It’s good practice to compare your statement balance in Xero to your online or paper statement balance (your actual bank balance) at least once a quarter – once a month if you manually import bank transactions. The two balances should match each other for the same date. If your two balances don’t match, this means either your starting point in Xero is wrong or you have an error in your statement lines. This article helps you identify your error and shows you how to fix it.

Your bank account in Xero will be made up of a number of reconciled and unreconciled transactions.

1. Is the bank balance in Xero  – this includes all transactions posted to your accounts in Xero.

2. Is the bank balance on your bank statement. The difference between 1 and 2 will be the unreconciled transactions:

  • transactions posted to Xero that have not cleared the bank yet and
  • transactions that appear on the statement that have not yet been entered into Xero.

If this balance does not match your bank statement – we will need to investigate why.

Xero bank balance

 

Run the Bank Reconciliation Summary report for several dates in the past

The dates you choose will depend on how long ago your statement balance last matched your actual bank balance. Let’s say, for example, your balances last matched in January and it’s now April. Run a Bank Reconciliation Summary report for 31 January, 28 February and 31 March.

Xero bank balance

Compare your Bank Reconciliation Summary reports to your actual bank balances

Check the statement balance on your Bank Reconciliation Summary agrees with your actual bank balance for your chosen dates. For this example, you may find your balances match for 31 January and 28 February, but not for 31 March. This means an error happened in March. You may then want to run Bank Reconciliation Summary reports for several dates in March so you can further narrow down the date an error happened.

 

Identify the type of error by viewing bank statements in Xero

Once you’ve identified a date range in which you think an error has happened, then you need to identify the type of error. Your statement line error will be one of the following:

  • A missing statement line. You can
  • A duplicate statement line (a statement line was imported twice into Xero).
  • A mistakenly deleted line.
  • A statement line that was mistakenly marked as reconciled (which has created a manual statement line).

View your bank statements in Xero for your chosen date range

The best way to view your bank statements in Xero is through the Bank Statement tab in the Bank Reconciliation Summary Report.

Xero bank balance

Manually check your actual bank statement lines against your bank statement lines in Xero

You now need to manually compare your actual bank statement lines against your bank statement lines in Xero. That is, go through your actual bank statement line by line and find where it differs to your statement lines in Xero. The difference you identify is your error.

If you have a lot of statement lines you may want to export both your bank statements in Xero and your actual bank statements to an Excel spreadsheet. This could make it easier to compare your two sets of statement lines.

Correcting the error in Xero

  • A missing statement line can be corrected by:
    • Creating an import file with the missing transaction (3)
    • Creating a spend money or  receive money transaction and manually reconciling it  (2)
  • A duplicate statement line (a statement line was imported twice into Xero) can be corrected by:
    • Deleting the duplicate transaction from the Reconcile tab (4)
  • A mistakenly deleted line can be corrected by:
    • Creating an import file with the missing transaction (3)
    • Creating a spend money or  receive money transaction and manually reconciling it (2)
    • Drilling down into the imported bank statement and un-deleting the deleted transaction (5)
  • A statement line that was mistakenly marked as reconciled (which has created a manual statement line) can be corrected by:
    • ‘Removing and redoing’ it  the posted transaction from the ‘Account Transactions’ tab (1)

Xero bank balance


Fully supportedBespoke Xero Training

  • Call us if you or your staff need one to one training or help to customise Xero to your business
  • Tel: 01449 258548
  • Email:  Helpdesk@Caseron.co.uk

 


 

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