Bank account integration
Please see Xero help at: https://central.xero.com/s/article/Add-a-bank-account-or-credit-card-account-UK#Addabankaccount
There is no direct feed for a number of banks including the Co-op Bank, so the Yodlee intermediary is used for these.
The bank feed may need to be updated manually. This will require the user also to have online access to the bank account being updated (i.e. to enter authorisation details during the process).
Bank transaction reconciliation
General and the basics
You should consult Xero help at:
A bank transaction has to be one of the following:
- A “Receive money” transaction, which will be either:
- Payment of or against an invoice
- Payment of non-invoiced income
- A “Spend money” transaction, which will be either:
- Payment of or against a bill from a supplier, subcontractor, or partner organisation to whom we are passing through money owed to them
- Payment of non-billed expenditure or of funds due to a partner organisation
- A transfer from one of our accounts to another.
Only Receive and Spend money transactions for non-invoiced or non-billed amounts should be allocated accounting codes (or tracking codes). All such transactions need to be allocated accounting codes.
All items in invoices and bills need to be allocated accounting codes. If applicable, they also need to be allocated tracking codes.
Note that any bank accounts holding money in trust for direct beneficiaries of the donor (“Client accounts”) are not (in this guide) generally included within our main accounts. Instead each bank account holding such monies in trust is treated as a Contact from whom payments may be received or to whom they may be made.
When doing reconciliation, do make use of but also bear in mind potential issues related to Xero’s automation features. Three things to be aware of:
- You can create “Bank rules” which will take precedence over other actions and can include both accounting and tracking codes to be added. This is very helpful, for example, for something like an electricity direct debit which can be identified by the supplier name and will always have the same accounting code. When the rule matches the transaction, the Xero interface shows the transaction as matched in principle. You OK the match to reconcile the transaction.
- You can create bank rules as you go along in the process of reconciling the bank payments. You will see an option to do so at the top right of each transaction:
- Xero can match a transaction with a bill or invoice. Usually this requires both the supplier and the transaction value to match those in the bill.
- Always check via “Find & Match” that the transaction is associated with the right bill or invoice before OK-ing the reconciliation;
- If, even if a bank rule has been applied, you think the transaction may relate to a bill or invoice, then use “Find & Match” to review potential bill/invoice candidates. (If there is a related bill but the values do not match, then look at the more detailed advice that follows to reconcile the transaction.)
- Xero makes a best guess at a match for the transaction based on earlier entries; it offers this as a match for you to OK. Be wary of these. It is all too easy to click through, OK-ing Xero matches, to find you have recorded transactions wrongly.
- If no bill/invoice relates to this, edit the details directly in the reconciliation listing or press “Add details” for more detailed entries such as tracking codes
- If a bill/invoice relates to this, press “Find & Match” to match the transaction to the bill/invoice.