Many people assume that because the bank feeds automatically come into Xero’s software, the bank is always correct after you finish reconciling the transactions.
However, this isn’t always the case – and a Bank Reconciliation Report can show any issues. This report is in REPORTS, ALL REPORTS, Accounting – Bank Reconciliation Summary. You select the bank account you want to check and the date.
It could look like this:
The issues above were:
- Manually processing Spend/Receive Money (extra transactions – ie petty cash items weren’t paid out of the bank account)
- Transfers between bank accounts incorrectly entered (should have been entered as Owner Drawings/Contributions)
The bank balance is actually -$1,984.55 per the bank statement, but Xero is showing it as $2,365.45 due to the error.
It’s very important to always check the Bank Reconciliation Summary each month/quarter to ensure the bank is 100% correct. If there are any issues, please feel free to contact our office for assistance/tips to fix the issue.
Comments are closed.