---
title: What Xero does automatically and what you must do
description: What Xero does automatically and what you must do
---
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# What Xero does automatically and what you must do
## A list of what you need to do to operate Xero properly, and what it does automatically
Xero automates much of the bookkeeping process, but some things still require your input. Knowing what you need to do and what Xero does automatically helps you use Xero effectively.
### What Xero does automatically
- Pulls bank transactions in daily via the bank feed
- Matches bank transactions to invoices and bills you have raised
- Calculates VAT on each transaction based on the code applied
- Builds your VAT return figures from approved transactions
### What you must do
- Raise invoices for all of your sales and approve them in Xero
- Enter supplier bills and attach the invoice document
- Categorise any transactions the bank feed cannot automatically match
- Reconcile the bank account by confirming the Xero balance matches your bank statement
đź’ˇ **Good to know:** Transactions that sit unreconciled in Xero do not affect your VAT return until they are matched and approved. Check the **Awaiting Payment** and **Unreconciled** items in Xero weekly.
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