You may ask “There are green matches on my bank feed – can I click them?!”
We get it.
We love seeing Xero do its job too!
And the temptation of seeing a page full of little green boxes that are just begging to be ticked off can be just too great!
Or, maybe you see something sitting there waiting to be reconciled, and you know exactly what it is, so surely it can be dealt with? But, should you?
Sometimes, of course, the answer is a big old, fat YES! But here are 5 times where you may want to check a little further before getting too click happy…
The box is green, but there is a message saying ‘other possible matches found’
This most usually means that there is a bill from the same supplier for the same amount every month, and so even though one has matched, you will want to take care that you match the one that matches up with the (probably the earliest dated one).
It could also be that you invoice many customers for the same amount, and so Xero has matched up one of the invoices outstanding – but is it the right customer? This one is pretty important to get right!
You see money in from a customer who you know you’ve invoiced, but no green box – should you ‘create’ the reconciliation?
Do you have customers who have multiple invoices outstanding? Or will they be paying in instalments? If you are raising invoices in Xero then these should ALWAYS be matched up. To deal with these, you can ‘Find & Match’, and then either select multiple invoices, or ‘split’ an invoice for a part payment.
The money in from a customer doesn’t match the invoice amount, so should it just be created?
Nope! Like we said before, your sales really should all have individual sales invoices, that is very important! If the incoming amount is less than the invoice, have you been charged a fee through the money collection service, such as Square, Stripe or GoCardless?
In this case, you will need to ‘Find & Match’ the invoice, and then add in a ‘Bank Charge’ to cover what has been deducted
I know what this expense is, but the amount on the receipt doesn’t match what’s gone out of the bank
This is very common when the original invoice is in another currency. So either the exchange rate is out by a little, or there’s a charge from the back. One again, you can ‘Find & Match’ the transaction, but then will need to add a ‘minor adjustment’ or a ‘bank fee’ to make up the difference.
I know what this expense is, so why do I even need a receipt?
Basically – because HMRC says so! An audit of your accounts can be requested at any time, and, if it turns out that you are claiming things that cannot be proven with the paper trail, they may not be too happy… Also, most especially if you are VAT registered, the VAT cannot be claimed back on an expense unless there is a receipt attached to prove that it was charged.
So, you may well know for sure that the money you spend at Tesco was for fuel. But many of Tesco’s products could be VAT-free, so the receipt needs uploading and matching to prove exactly what it was you purchased.
Please don’t take all this and think ‘oh, so Xero isn’t that easy and automated after it’ – it is! It’s just that, like many things, you need to know what you’re doing, and then things just get easier and easier!
If we do your bookkeeping, don’t worry – we check for all of the above and more, to ensure that your bookkeeping is always done correctly.
Where can I learn more?
If you do your own bookkeeping and feel that you would like a little more help, knowledge and insight into the world of Xero, and how to feel confident that you’re doing things right, then please reach out to us and enquire about our Xero training courses.
