What Is Cash Coding & How To Use It In Xero?

Frequently asked question

Using cash coding in Xero, you can reconcile multiple statement lines relating to cash transactions in one go. When you use cash coding to reconcile a statement line, you create a receive or spend money transaction.

Where is cash coding in Xero:

Accounting Menu – select Bank accounts.
Click the bank account name that you want to reconcile.
Select the cash coding tab.

Before using cash coding, it is preferable to reconcile the following items in the reconcile tab:

Sales invoices and bills.
Credit notes refunds.
Overpayments and prepayments.
Expenses claims.
Transfer between bank accounts.
Any spend or receive money transactions already entered.

You can use cash coding for the below:

Apply bank rules:

Select the checkbox next to each bank statement line, then choose an existing rule from the Apply rule.
If you want to apply the same rule to multiple statement lines, select each statement line. Click Apply rule, then select the rule you want to apply.

Enter details manually using cash coding:

You can fill out the relevant fields manually and reconcile in bulk for any other statement line that you didn’t apply bank rules.

1- Code and reconcile lines with the same details:

Select the checkbox for each statement line with the same details that you want to code.
Select the account you want to allocate the selected statement in the Account field. The selected account is automatically applied to all lines, when you move to the next field.
Enter the details in the other fields.
Click Save and reconcile.

2- Split a transaction

You can use this option, if the transaction involves different accounts, tracking categories or tax rates.

Click the arrow at the end of the bank statement line, then select Split.
Enter the transaction details, then click Save.
Click Save and reconcile selected.

Cash Coding Tips:

To avoid losing any changes, sort statement lines by a specific column to group similar transaction lines together.
Click Shortcut keys to view time-saving shortcuts.
To see the suggested match in Xero, select the Show line with suggested matches checkbox. It would appear a green tick at the end of the statement line if there is a suggested match.
Reconcile fewer than 100 statement lines at a time.
To avoid creating duplicate contact, in the paye field, start typing the contact’s name and select from your contact list.
Hover over the note icon to view a comment added to the statement line.
Click the bank account name to easily switch between bank accounts.
Create bank rules for regular transactions while cash coding, so you don’t have to code them again next time.