How to do a bank reconciliation in Xero

Annette Ferguson

Annette Ferguson

Firstly, you will either need to connect Xero to your bank

or import bank statements to Xero.

Once that is done, from your Dashboard select “reconcile”


Xero remembers the last time you reconciled a transaction and will suggest the same details again.


You can change whatever you need to.  But if it correct you can select “OK”


Once you select “OK” the transaction will briefly turn green and then disappear


It is also easy to create the transaction from scratch, where you are new to using Xero (so have no historical transactions for Xero to guess with) or have a new supplier.


Start typing, then if you have used that supplier before Xero will start suggesting what it might be…if your supplier is there, you can select them, if not, just keep typing.


Then you’ll need to select the account that you want it to appear in (that is what category it relates to eg travel, stationery etc) – you can select that by starting to type the name into the box, you don’t need to remember the numbers, or you can just select into the box, and the drop-down will appear and you can scroll through all accounts and select the most relevant one.


You can add a description in the why box if you wish – but this is completely optional.


Once you have entered everything – select OK


If it is a bank transfer that you need to record, select the transfer tab


If it is a bank transfer that you need to record, select the transfer tab


And then select ‘ok’.


Let’s say that you have a receipt from a customer paying off multiple invoices.

You’ll need to select “find & match”


That will then open up a bigger box below


You can then use the search box to find the name of the customer and select ok to find all invoices relating to them


Then select the applicable invoices, that are getting paid


Then select the applicable invoices, that are getting paid


If you need to apply a partial payment then you can use the “split” function – select the blue “split”


Once you have reconciled all the transactions you will have the following screen displayed

And that is your bank reconciliation in Xero completed!

Thanks ever so much for taking the time to read my post I truly hope you’ve found it useful and insightful. If you have any questions feel free to contact us!

I am Annette Ferguson, CEO of Annette & Co. Chartered Accountant, Profit First Professional and creator of the Business Wealth Engine. We’re also SUPER social so don’t forget to follow. Here’s to your success!