Catch-up bookkeeping in Xero doesn’t have to eat your weekend.

In this practical guide, CPA + Profit Strategist Jamie Trull walks you through a monthly bookkeeping workflow inside Xero.

This includes:

• connecting bank feeds,
• reconciling in minutes with cash coding,
• building smart bank rules,
• using tracking categories,
• spotting errors with period reconciliations,
• and reviewing the right reports (P&L, balance sheet, cash flow).

You’ll also get a time-saving checklist, common gotchas, and pro tips for switching from QuickBooks to Xero without losing momentum.

👉 Best current Xero deal

👉 Not sure which software fits? Compare Xero vs QuickBooks vs FreshBooks

Why this Xero accounting software guide matters (and who it’s for)

If you’ve ever opened your bank app, whispered “I’ll do the books tomorrow,” and then… didn’t.

Hi, you’re in the right place.

Even number-nerds procrastinate.

The good news: Xero makes month-end cleanup genuinely quick.

Since switching from QuickBooks Online to Xero this year, I’ve found it faster, more intuitive.

And, dare I say … kind of satisfying.

This tutorial is for you if you’re:

• A solo founder or small team looking to catch up on 1–3 months of bookkeeping (or… more—no judgment).
• Migrating from QuickBooks and want a “how it actually looks” workflow.
• Ready to use bank rules, cash coding, tracking categories, and period reconciliations the right way—so your CPA (and future you) are thrilled at tax time.

Financial tasks you’ll learn

• A repeatable monthly Xero workflow that takes minutes—not hours
• Cash Coding to bulk-categorize transactions lightning fast
• Bank Rules that auto-code your recurring expenses (and how to set them to actually catch future transactions)
• Tracking Categories to segment divisions, locations, or product lines
• Period Reconciliation (the new Xero flow) to find missing/duplicate transactions before tax season
• A month-end checklist you can copy/paste and reuse
• Switching tips if you’re coming from QuickBooks Online

Quick links for Xero accounting software (so you can follow along)

• Try Xero with my best-available deal
• Not sure yet? Use my accounting software decision tree to compare tools.
• Learn how I think about profit (beyond taxes) in my book Hidden Profit.

Part 1: Set yourself up for a fast close

1) Connect (or refresh) your bank feeds

In Xero, go to Accounting → Bank accounts and connect your checking, savings, credit cards, and payment processors. Direct bank connections reduce disconnects and duplicate imports.

Pro tip: After connecting, review the import start date so you don’t miss early-month transactions—or import duplicates.

2) Customize your dashboard (2 minutes)

Drag the tiles you care about (bank accounts, invoices owed to you, bills to pay, short-term cash) to the top. Seeing what matters keeps you consistent.

Part 2: Reconcile the month in minutes

You’ll spend 80% of your time here the first month and far less going forward.

3) Start on the Reconcile tab

Xero will suggest matches (you’ll see the green OK button). Approve true matches (transfers, paid bills, paid invoices) first—this shrinks your to-do list instantly.

Sanity checks before you click OK:

• Dates look right
• Amount (gross/fees) aligns
• Payee is what you expect

4) Jump to Cash Coding (the turbo button)

Now the magic. Go to Cash coding to see all unreconciled line items in a table. Multi-select similar vendors (e.g., parking, software subscriptions, SaaS fees) and assign the Account and Tracking for all of them at once. Click Save & reconcile selected.

What makes Xero’s management software powerful:

• Bulk-categorizes dozens of lines in seconds
• Applies the same tracking tags (divisions/locations) consistently
• Reduces fat-finger errors from one-by-one coding

Speed trick: Sort by Payee or Amount to batch obvious repeats.

Part 3: Make Xero do the work next month (bank rules)

5) Create smart Bank Rules as you go

When you code a repeat vendor, click Options → Create bank rule (or use the “Create rule” link from Cash Coding). Then:

• If: Change “equals” to “contains” and remove reference numbers so future charges match (e.g., “CENTRAL CITY PARKING” contains, not equals “CENTRAL CITY PARKING 008274”).
• Contact: Link the payee to your vendor contact.
• Allocate: Choose one account or split (e.g., 60% Admin, 40% Operations). You can also split by Tracking Category to push costs into divisions automatically.
• Applies to: Usually All bank accounts (unless this vendor hits only one card).
• Name the rule clearly (“Parking – Travel – Split East/West 50/50”).
• Save. Next month those lines are pre-filled.

When to split rules:

• Vendor charges sometimes include reimbursable client costs (separate to a “Reimbursable” income account)
• Employees split time across divisions and you allocate payroll costs via journal or bill splits
• Software bundles with multiple components you track separately (e.g., “Ops Tools” + “Marketing Tools”)

Part 4: Tracking Categories = insights on demand

6) Use Tracking Categories (not sub-accounts) to see your business clearly

Xero’s tracking categories are like flexible “labels” for any transaction. I love them for:

• Divisions/Lines of Business (e.g., Services vs. Digital Products)
• Locations (East, West, Online)
• Project or Program types

Set them up in Accounting → Advanced → Tracking categories. In Cash Coding, you can assign the right category while you code (or split across categories).

Why this financial data matters:

Your P&L by tracking category becomes a goldmine. You’ll see profitability by division/location without messing up your chart of accounts.

Part 5: Review reports the smart way

7) Profit & Loss (P&L) — high-level sniff test

Go to Accounting → Reports → Profit and Loss for the month. Ask:

• Does Total Income feel right for what you invoiced?
• Any negative expense (likely a refund that might belong to income)?
• Any odd spikes (e.g., $0 travel all year → $3,000 this month)?
• Margins holding steady?

Click into any weird lines and reclassify if needed (Options → Unreconcile or Edit if you coded something off).

8) Balance Sheet — the reconciliation buddy

Open Balance Sheet as of month-end. Compare:

• Bank accounts to your actual bank statement balances
• Credit cards to card statements
• Accounts receivable (invoices due) to your aged receivables
• Accounts payable (bills due) to your outstanding bills list

If cash or card balances don’t match statements, don’t panic—finish Section 6’s Period Reconciliation to find the culprit.

Part 6: Use Period Reconciliation to catch errors (Xero’s new flow)

9) Reconcile the period (not just the lines)

From Accounting → Bank accounts → Reconcile Period, choose your account and:

• Set Opening balance to your last reconciled statement ending balance
• Set Start/End date to your statement period (e.g., Oct 1–Oct 31)
• Enter the Closing balance from your statement
• Start reconciling

Look for the Difference at the top:

• Green / $0 = chef’s kiss; close the period
• Positive/negative difference = something’s off

Where issues with financial reporting hide:

• A transaction on the last 1–2 days that hit Xero but not the bank yet (uncheck it and let it roll to next month)
• A duplicate import (delete one)
• A missing line due to a temporary bank-feed disconnect (create a manual transaction)
• Transfers coded to expense instead of Transfer (fix to “Transfer to/from” so both accounts reconcile

7) Close it properly with Period Reconciliation

Accounting → Bank accounts → Reconcile period

• Choose the account.
• Enter Opening balance (prior statement end), Start/End dates, Closing balance (current statement end).
• Click Start reconciling.

You want Difference = $0 (green). If not, check:

• A transaction on the last 1–2 days hit Xero but not the bank yet → uncheck and let it roll to next month.
• A duplicate import → delete the duplicate.
• A missing line (feed hiccup) → add a manual transaction.
• A payment coded as Expense instead of Transfer → fix to a Transfer.
• A bank transactions rule mis-fired → edit and re-apply.

When Difference is $0 → Close period. Repeat for credit cards.

8) Your Month-End Xero Checklist (copy/paste)

Bank/Cards

• All bank/credit cards connected and up to date
• Reconcile: approve matches
• Cash coding: bulk-code remaining lines
• Build/adjust bank rules for repeats
• Period reconciliation closed at $0 (each account)

Sales & Bills

• All customer payments applied to invoices
• All vendor bills recorded/paid or scheduled
• A/R & A/P aging reviewed (no stale items)

Reviews

• P&L sanity check (spikes/dips explained)
• Balance sheet agrees to statements
• Cash pulse taken (enough runway for next payroll/taxes)

Housekeeping

• Attach key receipts (mobile app = snap & attach)
• Back up/download month-end reports (P&L, BS, CF)
• Note any questions for your bookkeeper/CPA

9) Common mistakes (and quick fixes)

1) Rules too strict

Using equals with a changing reference number → future charges don’t match.
Fix: Use contains, remove trailing numbers.

2) Double imports

A temporary feed disconnect + manual upload = duplicates.
Fix: Sort by date/amount, delete dupes, re-reconcile.

3) Transfers coded as expenses

Cash leaves one account and never arrives in the other.
Fix: Recode to Transfer (choose the other account).

4) Refunds coded to expense

Netting expenses negative (or hiding revenue adjustments).
Fix: If it’s customer-related, code to an income account (or reverse the original).

5) Ignoring tracking

Your divisions look unprofitable because nothing was tagged.
Fix: Cash-code with tracking, run P&L by tracking, build rules that include tracking splits.

6) Skipping the period close

Balances “look fine,” but one missing $397 charge throws off year-end.
Fix: Close the period monthly. It’s the safety net.

10) Catching up more than one month

Behind a quarter (or a year)?

• Do one account at a time, newest month first to build rules fast.
• Then run period reconciliation month-by-month (or by quarter if needed).
• Spot a persistent difference? Break the range into smaller windows to isolate.

11) Coming from QuickBooks Online? Read this.

• You don’t have to wait until January 1 to switch.
• Import historical bank lines and start coding in Xero now.
• Xero uses Tracking Categories (not sub-accounts) for segment reporting—more flexible.
• Recreate your recurring vendors as bank rules quickly (use contains).
• After your first full month, run P&L by Tracking to validate your segmentation view.

Best Xero deal (often better than the public site)
Still choosing and accounting program? Use my free accounting software decision tree.

12) Pro tips that save hours

• Keyboard and multi-select in Cash Coding = serious speed.
• Attach receipts from the mobile app right after purchase.
• Batch-pay bills via your AP tool (BILL/Melio) so bank feeds show cleaner patterns Xero rules can recognize.
• Lock prior periods after you file taxes to prevent accidental edits.
• Schedule a Money Monday—15–20 minutes weekly beats a 4-hour scramble.

13) What “done” looks like

When you’ve finished the flow:

• Reconcile tab shows 0 outstanding lines for the month.
• Reconcile Period shows $0 difference and is closed.
• P&L and Balance Sheet pass your sniff test and agree to statements.
• Rules are in place so next month is mostly click-OK, click-OK, done.

Ready to move faster in Xero?

• Grab my best-available Xero deal: jamietrull.com/xero
• Compare Xero vs. QuickBooks vs. FreshBooks and find your fit: jamietrull.com/accounting
• Learn how to turn clean books into bigger profit (my book Hidden Profit): jamietrull.com/HiddenProfit

Sponsor/affiliate disclaimer

Some links above are partner or affiliate links, which may provide me with a commission or bonus at no additional cost to you. I only recommend tools I use or genuinely believe will help small business owners. This article is for educational purposes and not tax, legal, or accounting advice—please consult your own advisor for guidance specific to your situation.

This transcript was generated from the video for your convenience, but it may contain typos or slight errors due to the transcription process. For the most accurate and complete information, we recommend watching the full YouTube video.

Monthly Bookkeeping Workflow in Xero Accounting Software

If you’ve been known occasionally to put off your bookkeeping, you are not alone. Bookkeeping is not the most exciting thing in the world, and to be honest, even I, a person who loves numbers puts it off from time to time, but I’ve personally found that since switching from QuickBooks Online to zero this year, I’ve actually kept up a lot more with my bookkeeping than usual. And some of that is because I feel like it’s a lot more user friendly and it’s actually a lot quicker for me. In Zero than it was in QuickBooks Online. So make sure to watch this because today I’m going to actually do a walkthrough of what I do each month for my bookkeeping, and a lot of the tips and tricks that I have realized and have started using in my own bookkeeping, that can help save you time. So whether you are trying to catch up on the last month or maybe all the way back to January 1st, don’t worry. No judgment. I’ve got you and I’m gonna show you how to do it without giving up your entire weekend to make it happen. Hey friends. I’m Jamie Troll, CPA, and Financial Educator, and on this channel I bring you all the things you need to keep you informed, organized, and profitable in your business finances. So please make sure to hit that subscribe. And make sure to stay until the end because I’m gonna show you the number one thing you can do in Zero to make sure your books are accurate and find any costly mistakes before we get to tax filing season. Now, before we jump into the full walkthrough, if you have not yet signed up for zero and are considering it. Please make sure to use my link. We have some special deals that you will not get directly on the Xero website. We have specially negotiated them for our audience. So go to jamie troll.com/zero to see the current deal. And trust me, you’re not gonna want to miss out on it. So now I’ve jumped into the demo company and we’re gonna walk through what I actually do each month when I am catching up on my bookkeeping.

Bank Reconciliation and Cash Flow Management Software Features

So in here you can see that when we go to this dashboard, one of the first things you’ll typically see unless you’ve customized it. Um, and you can move things around however you want to. However, what you’ll see is. Likely a listing of your checking accounts, your bank accounts, and your credit cards. And you’re gonna see what the statement balance is and what the balance in zero is, and if there’s a difference. And likely if there’s a difference, you’re probably gonna see a place to go ahead and reconcile those items. Outstanding. So you can either go ahead and click on that. Or you can go up to accounting and go to bank accounts and it’s gonna take you to a similar place where you can see all of those bank accounts and see how many transactions you need to reconcile. So I’m gonna go ahead and click reconcile 29 items. So here’s the screen you’re gonna go to, and if you’re in zero, you’re probably familiar with this. And so you’re gonna see each transaction, the, these are the transactions that are coming. From your bank statements, and then essentially you’re gonna match each of those with a transaction in zero. So some of them will have pre-populated, and I’m gonna show you some tricks to make sure even more pre-populate, but some will have pre-populated and some of them won’t. And so you’re gonna go through that. You are going to accept the transactions, and for the ones that don’t have any coding, you can add coding. Now, before I go through that, I wanna show you some of these other cool features because this actually took me a while to realize this existed in Xero, and once I did it was a total game changer. So that’s the reconcile tab. I usually do start here and go through. Accept things like this that I know are being matched with, with other transactions or transfers that have been identified.

Xero: Rules, and Management Software Efficiency

So I’ll go through and just make sure those are correct and match those. But then I’ll often go to this cash coding tab and I think this is just genius and it’s very different. Um, it’s something that I wish existed. In this way in QuickBooks Online. And when I saw it in here, I just thought it was absolutely genius. So this is a different way of looking at it. So you can see all 29 on one quick screen right here. And notice that we have several that are the same, right? So on this tab we can actually do bulk actions that are gonna be much. Faster. So you’ll notice that only a few of these actually have accounts that are already pre-populated. One of the things that we’re gonna go and do is create some additional rules that will make it such that more of this will pre-populate. But if you’re trying to catch up and you don’t really have time to do all of those rules. So what we can go ahead and do is we can do this in bulk. So see there’s multiple things that are listed as central city parking. So you might even have months of transactions coming through. And you can go ahead and actually just click on those. Um, and then what you can do is either apply a rule, right? So if you have a rule, you can go ahead and apply that if it didn’t apply. Or you can just click and say, you’re gonna assign this to a specific account and look, it will go ahead and, um, assign it to all of the ones that you had checked, which is awesome. And then similarly, if you have set up any kind of tracking categories, I actually have a whole video on tracking categories because I love them so much. But if you have set up any tracking categories, it doesn’t have to be region, you can have your own. Um, but in this case they used region. You can do the same thing here. And if you wanna go ahead and assign a tracking category, it’ll assign it to all of them that you have checked.

Bank Reconciliation Accuracy and Financial Reporting

So this is a really easy way to do things quickly. So I’m gonna go ahead and press save and reconcile selected. Okay. And then they should disappear off of here because they’re no longer uncoated. Those have now. Been, uh, coded, and so you’re gonna see them showing up over on, on, on this account, transactions as coded, right? So now they’re saying they are reconciled when zero says they’re reconciled. That just means that we have essentially. Accepted. We have, we’ve coded them to a category and we’ve accepted these transactions that came in through our bank account. So that cash coding is one way to make a lot of transactions go a lot faster. You don’t have to go down one by one like you would maybe on this reconcile tab instead of going in here and having to, you know, type in something each and every time and re-add it in. You can do that, uh, in bulk. Now, like I said, before I even do cash coding though, I will typically go through and match up anything that is already being suggested for me. So it will change color if there’s already a suggestion and there will be an okay button. So in that case, I’ll go down through and it looks like this is matching up a payment that exists. So we’re gonna go ahead and we’re going to accept those. Again, make sure that it. It makes sense and that it tracks with what you think that it will. Again, this now, um, it’s not colored, but you can see there’s an okay button. That’s because there’s a rule involved.

Xero’s Advanced Bank Reconciliation and Accounting Software Controls

So you can see the apply Rule seven 11. You can click on this rule if you wanna review it and make sure that it still applies and it’s the right. Rule or you can edit the rule in here, right? Um, and rules are an amazing way to be able to make this so much faster as well. So I’m gonna show you how to create rules, because that’s another great way to do this really fast. So if we scroll down, one thing you’ll notice is I accidentally didn’t accept one of the central city parkings on the cash coding tab. So it’s still sitting here to be selected, but you’ll notice now, unlike before. It’s actually suggesting an account, and that’s because it’s using its smart ai and it’s remembering that you had just reclassified all of those central city parking as travel. And so it’s gonna go ahead and suggest that for you, which is great. And it’s already pre-populated as well, the tracking category to agree with what we had previously. So one thing that I like to do though, so that you know each and every single month, I don’t have to go in and. You know, test this and make sure it’s coming through right? I will often go in and create a rule. So you can do that under options. Create bank rule, and you’ll see you can have spend money rules, receive money rules, and transfer money rules.

Management Software Strategy: Financial Statements, and Cash Flow

Most of mine are spend money rules, and what you can do is set parameters right? So you’ll wanna check these and just make sure that the parameters make sense. It’s gonna pre-populate it for you, but sometimes you might need to change things to make it a little bit looser, because sometimes the parameters will be a little bit. Too stringent and it could miss things. So for instance, here we’re saying if the payee equals Central city parking, you could also add a condition if you wanted it. Um, maybe you have a couple different types of transactions with Central City parking. Some of them are parking and some of them are something else. And so what you can do here for the ones that are parking is you can say maybe, and the amount equals $12. So if you know you pay that every time, you might add that, or if you just want. Everything that central city parking, regardless of the dollar amount to be classified as travel, then you can x this out. Um, so this is another thing you also might want to do, contains, so I do contains like, let’s say there was a number behind this, um, like a transaction reference number. Then, um, you might actually wanna change this because. You may not have future, future transactions may have a different number at the end of it, but still be central city parking and you still want them to be travel. So in that case you might say, um, you know, equals uh, or contains and get rid of this number on the back of it.

Balance Sheet Review and Closing the Period

So just be mindful when you’re setting these, that you’re looking at the conditions to make sure that. When new transactions come in, it will pick them up as something that should be subject to this rule. And then you’re gonna put in your contacts. So if you already have one, it’ll show up. In this case I do. Or you could create a new one. And this is cool too. You can actually allocate line items. So right now it’s just saying everything’s gonna go to, you know, one account. But let’s say, um, we wanted half of this to go to travel for some reason. And then we wanted, um, another half of it to go to, let’s say office expenses. I don’t really know why in this case parking would go to office expenses, but just bear with me. Um, then we can put that 50% there and it will actually split that for you. So you can put in a description of why you’re splitting it, or this is maybe the, um. Central City parking 50% to travel, right? So you can do this so that you remember exactly what it is. So if you have, um, various different things that you like to split out or maybe, maybe this all goes to travel. Right. In this case, let’s say this all goes to travel, but half of it is for, you know, one uh, tracking category and another half is for another.

Monthly Bank Reconciliation and Accurate Financial Statements

Then you might do that. I do that. I actually have different divisions in my business that I use these tracking categories for, so sometimes I have expenses that I split between various different. Tracking categories, different divisions, and so I can actually set it up to do that. So sometimes I’ll allocate out payroll to my different divisions for somebody who works on both divisions, right? I might split their time 50 50 so that it’s popping up in the right division. On my profit and loss. So there are lots of different ways that you can use this. Now I’m gonna go back to just having this be 100% to um, travel like I did the other ones. And then again, you can decide does this apply to just this checking account, to the savings account or all bank accounts? No matter where you actually. Incurred the expense. Um, and then you can name the rule. So in this case, a lot of times I just put whatever, you know, it typically comes up as, but if you have multiple different rules, you might, um, put more of a descriptor in there and then you can save it. And the great thing now is you’re seeing that it is suggesting the rule already for you. And in the future, whenever you have a similar expense, it is going to. Already have this rule pre-populated. So like I said, we’re gonna go through and we’re gonna accept everything. Again, these are matches already, so we’re gonna go ahead and accept those, assuming it makes sense, um, what those matches are.

Final Reconciliation, Error Detection, and Ongoing Management Software Habits

And then again, here we have. You know, this seven 11, that’s a rule. When it doesn’t have the little blue thing right here, that means that it’s just a suggestion. So you definitely want to check it and make sure that yes, I agree with how it’s categorizing this. And, um, add any other information that you want in there. And then that’s just gonna leave us with, um, a certain number of transactions that have not been accepted. And this is where I really go and use that cash coding section. So now in this cash coding, we can go down and do exactly what I showed you, which is we can accept anything that is going to actually be a similar categorization, right? So if you have multiple different things that actually are, um, for similar items and we’ll have a similar categorization, you can do this all at once. Let’s say, uh, that these accounts are printing and stationary, right? We can go ahead and do that, and it’s going to apply it to all of them. And then we can save and reconcile. So I’m gonna go through and just quickly categorize the rest of these, um, and then I’ll show you what the next steps are. So I just did all that in less than a minute. Obviously, if you have more transactions to go through, it’ll take a little bit longer. But again, that bulk cash coding is going to be clutch when you. Are trying to do lots of different expenses quickly.

Reconcile Period, Balance Sheet Checks, and Confident Cash Flow

And the other thing is, before you go ahead and press save and reconcile all, here’s a recommendation I have for you. Um, this is a little hack. So if you did this, and you know, for example, every single time that this ACL conferences comes up in the future, you want it to go to travel. You can go ahead even from this screen and press this button and create bank rule. Um, you can also split this if you want it to be in multiple different accounts, you can split it. But again, we can go here and we can create yet another bank rule so that next time. Uh, it will be a lot easier. Here’s one of those examples where you may want to remove this. So you have payee equals, and then it’s gonna give you a description and that’s really specific. So maybe that number changes every single time. And if we put this in here, it is not gonna catch that it should be categorized to this bank rule. So a lot of times I will. Um, go ahead and delete anything that’s overly specific, um, when I’m doing a rule like this. So I just went ahead and accepted all of those transactions I just coded. And you can see we get a little bit, um, of a thing that says, great job. You’ve reconciled all transactions for this account.

Financial Reporting and Year-Round Cash Flow Confidence

Again, that just means that we’ve categorized them. We do still need to reconcile the period, which I’ll talk about here in a minute. But before we get there, I want you to also see if we go to account transactions. You can now see all of these and they should all say reconciled. Now if you realize, uh oh, I actually messed something up and um, I didn’t categorize that correctly, that’s okay. You can go into that and you can actually go to options. And you can un reconcile. You can edit the transaction or you can remove and redo. So I typically just un reconcile. It’s gonna give you a note. And then when you’ve done that and you go back to the main tab, you will see it showing up now on the reconcile tab as unreconciled. So you can change anything if you wanted to or find a different match or something like that. So once I’ve gone through one account and accepted transactions and categorized things, then I’m gonna go through any other accounts that I might have. So I might have other checking accounts or savings accounts, or even credit card accounts that I can go through and do the same thing and go through each account transaction and use those reconcile and cash coding codes to make sure everything is coded properly. So now that you’ve caught up on your bookkeeping, how are you supposed to know if it’s actually correct?

Xero Software: Financial Statements, and Closing the Period

And this is where things can get tricky. Unfortunately, in any bookkeeping software, there is a lot of room for things that can go wrong, maybe just based on how you categorized it or how things were set up. And what we don’t wanna do is end up paying too little in taxes or too much in taxes because our bookkeeping was wrong. And that is where bank and credit card reconciliations come in. Now, Xero recently updated this feature and I really love what they did, so I’m gonna walk you through how to use the reconciliation feature and what exactly to do if something does not reconcile. Now remember, the purpose of reconciliation is to make sure that all of your bank and credit card transactions actually came through accurately to your financial statements and also weren’t double counted. So we can do this by comparing our bank balances and our bank transactions to what we have in our accounting software, and Xero makes this super easy to do so even if you haven’t reconciled your bank account. All year. I’m gonna show you exactly what you can do now to find those problems, or hopefully realize that everything is reconciling out and you’re good to go. So the next step we’re gonna walk through is the process of reconciling. The period.

Balance Sheet Review, Reconcile Period, and Management Software Discipline

So this is gonna help you make sure that everything that’s on your bank statements or credit card statements has come through to your general ledger and that you don’t have anything that’s either missing or double counted. But before we get there, I wanna give you actually a peek behind what I do first. So before I even do that, I wanna make sure things are looking. Relatively how I would expect them to. And so once I’ve accepted transactions, now I can go and go to reporting and check out my financial statements. So I’ll usually start with my income statement, and hopefully you have a decent idea of what your total income and total expenses should look like. And so you can take a look down through this and see if it looks like you expect it to or if it’s somehow wildly off. So if something is off, then this is a good place to go in. Maybe you see categories. Um, that should not be there, right? Like maybe you realize why is this, you know, consulting and accounting negative, that doesn’t make any sense. You can actually click into this and take a look at how those transactions were coded. And so in this case, it looks like there was actually a credit that was received and maybe this was miscategorized and should actually be showing up as income.

Balance Sheet Comparison, Bank Reconciliation, and Closing with Confidence

Perhaps it actually is correct there, and it was some kind of rebate that you got that should be showing up in consulting and accounting, but you can make that decision. But that’s the first thing that I will typically do is go through and choose a period. Maybe you choose just the period for the transactions you were just looking at and make sure everything looks like you would expect it to and to go ahead and drill in a little bit if anything looks out of place. And the other thing that I will do is I will go check out my balance sheet. Now you may not be accustomed to really spending a lot of time on your balance sheet, but it is really helpful when we talk about reconciliation because your balance sheet is gonna give you a picture of your financial statements at a point in time, which is really beneficial because you can actually take those balances and compare it to what you are seeing elsewhere, uh, on your bank statement or your credit card statement, and make sure that it looks. Correct. So for example, if we’re running this as of the end of October 31st, 2025, again, we’re looking at a period a point in time. So you wanna make sure that you’ve accepted all the transactions before this and you can look down and say, okay, does this look right? Does, is that what is actually in. My checking account.

Fixing Differences, Closing Periods, and Year-Round Cash Flow Management

If so, you’re probably in good shape. If that agrees to your bank statement as of the end of October, you’re probably golden. However, I’m still gonna have you go through the reconciliation process if that doesn’t agree, and that is not uncommon to happen. Sometimes it’s normal and because of some little timing things, sometimes there might be bigger issues at play. But if that doesn’t agree. Or if, let’s say your credit card balances, which will show up under your liabilities, don’t agree, then we definitely need to spend some time reconciling the period, and that’s gonna help us ferret out what is causing this problem and figure out a way to fix it. So then the next thing we’re gonna do is we’re gonna come back to our bank accounts tab, and we are going to now go over to reconcile period. And this is key. Now, typically, you may not see anything here. I’ve already started this one, but typically you’re gonna go to create period, and you’re gonna determine your, um, opening statement balance, let’s say in this case. Uh, I’m gonna reconcile for the month of October through the current date. So I believe the last transactions I had brought in were through October 21st.

Final Reconciliation, Closing the Period, and Accounting Software Confidence

Typically, I recommend doing, you know, this on a monthly basis and aligning it with your bank statement date. That’s gonna make it easiest to reconcile. But in this case, let’s say for some reason my bank statement date was, you know, October 21st. So we’re gonna put in the opening balance on October 1st, and then the closing balance, which in this case was 46 35. 64 on my bank account. And then we’re gonna hit start reconciling period. Now, I’ve already started this, so I need to come back over here, but you’ll see I’m reconciling for October 1st through the 21st. Again, probably makes more sense to do this monthly, but just for the sake of example, um, I’m gonna do it through this. And when you come in here. The first thing I look at is this number right here. I wanna see green. I want this to show me that there’s no differences. Now there is a difference that you can see here. The longer time period that that you have up here that you’re reconciling for. The more likely there is to be a difference. So if you wait nine months to reconcile and you’re trying to reconcile nine months of transactions at one time, it’s more likely that there’s going to be issues that crop up.

Identifying Errors, Bank Reconciliation, and Closing with Management Software

So you might want to instead, if you do that, you might wanna actually go back in time and start with January and do a January reconciliation. Or maybe a Q1 reconciliation to see how that goes so that you can try to figure out where the issue is coming from. Um, but in this case, I know that my issue is within these timeframes. Um, so I’m gonna take a look and try to figure out what is causing this $200 difference. So when I scroll down, I’m gonna see all the different transactions that came in that I categorized, uh, when I was doing my bookkeeping. And you’ll see that I have the check marks on here, which means they’re part of the reconciliation. So it’s pulling in all the activities. It’s gonna look at these dates and pull in all the activities between October 1st and October 21st, typically. And. What I’ll notice when I go down here, the very first place that I like to look, because if you’re just looking for a $200 difference, it could take a minute, especially if you have a lot of transactions. Look at the beginning of the period and at the end of the period, if maybe at the beginning of the period you have a leftover transaction from say, September, that didn’t get reconciled.

Closing the Period, Bank Reconciliation, and Confident Financial Statements

It might be sitting there and not have a check mark on it. So if you check it, that might bring your difference down or. At the same time, you might go to the end of the period and see, okay, on the last day or two of the period, maybe there’s a transaction that came through in zero but didn’t actually hit my bank statement just yet. Right. Maybe it’s gonna show up. ’cause sometimes there’s a couple a day delay in the timing of, um, those cash payments. So in this case, that’s exactly what happened. I see that I had a, um, expense on. October 21st of $200. It’s great when it matches like that. And if I uncheck this, that means don’t include this. Essentially it’s gonna roll this over to the next month, and that should pick up in the next month’s bank statement. So if I come up here now, I can see that the balances. Match, yay raw. And then when I’m done with that, I can click close period. Now I’ll be the first to admit that it isn’t always quite that easy. Sometimes again, it is, uh, a little bit more delving into the numbers that you have. To do in order to find an issue.

Bank Reconciliation, Cash Flow, and Management Software Success

If you have significant issues, it might be time to enlist a bookkeeper to help you figure those out and figure out why it happens so that you can prevent it from happening again. But in this case, I’m just gonna go ahead and I’m gonna close my period. And then it’s gonna show that this is a closed period. So that means I’ve reconciled my bank accounts through October 21st, and I can have confidence that what is showing on my financial statements is correct. It’s not missing any transactions, and it’s not double counting any transactions, which is what we want to see. So hopefully this video showed you how quick and easy it can be to catch up on your bookkeeping in Zero, and I highly recommend getting into the groove of doing this each and every month because then you won’t have to scramble to get everything together and to figure it all. Out at tax time. Using a smooth process flow like the one that I just showed you in order to keep up with your bookkeeping is going to be key to making sure that you can keep up with it year round. Not only that, I love X’s interface. It makes it super easy, especially with all the different rules that you can utilize and that will cut down on the amount of time it takes you each and every month.

Accounting Software Comparison and Ongoing Management Software Benefits

Not only that, they have a great mobile app where you can keep up with things on the go. Now if you’re still trying to decide if zero is right for you. Don’t worry, I’ve got you. I recently did a video that actually compares QuickBooks Online and the experience that I had using that for six years and my experience in Xero, so you can see a little bit more about how they compare if you’re trying to decide if you wanna switch from QuickBooks online or if you’re trying to decide between signing up for QuickBooks online. Or for zero. And of course, if you do choose to sign up for zero, go to jamie troll.com/zero to do that so that you can get in on those special deals and discounts. Thanks for joining me and I’ll see you next time.