How to reconcile bank accounts in Xero

Oxford Edge’s go-to, step-by-step guide on how to reconcile your bank accounts in Xero.

From your dashboard, you should be able to see the accounts that need reconciling. Select the ‘Reconcile items’ button.

This will bring you to the reconciliation page. On the left side you will see transactions that have gone through your bank account. The right side gives you options on where to code each transaction.

Transfer: Use this tab when you are transferring funds between bank accounts. Please note that this only applies to the bank accounts set up on your Xero account.

Create: This is the tab you will use most of the time.

1. Who – Enter in the name of the person/company you are paying or receiving money from
2. What – Choose the account which best suits
3. Why – This is a place where you can provide some additional details (this information is not required to reconcile)
4. Tax Rate – This option should stay the same

The only required boxes to fill in are 'Who' and 'What'. After these are entered you can reconcile the transaction.

Add details: This feature allows you to split payments and attach supporting documents. Click the 'Add details' option and the following window will expand:

1. This is where you can attach documents. Either drag and drop your documents into this window, or click the page icon and navigate to the file you wish to upload. You can attach documents after transactions are reconciled.
2. This is where you can split a transaction. This occurs when you pay for a group of items in one payment.
   For example: You purchase envelopes and a registration for your work car at the post office. You will be able to split the amount relating to the envelopes to the Postage & Stationery account; and the registration amount to the Vehicle Expenses account.

Split feature:

1. Enter in a description of what the item is
2. This value will usually be left as “1” (used for when clients are dealing in large amounts of the same product)
3. The price of the item
4. Choose the account you want to code the item to
5. The tax rate will automatically update once the account has been selected

Once the total of the transaction and the breakdown of the invoice match, click ‘Save Transaction’. The following window will appear. Go ahead and click ‘Reconcile’.

If you are having any challenges with Xero, please give Oxford Edge a call on 03 379 6710.