When reconciling international payments in Xero, you may encounter small discrepancies between the bank feed amount and the corresponding bill. These differences can arise due to bank fees or the way Xero rounds exchange rates (Xero only accounts for up to four decimal places).
To write off small differences during the reconciliation of international payments in Xero, please follow these steps:
1. Access the bank reconciliation screen:
- Log in to your Xero account.
- Navigate to the "Accounting" menu and select "Bank accounts."
- Choose the specific bank feed you're reconciling.
- Click on "Reconcile items" to view unreconciled bank statement lines.
2. Identify the transaction with a discrepancy:
- Locate the bank statement line that doesn't exactly match the corresponding bill amount.
- Click on "Find & Match" to search for the related invoice or bill.
3. Match the transaction:
- In the "Find & Match" window, select the bill that corresponds to the bank feed line.
- If there's a small difference between the amounts (e.g., due to rounding), Xero will display a message indicating an outstanding amount.
4. Create an adjustment to write off the difference:
- Click on "Adjustments" and choose "Minor adjustment."
- Specify the "GL account" where you'd like to record the write-off
- Enter a brief "Description" for the adjustment, such as "Write-off due to rounding."
- Verify that the "Adjustment amount" matches the discrepancy.
- Click "Save" to apply the adjustment.
5. Complete the reconciliation:
- After saving the adjustment, ensure that the total amounts now match.
- Click "Reconcile" to finalise the transaction.