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
When setting up Bill.com, two new bank accounts are automatically created in Xero. These accounts are not tied to "real" bank accounts, but instead help facilitate payments. They are often referred to as "clearing" accounts. They will 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 reconcilation 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 will not 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 will need to be manually marked as reconciled.
This video shows how to Enable Mark as Reconcile on the Account Transaction screen to reconcile multiple transactions at once.
Things to know
We now make two "scheduled payment pickups" each day.
All payments scheduled before 3PM PT on the banking day before the Process Date will be picked up during the first pick up run, and will be withdrawn from the bank account as a lump sum.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after 3PM PT on the same day, with the same Process Date, will be picked up during the second pick-up run, and will be withdrawn from the bank account in a second lump sum.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 12PM PT, three payments are scheduled with Tuesday as the Process Date (total: $300). Four hours later, at 4PM PT, 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.