way to automate the entry of these expenses to your QuickBooks Online or Xero. So if you needed to actually use this data in your bookkeeping, you would need to export it and then manually enter it into QuickBooks.

How we can help

As more businesses adopt the Square Card, more bookkeepers will be forced to handle these issues, and that friction can waste a lot of time and money. Fortunately, we’re here to help. bookkeep.com™ can help iron out some of these wrinkles in the process. While Square won’t show you fees, our service will book those fees daily to QuickBooks Online and Xero. We also book the loan payments for Square Capital and any other fees or adjustments to your balance.

Another tricky issue is the Card Spend tab in Square. This is a downloadable report intended to track your transaction history with the Square Card. We include a link to that report directly in the daily fees journal entry we post so you can very quickly see if there is card spend to book without having to click several times to find it.

The Square Card is a perfect example of a technology innovation that aims to make running your business easier, but can make accounting more challenging, time-intensive and expensive. This is exactly where the service bookkeep.com™ comes in, to iron out these issues so you won’t have to.


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