📋 How to Use This Checklist
Check Off Tasks: Click each checkbox as you complete tasks to track your progress
Expand Details: Click on any task header to reveal detailed step-by-step instructions
Track Progress: Watch the progress bar fill as you complete your bank feed processing
Follow Pro Tips: Read blue tip boxes for expert advice and time-saving shortcuts
Heed Warnings: Pay attention to yellow warning boxes for compliance and accuracy
Use Regularly: Process bank feeds weekly, fortnightly, or monthly for best results
Getting Started: Work through tasks 1-10 in order. Each task builds on the previous one. New to bank feed processing? Expand all sections first to familiarize yourself with the complete workflow.
📺 Video Learning Resources
Xero Official Video Tutorials
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0% Complete (0 of 10 tasks)
1. Access Bank Feed Screen
Navigate to Bank Feed Processing:
- Log into Xero and go to Dashboard
- Click on "Banking" in the left navigation menu
- Select your bank account from the list
- Look for imported bank feed transactions showing as "For Review"
- Check the transaction count - this shows how many need processing
- Verify the date range of transactions to be processed
- Ensure your bank feed connection is active and up-to-date
Pro Tip: Green indicator means feed is connected and importing. Red means there's a connection issue that needs resolving.
2. Review Suggested Matches
Process Automatic Matching Suggestions:
- Look for transactions with blue "Match" suggestions
- Click on each suggested match to review details
- Verify the amounts match exactly
- Check dates are within reasonable timeframe (usually 1-5 days)
- Confirm the contact/supplier is correct
- Review invoice numbers and references
- Accept matches by clicking "OK" if confident
- Reject incorrect matches and process manually
Double-Check: Always verify large amounts over $1,000 manually. Auto-matching can sometimes suggest incorrect invoice matches.
3. Create New Expense Transactions
Process Unmatched Expense Transactions:
- Identify outgoing payments (negative amounts) without matches
- Click "Create" → "Spend Money" for expense transactions
- Select or add the supplier/contact
- Choose appropriate expense account (Office Supplies, Utilities, etc.)
- Enter description with invoice/reference number
- Select correct GST rate (10% GST, GST-Free, Input Taxed)
- For GST claims: ensure you have valid tax invoice for amounts over $82.50
- Add tracking categories if used (departments, projects)
- Save the transaction to match with bank feed item
Pro Tip: Business expenses usually attract 10% GST. Bank fees, some insurance, and residential rent are typically GST-free.
4. Create New Income Transactions
Process Unmatched Income Transactions:
- Identify incoming payments (positive amounts) without matches
- Click "Create" → "Receive Money" for income transactions
- Select the customer/contact making payment
- Choose appropriate income account (Sales, Interest Income, etc.)
- Enter description identifying the payment source
- Apply correct GST rate based on your business registration
- For customer payments: try to match to existing invoices first
- For miscellaneous income: create direct receive money transaction
- Add any required tracking or project codes
- Save and verify the transaction posts correctly
Customer Payments: Always check for existing unpaid invoices before creating new income transactions. Match to invoices when possible.
5. Process Bank Transfers
Handle Inter-Bank Account Transfers:
- Identify transfers between your own bank accounts
- Look for matching amounts on same date in other accounts
- Click "Create" → "Transfer Money"
- Select the "From" and "To" bank accounts
- Verify transfer amount matches exactly
- Add description (e.g., "Transfer to savings account")
- Check for any transfer fees and process separately
- Complete the transfer to match both sides
- Verify corresponding entry appears in destination account
Pro Tip: Bank transfer fees should be coded as separate Bank Fee expenses, not included in the transfer amount.
6. Handle Bank Fees and Charges
Process Bank Fees and Interest:
- Identify bank fees, service charges, and interest transactions
- For bank fees: Create "Spend Money" transaction
- Use "Bank Fees" expense account (typically 6040)
- Apply "GST-Free" tax rate (bank fees don't attract GST)
- For interest earned: Create "Receive Money" transaction
- Use "Interest Income" account (typically 4010)
- Interest income is usually GST-free
- Add clear descriptions for audit trail
- Save and match each transaction
GST Treatment: Bank fees and interest are GST-free transactions. Never apply 10% GST to these items.
7. Review and Code Unclear Transactions
Research Unknown Transactions:
- Identify transactions with unclear descriptions or amounts
- Cross-reference with physical receipts or invoices
- Check email confirmations for online payments
- Review previous months for similar transactions
- Contact the bank for additional transaction details if needed
- Ask client for clarification on business purpose
- For recurring transactions: set up bank rules for future automation
- Code to best-fit account if exact purpose unclear
- Add notes explaining your reasoning
Pro Tip: When uncertain, add detailed notes explaining your coding decision. This helps with future reference and audit queries.
8. Create Bank Rules (Optional)
Set Up Automation for Recurring Transactions:
- Identify frequently recurring transactions with same patterns
- Click "Create Rule" option when processing repetitive items
- Set up rule conditions (amount, description contains, etc.)
- Define automatic coding (account, contact, GST rate)
- Choose whether rule should auto-match or suggest matches
- Test the rule with similar future transactions
- Common rules: utilities, loan payments, subscriptions
- Review and update rules periodically
- Delete outdated or incorrect rules
Pro Tip: Well-set bank rules can automate 60-80% of routine transactions, significantly reducing processing time.
9. Verify All Transactions Processed
Final Review and Quality Check:
- Check that transaction count shows "0 for review"
- Scan for any remaining unprocessed items
- Review recently processed transactions for accuracy
- Verify GST coding is appropriate for all transactions
- Check that contact assignments make sense
- Ensure descriptions are clear and professional
- Confirm tracking categories applied where required
- Look for any duplicate transactions created
- Run a quick P&L preview to spot obvious errors
Quality Control: A quick review now saves hours of corrections later. Look for unusual account balances or unexpected large movements.
10. Document and Communicate
Complete Documentation and Client Communication:
- Note any unusual transactions or coding decisions
- Document any questions requiring client clarification
- Save or file any supporting documentation
- Update client on processing completion
- Highlight any issues or concerns discovered
- Provide summary of transactions processed
- Note any bank rules created or modified
- Schedule next processing session if recurring
- Update processing log or checklist records
Pro Tip: Regular communication about bank feed processing builds trust and helps identify issues early. Clients appreciate transparency.