Xero: How to reconcile your bank

4th February 2022

Reconciling your bank account is an important task in managing your businesses finances. This is because, by doing this we are making sure that all business transactions are being recorded and more importantly, you can identify any unusual transactions that may be taking place in your company.

Xero has a feature in which you can add in a real time bank feed from your bank account to Xero itself (for more on this visit my blog on “How to set up a bank account in Xero”) this means less hassle as everything is recorded in one place and there is no need to manually import a statement!

To reconcile your bank account, you need to have already put on your invoices and bills to pay for the customers and suppliers. Once you have done this you will see that the status of the invoices and bills are “awaiting payment”, so now we need to reconcile them to the bank statement lines that the bank feed has produced.

Go to:

  • Accounting on the top blue-ribbon bar
  • Bank Accounts
  • You will see a blue button which will say “reconcile XXX items” (XXX will tell you how many bank statement lines there are to match up to complete the reconciliation process)
  • You will now see the bank statement lines listed on the left- hand side of the screen and on the right- hand side of the screen will be what has been created in Xero by you. If there is a match for the correct bank statement line you can press ok. If not and you have not created an invoice/ bill for it, you have the option to “create” a spend or receive money transaction. Although, unlike invoices these will not appear in the invoicing screen.
  • Once you have completed this, Xero will tell you there are no more lines to match.

 

If you would like to know more on how to reconcile your bank please do not hesitate to contact me.

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