Enter your idea

I agree with Arron that knowing an account doesn't reconcile is the easy bit. The hard bit is working out why it doesn't reconcile. Having some way of noting that you have identified a transaction, which remains on the record when you return would be really helpful.

Also, I am not sure @Dana A has understood the issue as they are referring to reconciling balances within a company. The majority of reconciliations are with 3rd parties (e.g. HMRC, Bank loans, Intercompany loans) so the information being compared is outside of Xero. A good first step would simply be the ability to tick off transactions and for the tick to remain (unless removed). A formal reconciliation system, similar to the bank rec system, could follow in due course, though I am not sure it needs to be that sophisticated.

@alex - it’s great someone is working on solving this issue, but I don’t think you’ve picked up the core of the problem. I don’t see how your solution would add much value at all, and can be achieved (I think, as you describe it) using other kpi / monitoring software (eg Fathom) that does a lot more as well.

Line by line reconciliation is the vital part and the real value add

Thanks Alex for working on a solution for something that should be part of any Accounting Software. Unfortunately what you are describing at this stage doesn't sound like the solution I am looking for. The key need is to be able to tick and clear the bits and pieces that reconcile ( often this is to $0.00) and to be left with only the items that are waiting to be reconciled. For many Balance Sheet Accounts this can be complex and transactions that tick off against each other can be months apart. They can also be six transactions on one side that tick off against one or two transactions on the other side. It is so painful and time consuming and antiquated to have to deal with this via Excel.

Hi Alex,
The functionality as you have explained it does not sound like what I am chasing here. I am wanting to be able to tick off, line by line, in many cases in order to reconcile back to $0 so reconciling to a specific balance won't work in these sorts of cases. eg. Merchant clearing account, reconciles to $0 but usually has an "unticked" balance at a specific date that won't come in till a day later.

Also, personally I believe that this is a critical element for any decent accounting software and am astounded that Xero has not seen this yet, so your solution SHOULD be short lived if Xero listen to their partners and users and see the relevance and importance of this functionality being in the core software.

Hi Alex,

I've got clients paying thousands to get this core functionality sorted, so very much a needed solution. Can I encourage you to post your comment in the Mastermind group where we love apps and data and data accuracy ! https://www.facebook.com/groups/XeroMasterMind

Heather Smith

Hi all,

I am currently working on creating a Xero application which will assist in managing balance sheet reconciliations. We plan on making the management process simple, essentially where you can add a "reconciliation" balance to each account for each month, and the system will notify you if this balance matches the current Xero balance. You will be able to add attachments and descriptions to each balance you enter. Each account can be approved by a specified person if required, by a specific date. The program will also tell you if the periods are locked, and if any old balances have changed, in order to maintain up to date reconciliations.
You will be able to roll forward past reconciliations to make the current month easier as well, and view the 'last reconciled' rec available in the system.

Our initial plans don't include reconciling line by line transactions within the system (ie netting off lines as you go), however this may be something that we can add further down the line.

Would love to hear your feedback on this idea, and whether you would deem this to be useful in the current state

Thanks!
Alex

Allow reconciliation of accounts.
Standard bookkeeping practice reconciles and removes reconciled items to keep track of account activity.
Xero does not allow reconciliation, except the fake "reconciliation" in the bank feed.
The one major flaw in Xero which prevents me recommending it to small business clients.

Thank you so much Heather Smith!! I must admit I hadn't seen Dana's comment until you referred to it in your post. I do hope that the powers that be at Xero do understand the importance of this function and how "in the dark ages" not having it makes Xero, which I know is not what they are going for. They cannot be "leading edge" without some way for us to manage this in the software. Surely exporting to excel and reconciling in excel is not a solution but should only be considered a "temporary" work around. Trust me, I have been talking the ears off any Xero person that would listen and I think I spoke to about 5 Xero people at Xerocon about this. We need to make our voices be heard but once again thank you Heather for using your contacts to also fight this one on our behalf.

Yes OMG Thanks Heather Smith - that is brilliant. & I am just going to add that this around the Superannuation Clearing account and automated super is really becoming critical. With STP now the ATO are on late super straight away - dots are connected so even if people are a few days late with their super it could get quite costly with fines and charges. The Auto Super if a super fund bounces is sooooooo fraught with danger - it just bounces back in to the bank with no real clear notification that it has done so - shocking. In the bank it's far too easily mis allocated. I had a client reconcile it as Sales only to pick it up a year or so later when we started doing it, actually couldn't even find it in the end. That whole superannuation reconciliation process really needs to be improved, automated - it's all manual now and very very work around and potentially costly - Hope Xero have a review team working on this. Happy to be a part of as we really need this, not just for efficiencies and checks and balances - we need to be on this straight away. Welcome all thoughts on work arounds and processes for now but what we really need is better automated system reconcilation process and maybe better comms/feedback from the actual **** superfunds as well.

Fantastic Heather Smith. Thank you for once again doing an amazing job at representing us all. I think XERO needs to realise how critical this feature is. Reconciling in Excel is time consuming, tedious, inefficient and like stepping back into the dark ages. I reconcile the bulk of the Accounts in the Balance sheet and it is especially important for Clearing Accounts. And the more complex these are the more difficult and time wasting it is to do using Excel. Unfortunately I think alot of Accountants have never experienced the ease and efficiency of being able to reconcile within the software, so don't know what they are missing, and it's why this product request is not at the top of the list. For Accountants and Bookkeepers who have experienced this feature in other software it is a critical missing feature. It is 100% the reason why I recommend and sell way more of the competitors software than I do XERO, even though XERO is hard to beat in other ways.

Hello, I wanted to drop a short update here. My name is Heather Smith (I’m a partner and facilitator of the Xero Mastermind group). At London Xerocon, I met with Xeros’ Chief Product Officer Anna Curzon and I spoke with her about this core functionality request that assists us in ensuring the accuracy of data in the accounts.

She recorded me talking about the importance of this product feature request, and how people are manually doing it now. This was passed to the product team, who met with me Sep 15 ( the day after Dana from Xero posted her response).

I had a long conversation with the Xero product team about the importance of being able to mark off all transactions, particularly in clearing accounts. They asked me lots of questions, and I feel I left the meeting with them understanding the importance of the issue.

Hopefully we are further along on our journey and more members of the product team understand this issue.

I encourage you to get other people to vote here, and when you speak with an account manager, explain the issue to them (you’ll quickly find out what their level of accounting knowledge is!!)

Have to say I really love the Quickbooks Wizard for BAS and Workpapers. Reconciliation is great.
We currently do a work around in Xero ie. publish when we run the reconciliation report and compare it against the bank statement otherwise 6mths down the track when something that has thrown it out of balance, we have no way of knowing when it was last reconciled. We do this for ourselves/team so anyone (inc other collaborative users using the file eg. Bus Owners, Accountants) can log in and if they need check the published reports to see when it was last reconciled (what I call stage 2 of reconciliation) Would love Xero to even just start with improving the Bank reconciliation process but yer, ability to 'Reconcile' other non bank accounts would be great. Much prefer that than all the facade face lifts that yer yer I know are supposedly the foundation for greater functionality

Come on Xero, I think you need to rethink as this is a standard accounts package function!

Unfortunately the suggestion of using the Account transaction report is just as unhelpful as exporting to Excel as it stops the whole flow of accounting as it can only be done at month end after all transactions are uploaded rather than matching items ongoing throughout the month - which is the benefit of a proper control account like in Sage!

Russ makes some good points as well about those who would benefit but have not voted as they are probably unaware of the possibilities unless they have previously used a competitor system.

Whilst this only has 90 odd votes I suspect it is a problem much wider than noted here. A huge number of small businesses use a POS system and download daily sales journals and bills into Xero. They often have cash clearing accounts which have to be reconciled with banking, eftpos clearing accounts to be reconciled with eftpos takings, direct payments clearing accounts that the y receive on line and gift card clearing accounts. I support many small businesses and I am always amazed that very few reconcile their clearing accounts because they just haven't even considered it (and their accountants just write off any differences I presume). These people are not likely therefore to look for a solution or find their way to this support note.

Obviously we have lived without it to date so can't say Critical but OMG it would be awesome, amazing - Bring it on

I would rather not set up clearing accounts as bank accounts to be able to reconcile to zero... In Xero

It would be way better then having to create dummy bank accounts for managing Medical Practice management systems and payments coming from Health funds and merchants.

Ability to reconcile non-bank accounts such as Wages payable, disbursements .... For some clients these features are critical.

Needed for reconciliation of deposits and bonds in the accomodation industry.
Accounts should be able to be nominated as open item.
Just ask to replicate function in that are used in open item accounts such as debtors

only thing really keeping me from moving to xero from QBO