Teri Cotta walks you through how to reconcile a bank statement on Xero.

At Rosemary Bookkeeping, we work closely with our friends and partners at Xero to help our clients get to grips with their bookkeeping.

Reconciling your bank account regularly using software like Xero means your records are accurate and up to date.

Reconciling your bank accounts means matching your bank statement lines to transactions in Xero, such as invoices, bills, or other payments.

That’s why our accounting crackpot, Teri Cotta, has been working hard to bring you the top tips to be a Xero whiz and understand its processes, from the terribly simple to the terrifically complex.

Specifically, in today’s Teri Tips, we’re walking you through how to reconcile a bank statement on Xero for some common payment types.

And if you’re a visual learner, don’t worry… a full video showing each of these points step by step can be found on our YouTube channel.


How to start reconciling bank statements in Xero

From your ‘Business Bank Account”, click the reconcile button to begin.

Here, Xero suggests matches by comparing information in the statement line, such as the amount and contact name within the Xero transaction.

Suggested matches are highlighted in green.

Click okay to accept a match.

Xero reconciles the statement line and marks the invoice or bill as paid.

When there’s no suggested match, but you know the transaction is in Xero, you can search for it, click find and match and search for transactions by name, reference or amount.


How to reconcile multiple bills at once

You might have paid multiple bills in one go.

When we select these two bills, the total matches our statement line.

So, click reconcile.


How to reconcile incorrect payments

You might have invoiced a customer, but when you search for the transaction, you see the customer has paid the wrong amount.

You can easily account for these situations when you reconcile.

In the example on our YouTube channel, we recorded an overpayment.

In this scenario, click new transaction.

This is a receive money transaction as it’s money coming in.

Select overpayment and click “save transaction”.

The total of these two transactions matches the statement line.

So, click reconcile. Sometimes you might pay for something on the spot like office supplies or parking, so there isn’t a transaction in Xero.

Here, you create a new spend or receive money transaction to reconcile.

Enter the who, what and why and click okay.


Need expert support?

Teri Cotta is joined worldwide by Rosemary Bookkeeping’s network of Xero-certified bookkeepers.

So, whether you need help choosing the right software for you, using Xero or outsourcing your books, our experts can help.

Take the hassle out of your bookkeeping and get the time back to focus on what matters most by contacting your nearest Rosemary Bookkeeper today.