Bank feeds and reconciliation

Two different screens, one purpose

Bank reconciliation proves the ledger’s cash equals the bank’s cash, after timing items. Xero’s primary tool is line-by-line: each statement line on the left is matched, created, or transferred until none remain. QuickBooks Online has Banking → For Review (similar matching) and a separate Reconcile that asks for the statement ending balance and ending date — closer to a paper rec.

What “OK” is doing

When Xero suggests “Ivey Insurance $186” coded to Insurance and you click OK, you are posting spend-money and marking the statement line reconciled in one stroke. If a bill already exists, OK on a create would double it — use Find & Match instead. Suggestions are trained on your history. They are not a source document.

The balance must still agree

When statement lines are gone, Xero’s bank balance in the software should equal the bank. Run the Bank Reconciliation report: statement balance, plus outstanding unreconciled payments/receipts, equals the ledger. If it doesn’t, you have a duplicate, a missing import, a starting-balance error, or a line reconciled to the wrong amount.

• Outstanding checks (in the books, not yet on the statement) are normal timing.
• Deposits in transit are the same on the receipts side.
• Bank fees and interest that appear only on the statement must be created, not ignored.
• Never force a rec by coding the difference to Owner’s equity or “rounding.” Find it.

How often

Weekly at minimum; daily if volume is high. Xero’s cash-flow forecast is only as good as the last rec. Credit cards, savings, loans, and PayPal are bank accounts in this sense too. Unreconciled cards are how expenses go missing.