Your Financial Information is only as reliable as the data you enter and the degree of care taken when you enter it. For your business numbers to be as reliable as possible, it only takes a few minutes each month. This will also make your year end procedures easy and painless.
Ensure that all Bank Feed lines have a corresponding Sales or Purchases transaction in Xero and that they have been reconciled to the Bank Feed lines.
Confirm that the bank and credit card balances are the same as the online statements for each. To run a reconcilation report:
1. Select the Dashboard tab in your Blue Xero toolbar
2. Click on the three vertical dots in the top right hand corner of the bank or credit card account you wish to reconcile
3. Select Reconciliation Report
4. Use the drop down arrow to choose the correct bank or credit card account and edit the date to reflect the month end you are reconciling.
5. Click Update to produce the report.
6. Finally (and perhaps most importantly) confirm that the Bank Balance at the bottom of your statement is consistent with your online statement balance. Should there be a difference between the two amounts there could be several reasons:
- You may have forgotten to enter a transaction or manually reconciled an incorrect amount using Mark as Reconciled which "creates" a transaction in your bank feed
- Yodlee may have dropped or duplicated a bank feed (or two) - you will be able to determine this by comparing transactions in the two systems
- The starting balance from the previous month may be incorrect (in which case, go back to the previous month and repeat the steps, above). You may need to go back a few months if there continues to be a discrepancy.
- You are not using the same dates - most credit card statements are effective the 5th of the month, etc and not the end of the month as is the case in accounting. For credit card reconciliations, you can also adjust the date in Xero to reflect the statement date.
Review Recurring Transactions
In your Sales and Purchases folders, you may have created invoices or bills to reflect monthly or weekly expenses, such as rent, lease payments, etc. If you have saved these in Draft, you will need to open these bills/invoices and Save them before they can be reconciled against payments made or received.