Merchant reserves and payout holds: reconcile funds not yet released

Separate documented reserve funds from processing fees and ordinary unsettled payments. Record what the provider withheld, what it released and what remains held, using the notice and balance detail. Treat an expected release as conditional until its terms and status support the forecast. Held money can explain a smaller payout without being a new expense or a missing customer payment.

Use the provider's balance detail and account notice to complete this worksheet. Release dates remain conditional on the terms shown for your account.

Identify the type of hold first

Open the account notice through the provider's secure dashboard. Is it a rolling reserve, a one-off hold, an information request or an ordinary payout still within its schedule? Record the provider's wording and terms. If no hold is documented, start with the missing-payout trace.

Square describes a rolling reserve with an account-specific percentage and release duration. Its dashboard shows the terms and upcoming releases. A reserve review and the release of a particular amount are separate events; don't substitute one date for the other.

Reconcile the held balance separately

Movement	Held balance movement	Running held balance
Opening reserve	$400	$400
New amount withheld	+$150	$550
Older reserve released	−$100	$450
Closing reserve	$0	$450

Original ASBG worksheet with fictional AUD figures. The table is also the text equivalent of the example.

The closing held balance is $400 + $150 − $100 = $450. In the same fictional period, new completed payments are $1,500 and fees are $30. If no other adjustments exist, the available payout is $1,500 − $30 − $150 + $100 = $1,420. Keep the $450 still held on its own supporting schedule. These figures are invented and are not Square reserve settings.

Releasing $100 transfers value from held to available funds. It is not a second customer sale. Trace the release into its actual payout and bank receipt, using the settlement bridge to avoid counting it twice.

Keep release conditions beside each amount

Record the payment cohort, scheduled release date if shown and any conditions. Use the provider's current account notice, not a generic marketing page. Square lists factors including prepayments, dispute history and processing patterns when explaining reserves; the reason for your account needs its own evidence.

If the provider applies reserve funds to a dispute or reverses a release, record the documented adjustment and its reference. Don't silently remove it from the opening balance. An unexplained change should remain an exception until support identifies it.

Forecast available cash and conditional cash separately

Use bank money and confirmed incoming receipts for commitments that must be paid. Put a conditional reserve release in a separate forecast line with the assumption stated. For the fictional $450 closing reserve, don't schedule $450 of supplier payments simply because the sum appears in a provider balance.

Run a forecast with the release delayed as well as on the displayed schedule. The cash-flow guide covers the broader process. Your accountant can confirm how the held balance is presented in the balance sheet.

Resolve information requests through the secure route

Gather only the documents requested and check the notice in your account before uploading them. Square's missing-transfer guidance distinguishes verification and account-review restrictions from transfer tracing. If a request is unclear, ask support which document or transaction it concerns and save the answer.

Keep one owner and a follow-up date on the schedule. When funds are released, reconcile the actual transfer and close the relevant cohort rather than resetting the entire reserve register. More payment checks are in the payments hub.

Key takeaways

• Separate reserves, fees and ordinary unsettled money.
• Reconcile opening balance, additions, releases and adjustments.
• Keep conditional releases distinct from cash available to spend.

Where to get help

• Square: payment reserves
• Square: troubleshoot missing transfers