Xero: Reconciling the bank account
The Bill.com Money In / Out Clearing accounts help with reconciliation.
How bills are paid with Bill.com Money In / Out Clearing accounts
If you've set debits and credits to your bank account to show as consolidated for each day, when setting up Bill.com, two new bank accounts are automatically created in Xero. These accounts aren't tied to "real" bank accounts, but instead help facilitate payments. They're often referred to as "clearing" accounts. They'll appear on the Xero dashboard.
Paying a bill in Bill.com will result in a payment being applied to the invoice in Xero. That payment will be made out of the corresponding Bill.com Money Out Clearing Account for AP invoices and Bill.com Money In Clearing Account for AR invoices.
As multiple bills are paid in Bill.com, the balance of the Bill.com Money Out clearing account will change.
Bill.com makes a single withdrawal from the checking or savings account to pay multiple bills. To facilitate reconciliation of the bank feed, Bill.com will create a bank transfer between the checking/savings account and the Bill.com Money Out/In Clearing Account.
Reconciling the Bill.com Money Out/In Clearing Accounts
Reconciling the bank transfer from the clearing account with the checking/savings account won't automatically mark the individual transactions in the Bill.com Money Out/In Clearing account as reconciled.
Within the Bill.com Money Out Clearing account, if the desired status for each line item needs to be “Reconciled”, it'll need to be manually marked as reconciled.
Before you can manually reconcile, you'll need to enable "Mark as Reconciled" on the Money Out Clearing account in Xero:
Things to know
We now make two "scheduled payment pickups" each day.
All payments scheduled before 3:00 pm Pacific Time / 6:00 pm Eastern Time on the bank business day before the Process Date will be picked up during the first pick-up run, and will be withdrawn from the bank account as a lump sum.
Any payments scheduled after 3:00 pm Pacific Time / 6:00 pm Eastern Time on the same day, with the same Process Date, will be picked up during the second pick-up run, and will be withdrawn from the bank account in a second lump sum.
- Example: Monday at 12:00 pm Pacific Time / 3:00 pm Eastern Time, three payments are scheduled with Tuesday as the Process Date (total: $ 300). Four hours later, at 4:00 pm Pacific Time / 7:00 pm Eastern Time, three more payments are scheduled with Tuesday as the Process Date (total: $ 400). On Tuesday, two lump-sum withdrawals are made from the bank account - one for $ 300 and one for $ 400. All bills are still paid on time, the same as if we had just made one lump-sum withdrawal.