The bank reconciliation screen explained
The layout in Xero and working through the queue of transactions - explained
The bank reconciliation screen is where you match your bank feed transactions to your Xero records. Xero presents each unmatched transaction and suggests the correct match.
The layout
Unreconciled bank transactions appear on the left. Xero's suggested match appears on the right. Each row gives you three options: OK (confirm the suggested match), Create (create a new entry for a transaction not yet recorded), or Find and Match (manually search for the correct match from all outstanding invoices and bills).
Working through the queue
Start at the top and work down. For each transaction, confirm the match if it looks right. For unrecognised transactions (bank charges, direct debits not yet set up in Xero), select ‘Create’ and code to the correct account. For payroll payments, VAT payments, and PAYE payments, use Find and Match to link them to the liability entries we post monthly.
💡 Good to know: Reconcile weekly rather than monthly. A week of transactions takes about 10 minutes. A month of transactions takes 45 minutes. Three months accumulated before a VAT return deadline can take hours. Build the weekly habit from day one.
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