This guide explains what bank reconciliation is and how it works in Xero.
What is a bank reconciliaton?
A bank reconciliation is the process of confirming that all the transactions in your bank accounts are recorded in your business accounting records.
In Xero this is done on the Reconcile Tab, by matching bank statement lines from your bank account on the left against transacitons on your right.
Statement lines: are bank transactions imported from your bank account via a bank feed or manually imported
Transactions: are created in Xero. These could be invoices, bills, expense claims or cash transactions
The aim of the bank reconcilaition is to match each statement line in the bank account to an existing transaction in Xero, or create a transaction during the reconcilition process
Bank reconciliaiton help you:
- Ensure that your financial reports are based on accurate and up-to-date information
- Catch errors early. The sooner you find any mistakes the easier they are to fix.
- Find any transactions that are missing or incorrect in your Xero account.
The more accurate and up to date your bank reconciliation, the better visibility you will have of your cash flows.
Best practice
We recommend that you reconcile at least weekly, or even more frequently (eg. daily) if you have a lot of transactions.
STEP BY STEP GUIDES
Below is a list of key help guides relating to bank reconciliations
- Reconcile your bank account - Includes find and match to exisitng trasactions, creating new transactions, bank transfers and accepting Xero suggestions based on bank rules or previously reconciled lines
- EOD Merchant Sweep - Reconciling Windcave payments (Undeposited Funds)
- Xero | Reconciling Cash Banked
- Recording a Client Prepayment or Deposit Without an Invoice
- Record an overpayment
- Record a Partial payment
- Record a refund
- Applying Zip Pay Payments
- Apply Supplier portal discounts
- View bank reconciliation details
- Create a bank rule
- Edit or delete bank rules
- Reconcile statement lines in bulk (cash coding)
TROUBLESHOOTING ISSUES WITH RECONCILING
- Why are the statement balance and balance in Xero different
- Fix problems with bank rules
- Fix an incorrectly reconciled bank statement line
- Unable to reconcile an overpayment created while reconciling bank transactions
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