If you have chosen to reconcile with Xero using a Settlement Account this article will explain how.
There are two ways to do this:
Option 1: Manually creating an entry for each line on your bank statement.
Option 2: Automatically using a transfer rule to create the matching entry.
See instructions for both processes below.
Manual bank reconciliation in Xero
- When you setup Xero integration with SimpleClinic you will have selected a "settlement account". A settlement account is simply a virtual account in Xero for your business, and will hold transactions from SimpleClinic, before they are allocated or "reconciled" to other accounts in Xero.
- The settlement account was created in Xero as a current asset account that was BAS excluded and able to take payments. During the reconciliation process you will be transferring funds from the settlement account into the matching bank account for your business.
- Your bank reconciliation will have lines for each merchant settlement from your bank and from HICAPS if used. See screenshot.
- Add a contact in the Who field on the right hand side. This is not the invoice name. The invoice name and payment is already tracked against the contact. Use a contact name like "Merchant Settlements".
- From What field, select the settlement account when you initially setup your Xero integration.
- Make sure the Tax Rate is set to BAS Excluded. It should select this automatically from the account.
- Click the green OK button and that merchant summary will be reconciled. Repeat for as many merchant summaries you have in your bank statement or bank feed.
You can create a rule to match each of the merchant settlement transactions automatically.
- To create a rule, select the Create Rule drop down in Xero.
- Filter the list of conditions that appear in step 1 to define a condition that matches your specific bank / settlement combination.
- Set the contact. Use or select a contact name like "Merchant Settlements".
- Leave Step 3 as is.
- Complete Step 4 choosing your settlement account and ensuring the tax rate is BAS Excluded.
- For Step 6, select any bank account to run the rule against, or select to run the rule against all bank accounts.
- For Step 8, give the rule a name and click Save.
This will now automatically apply the rule to matching bank statement lines.
Also, if you are using HICAPS, you can create a matching rule for HICAPS transactions.