This is said with affection:
Please don’t help!
If you’ve hired me to look after your bookkeeping, there are few things more likely to cause confusion than popping into Xero, spotting something that doesn’t look quite right and deciding to tidy it up while you’re there.
I completely understand the temptation.
There’s a transaction waiting to be reconciled and Xero is helpfully suggesting an answer. You recognise the supplier and there’s a lovely big ‘OK’ button.
What harm could it do?
On occasion – a fair bit!
Reconciliation isn’t just ticking things off
When a transaction comes through your bank feed, it needs to be matched with what’s already recorded in Xero or recorded appropriately as a new transaction.
That could mean matching a payment to an invoice or bill, recording a transfer between accounts, dealing with a refund, splitting a transaction between different categories, considering VAT, or asking you what, specifically, you bought from Ebay for £237.46.
Xero will often suggest what it thinks should happen based on previous transactions and other information it has.
Sometimes it’s right. But often, it’s confidently wrong.
Clicking ‘OK’ doesn’t just make the item disappear from the reconciliation screen – you’re telling Xero how that transaction should be recorded for VAT and Tax purposes.
“I thought I’d fixed it…”
The trickier version is when you spot something I’ve already dealt with and decide it looks wrong.
Perhaps you change the category, delete something, reconcile it differently, or undo something because you’re certain there’s been a mistake.
The problem is that you might only be seeing one part of what I’ve done – that transaction could be matched to a bill, linked to another transaction, deliberately split between accounts or treated in a particular way because of information you’ve previously given me.
Changing it can create duplicates, leave invoices apparently unpaid, alter VAT treatment or simply leave me trying to work out why something I know I reconciled last Tuesday has mysteriously changed.
Xero itself warns that incorrectly reconciling a payment as a new spend or receive-money transaction instead of matching it to an existing invoice or bill can create duplicate transactions.
But I want you looking at Xero
I really do! I don’t want your bookkeeping to be some mysterious thing that happens behind a curtain and produces a set of numbers every few months. Look at your reports, your transactions, notice things and most importantly – ask me questions.
If something looks wrong, tell me.
Send me a message saying:
“I’ve spotted this £250 payment to ABC Ltd and it looks like it’s gone to the wrong place. Can you check it?”
Perfect! I’ll either correct it or explain why it’s been treated that way.
What I’d rather you didn’t do, is change it first and tell me afterwards – or, even worse, change it and assume I’ll somehow know you’ve been in there.
Too many cooks…
Xero is very good at keeping a record of what’s happening, but bookkeeping is much easier when there’s a clear division of responsibility.
If I’m responsible for reconciling the bank, let me reconcile the bank. That way I know what’s been dealt with, what I’m still waiting for, what queries are outstanding and why things have been recorded the way they have.
But by all means have a nose around, ask questions, query things, and tell me when something doesn’t look right.
Just step away from the reconcile button.
