If you have spent some money that does not relate to a bill, refund or expense claim in Xero, you can create a spend money transaction for the item after it appears in your bank feed. Once you have created the spend money transaction, you will be able to reconcile the item in your accounts. In this tutorial, we will create a spend money transaction from an item in the bank account feed of Xero’s demo company.
Bank Accounts Section in Xero
To get to the right area of Xero, go to Accounting → Bank accounts from the main menu:
Next, click on the Reconcile 28 Items button for the main business bank account:
Create a Spend Money Transaction
For this exercise, we need to find a bank transaction in the Spent column of the Review your bank statement lines… section that is not matched with a bill or any other transaction already set up in Xero’s demo company. Let’s go with the $15.75 transaction for the Cooper St Bakery:
To create a spend money transaction for this item, we need to add some details to the text box in the Spent column of the …then match with your transactions in Xero section. In the Create tab, enter the following information:
- Who: type in Cooper St Bakery.
- What: choose the account 420 – Entertainment.
- Why: add a description such as Lunch on Friday.
Once this is done, an OK button will appear in between the two columns. By pressing the button, you will create the spend money transaction and reconcile the item in your bank account. When you are ready, go ahead and press OK:
Check the Spend Money Transaction
To check that the spend money transaction has been successfully created and assigned to the right contact, go to Contacts → All Contacts from the main menu:
Search for the Cooper St Bakery by typing Cooper into the search box. When the contact appears, click on the Cooper St Bakery link:
Because this is a new contact that we only just created, only a small amount of information will appear on the next screen. One of the few bits of information that should appear is the spend money transaction we just created in our bank account feed. If everything has worked perfectly, you should see a Spent Money transaction in the Activity section that matches the amount we reconciled in our bank feed:
Congratulations! You have successfully created a spend money transaction from an item in a bank account feed.