Xero Bank Reconciliation Automation with AI
Match Xero bank feed lines to invoices, bills and transfers with AI, and review only the exceptions. Fixed price from €299.
Starting at
€299
Multi-step workflow with AI extraction/decisioning and 2-3 integrations.
Get a quote →Saves roughly 6-10 hrs per month per bank account
How it works
The problem
Xero's bank feed brings every transaction in, but someone still has to decide what each line is. Bank rules cover the repeat payments, and everything else becomes a pile of unreconciled lines: customers who pay two invoices in one transfer, suppliers paid in a batch, payments with a reference nobody recognises. At month end the pile gets cleared in a rush, and the coding mistakes made under that pressure turn up later in the VAT return or the audit.
What the automation does
We build a layer on top of your Xero organisation that reads each new bank feed line and looks for the invoice, bill or transfer it belongs to. It matches on amount, date, payer name and reference, and it handles split payments, batched supplier payments and part payments. High-confidence matches are queued for one-click approval, and where Xero's API allows it the match is applied for you. Anything uncertain gets a suggested account and a short reason, so your accountant spends the day on judgment calls instead of keying.
How AI does the work
AI handles 2 of the 6 steps in this automation. The other 4 steps are ordinary workflow and integration work, and your team reviews anything the AI isn't sure about.
- Match lines to documents. Each line is matched to open invoices and bills using amount, payer name, reference and date, including one payment covering several documents or one document paid in parts.
- Suggest coding for the rest. Lines with no matching document get a suggested account, tax rate and contact based on how similar lines were coded before, with the reasoning shown.
Step by step
- 01
New bank feed lines trigger
New lines are pulled from Xero as they arrive, or on a schedule you choose, together with open invoices, bills and recent bank transactions.
- 02
Match lines to documents ai
Each line is matched to open invoices and bills using amount, payer name, reference and date, including one payment covering several documents or one document paid in parts.
- 03
Suggest coding for the rest ai
Lines with no matching document get a suggested account, tax rate and contact based on how similar lines were coded before, with the reasoning shown.
- 04
Approval queue output
High-confidence matches are grouped for one-click approval, and uncertain ones are flagged with the reason so the accountant can decide quickly.
- 05
Apply to Xero integration
Approved matches and coding are applied in Xero where the API allows, and otherwise handed back as a ready-to-use list for the reconcile screen.
- 06
Keep an audit trail integration
Every match and every override is logged with who approved it and when, ready for month-end review.
Inputs
- Xero bank feed lines
- Open invoices and bills
- Chart of accounts and bank rules
- Past coding decisions
Outputs
- Matched and coded transactions
- Approval queue with reasons
- Exceptions list
- Reconciliation audit log
Works with
Prefer a fully custom build instead of an off-the-shelf integration? We confirm which applies when we confirm your price — most jobs like this one work fine on standard connectors, but higher-volume or non-standard systems sometimes need bespoke API work, reflected in the complex tier.
Where this goes wrong if you get it wrong
- Matching on amount alone creates wrong matches when two customers owe the same figure, so name, reference and date have to count too, and close calls should go to a person rather than auto-apply.
- Xero's API does not allow every reconciliation action programmatically, so the design should assume some steps end as a prepared list for the accountant rather than a silent change to the books.
- Suggested coding that learns from history will copy old mistakes, so the first month should run in suggestion-only mode while the accountant corrects the patterns.
- Foreign-currency payments and bank charges rarely match to the cent, so the matching needs a tolerance rule that someone has agreed to, not a hidden default.
Frequently asked questions
Does this replace Xero's bank rules?
No. Bank rules still handle the repeat payments you already set up. The automation takes the lines that rules don't catch, which is where the manual time goes.
Will it change my books without approval?
Not by default. Matches go to an approval queue first. You can allow automatic posting for high-confidence matches once you trust the results.
Can it handle one payment covering several invoices?
Yes. It looks for combinations of open invoices that add up to the payment, and flags the result for approval.
Does it work with more than one Xero organisation?
Yes. We connect each organisation separately and keep their rules and history apart.
Relevant industries
Go deeper
- Want this built around your own systems? See our AI document automation service.
- Read the guide: The Complete Guide to AI Automation for Malta Businesses in 2026
- Read the guide: Automating Xero, Sage and Shireburn workflows in Malta
- Built specifically for Xero: Malta VAT Return Preparation with AI
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Get this automation running
From €299. Tell us about your current process and tools, and we'll confirm the scope and a fixed price.
Get a quote →