Getting your Xero in order for the end of the financial year can seem daunting, especially if you have been a bit lax with your bookkeeping and getting it all up to date seems like a mammoth task. The aim of this blog is to help guide you should you decide to give it a go.
Financial Year End
The idea is to ensure that the data for the whole year is on Xero, and that it is accurate. As great as Xero is, sometimes there may be small issues in the bank feeds duplicating transactions or dropping throughout the year resulting in gaps in the data. There are a few things that can make this process easier for you.
Setting up and maintaining bank feeds
Setting up bank feeds in Xero is the easiest way to get all of your data onto Xero. Much like visiting your dentist, if you check-in regularly and ensure your bank feed is still connected and importing transactions it will save many potential headaches (or toothaches) in the long run. However, we recommend that you check-in with your bank feeds on Xero a bit more regularly than you might visit the dentist.
Post all the transactions for the year – in the correct place
If there are outstanding transactions that are sat on the bank screen and need posting, you will not be able to get accurate data for the next steps in the spot check. All the transactions that fall before the financial year end need to be posted. This process is best done regularly to avoid a build up.
It isn’t just enough to post your transactions though. The transaction needs to go into the correct place. For example, loan repayments need to go to one place (which will be on the balance sheet) and payments to your accountant will go to another place (which will be on the profit and loss).
Does Xero agree to the bank statements (is your bank reconciled)?
This is the step where you cross your fingers and hope that the balance on Xero matches the balance that you have on your bank or credit card statements, resulting in your bank being reconciled. To do this, run a reconciliation report for the last day of your financial year. If the figure on Xero is the same as the figure on your bank statement, then happy days.
Help! Xero and my statements don’t agree
If you find yourself in this situation, you need to locate the discrepancies in data. There are a couple of things you can do to try and solve the problem:
- Check there is data for the whole year
The easiest way to check there is data for the whole year is to pull up a monthly profit and loss report showing the data over a 12 month spread. From here, you can usually see if there are any large gaps. If there is a whole month with no numbers, it is usually a good indicator that there is probably some information missing (possibly due to your bank feed dropping out). - Look for duplicates
Duplication of data can occur when bank feeds go slightly awry and important transactions twice, or perhaps transactions have been uploaded manually as well and being imported by the bank feed. To check for these, look at the accounts transactions area and check the dates. If there seem to be duplicates you can then look around these dates to see the problem period and delete any transactions that are duplicated.
Alternatively, you could just get in touch with us here at Hive and see how we can help you make your Xero end of year ready.
