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Xero Bank Reconciliations

Bank reconciliation has always been a core bookkeeping task. Comparing two sets of records to make sure the figures are correct was a time consuming but essential process of inputting bills and invoices into an accounting system then cross checking these against the bank statement. 

Xero totally rethought that process and essentially created a matching game, with Xero transactions (bills and invoices) on one side and statement lines on the other. Xero then did the match for you - something that had never been done before. It was a totally new way of undertaking a traditional bookkeeping task.

Xero continue to invest in machine learning capabilities and have recently announced that they are now using predictive algorithms to suggest the contact and account code for transactions  created during the bank reconciliation process (ones that aren't based on an existing bill or invoice)  Xero claim that at first it will only positively impact a small percentage of transactions but over time the algorithms will learn which matches are correct and then users will see a real difference and consequent time savings.

In testing at the moment, it is anticipated that this new feature will soon be broadly available.