Sometimes you might have refunded more orders than sold in a payout period, resulting in a negative payout that charges you.
Reconcile.ly takes care of this for you, when this occurs we will do all the working out of which account to credit/debit based on the original order. Then a credit note will be sent to your Xero.
Before you can reconcile this though, you'll need to go to the credit note, and apply the refund. As per below:
Once this is done, you should see the row appear green in the reconciliation screen in Xero.