Bank Feeds
The 1st step is to ensure you have ALL your bank accounts, credit cards and loans feeding directly into Xero. These are known as your bank feeds in Xero.
Once these are all setup you need to ensure there are no errors. What do we mean? Occasionally when sending data to Xero the connection with the bank will produce an error and transactions for a day or a certain period won't import.
Xero have an entire blog page dedicated to letting us know if any banks are having trouble sending Xero data here. We suggest checking here 1st if you notice something missing in Xero.
The next step is to check the bank balance(s) in Xero match your actual bank balance in Internet Banking. You should do this once a week. We suggest making it part of the payroll process - ie when you log in to upload the .aba file in internet banking check both balance equal then.
Reconciling
Xero have made reconciling your bank transactions a breeze. You can even do this on your mobile device in the morning on your commute to work or in line waiting for your coffee!
You should be reconciling your bank account weekly. This ensures you are keeping an eye on the income and expenses of your business, you know who still owes you money and ensures you keep a close eye on expenses.
Add-ons that automatically send your invoices / receipts to Xero means you only need to press the OK button to the majority of your transactions. Anything else, bank rules should be setup for.
Why is this important?
If you don't reconcile regularly it means you don't have a handle on who owes you money, what bills you still need to pay, whether you are ahead or behind your budget, whether you are over spending in any areas, or how much GST, Super and Tax you should have put away.
We don't mean to be alarming but this is your duty as a business owner.
And it's the only way you see a true picture of exactly where your business is at.
It's also a lot easier to do regularly than to leave it pile up.
I don't have time
If you don't have the time to do your own reconciliations, don't have anyone in your team to do this job or just don't want to do it you need to hire someone to help! Give the team at Growthwise a call and we can help ensure this is done for you regularly.
