Process cheques or cash before you've banked them

Here's how to process invoice or bill payments before you've banked them.

Sales invoice or bill payments

If the payment you've made or received relates to a sales invoice or bill already entered in Xero, go to the invoice or bill and enter the payment onto it (even if it's only a part payment).

Until the bank statement line is imported (when the payment goes through your online bank account) the payment will remain unreconciled in your Xero bank account and on the Bank Reconciliation screen. When the payment goes through your bank account and is imported, you'll be able to reconcile it to the payment you made on the invoice or bill.

Cash sales or payments

If a cash sale or payment has been made (i.e. not an invoice or bill payment) enter a receive money or enter a spend money transaction at the time you pay or receive the money. As with invoices or bills, the transaction will sit as unreconciled in your bank account until it goes through your online bank account at which time you can reconcile it to this transaction.

These scenarios are often referred to as 'undeposited funds' or 'cash on hand'.