We have lots of clients who do their own bookkeeping in Xero. Here are our Best Practices for managing your own bookkeeping:

• Keep your personal transactions out of the business bank account.  If you need to spend on something personal transfer funds to your personal account and pay from there!  The transfer to yourself (and any personal spending you do include) is Drawings/Shareholder Loan.
• Add your expenses as Bills or Spend money as you incur them.  This will avoid missing things.  Use Xero’s Email to Files or Email to Bills feature to get documents into the queue, or for more powerful features talk to us about Receipt Bank.

The Bank Reconcile screen is one of my favourite places in Xero. It was, and still is, what makes Xero a clear leader over the other cloud-based accounting systems. If used properly it puts an end to unnecessary data entry and reconciliations. But there is always a catch – if used properly! It is possible to be unreconciled even if you no more entries in the reconcile screen or if the Statement Balance equals the Balance in Xero.

Xero is a highly complex accounting environment. While the developers have worked wonders to make it simple and user friendly, this approach often masks the fact that it is a complicated accounting system under the hood! The bank reconciliation process in Xero, if provided with correct data and intelligent user interaction, should result in a perfect bank reconciliation where everything balances as expected. But the reality is that this does not always happen.