How to Reconcile in Xero: Step-by-Step for Beginners

If you’re new to Xero and want your accounts to stay accurate, learning to reconcile is step one. In this guide, we break down exactly how to do it—no accounting degree required.

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Step 1: Understand What Reconciliation Means

Reconciliation is simply matching what shows in your bank account to what you’ve recorded in Xero. Think of it as checking if your budget matches your bank statement.

Before You Start: Setup Checklist

Make sure the following is done:

✅ Your bank feed is connected to Xero
✅ All invoices and bills are entered
✅ You have access to the right bank account in Xero

Step 2: Make Sure Your Bank Feed Is Connected

Go to Accounting > Bank Accounts
Make sure your bank feed is live and pulling transactions automatically.

Step 3: Start the Reconciliation

Click on the account you want to reconcile.
Then click on “Reconcile [X] items”

You’ll now see a list of bank transactions on the left and suggested matches on the right.

Step 4: Match Transactions

a) If it matches perfectly
→ Click “OK”. Done!

b) If it’s not matched
→ Click “Find & Match”, search for the invoice, bill, or payment manually.

c) No transaction recorded yet?
→ Use “Create” > Spend/Receive Money to log it.

Step 5: Review & Finalise

If you’re unsure, use the Discuss tab to leave a note.
Review your reconciliation reports regularly to catch errors.

💡 Tips from Didiserv

Reconcile weekly to stay on top of things
Use the “Discuss” tab to avoid errors
Don’t create duplicates

Final Word:

Didiserv makes it easy. If you’re a small business owner who wants this done for you—accurately, monthly, and with tax readiness built in—get in touch with us today.