Before you start your bank reconciliation

What you need to do before you can start reconciling your bank account, how you know when to reconcile, and how Xero helps you.

Enter transactions in Xero before you start reconciling

Essential transactions

Optional transactions

How you know when to reconcile

Look for a Reconcile [number] items button on the Bank Accounts screen or the Dashboard in Xero. You'll see this reconciliation button whenever transactions are imported from your bank account into Xero ready for you to reconcile.

Image of the Bank Accounts screen and the Reconcile [number] items button.

How Xero helps you reconcile

Xero follows these steps, in this order, to help you reconcile.

  1. Xero tries to match

    Xero automatically matches imported bank transactions with transactions entered in Xero.

    Image showing example of auto match.

  2. Xero looks for rules set up

    If Xero can't make a match, but can match a condition of a bank rule you've set up, Xero suggests creating a transaction. The suggested transaction contains all the details of the bank rule.

    Image showing bank rule applied.

  3. Xero makes a suggestion

    If there is no match or bank rule to apply, and you have turned on Suggest previous entries, Xero suggests creating a transaction. The suggestion is based on a previously reconciled transaction with similar details. Xero suggests the Who, What, and Why, so the transaction is ready to reconcile.

    Image showing match suggestion.

You'll need to review each match or suggestion to make sure it's correct. If Xero doesn't make a match or a suggestion, or has made an incorrect match or suggestion, you can search for or create a transaction.