How to reconcile your bank in Xero step-by-step
A guide to reconciling your bank feed transactions to entries in Xero
The reconciliation process in Xero matches bank feed transactions to existing Xero entries (invoices and bills) or creates new entries for costs not yet recorded.
The step-by-step process
- In Xero go to ‘Accounting’, then ‘Bank Accounts’, and click ‘Reconcile’ on the relevant account
- Each transaction from your bank feed appears on the left. Xero suggests a match from your invoices and bills on the right
- If the suggested match is correct, click OK to confirm the reconciliation
- If no match exists (the transaction has not been entered as a bill or invoice), click ‘Create’ to categorise it directly from the bank feed
- Work through all items until the Statement Balance in Xero matches your bank statement
- If you have a high volume of transactions to reconcile, you can speed this up using the Cash Coding tab, where up to 200 transactions appear in spreadsheet view (available on Xero Grow and Comprehensive plans)
If you cannot find a match
If a transaction does not match any invoice or bill, it is either a cost not yet entered, or a personal transaction inadvertently made from the business account. Code it to the correct account or to the Director Loan Account if it is a personal transaction.
💡 Good to know: Use Xero's ‘Find and Match feature’ for transactions where the amounts are similar but not identical (for example, a payment that includes a bank charge). Xero will show you close matches.
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