The short answer
Confused by different balances in Xero? Learn the simple reasons your transaction balance may not match your bank balance.
In short: Xero shows two balances for each bank account: the balance in Xero, based on reconciled transactions, and the statement balance from your bank feed. They usually differ because of unreconciled transactions, payments marked as paid in Xero that haven’t been matched, or duplicate and deleted lines. Reconciling regularly brings them back together.
What are the two balances?
Statement balance: what your bank says, imported through the bank feed.
Balance in Xero: the result of the transactions recorded and reconciled in Xero.
When everything is reconciled and correct, they match.
Why don’t they match?
Unreconciled bank lines: transactions in the feed that haven’t been matched or coded yet.
Payments marked as paid but not matched: a bill or invoice marked paid in Xero that hasn’t been matched to the bank line, which can create a duplicate.
Duplicates: the same transaction entered manually and also reconciled from the feed.
Deleted or missing statement lines: a line removed from the feed or missing after a feed disconnection.
Opening balance issues: the starting balance was entered incorrectly when the account was set up.
How do you find the difference?
Check the number of items to reconcile on the dashboard and work through them.
Run the Bank Reconciliation report for the account and date. It shows the statement balance, the Xero balance and the items causing the gap.
Compare a bank statement from your bank with the Account Transactions report for the same dates.
Look for duplicates around the date the balances first drifted apart.
A typical Melbourne scenario
A Kew physiotherapy clinic’s Xero balance was $4,800 higher than the bank. The reconciliation report showed two supplier bills marked as paid manually and then reconciled again from the bank feed, plus one missing statement line after a feed outage. Removing the duplicates and importing the missing statement fixed the difference in under an hour.
How do you stop it happening again?
Reconcile weekly, so problems are small and recent.
Avoid marking bills as paid manually if the payment will come through the feed.
Check the feed is connected after bank changes.
Have a bookkeeper review the reconciliation report monthly.
Key takeaways
Xero shows a reconciled balance and a statement balance.
Unreconciled lines and duplicates are the usual causes of a mismatch.
The Bank Reconciliation report pinpoints the difference.
Weekly reconciliation keeps them in sync.
General information only.
See our Xero bookkeeping and small business bookkeeping services, or read tracking categories in Xero.
Marissa has over eight years of bookkeeping experience and a genuine passion for helping businesses take control of their finances. She's proactive, precise, and committed to making bookkeeping easy, accurate, and stress-free for every client she works with. Whether it's reconciling accounts, tracking cash flow, or streamlining financial systems, she's across the detail so you don't have to be.
