AI bank reconciliation is a brand-new automatic bank reconciliation feature recently launched (in beta) by Xero. It is powered by JAX and looks set to be a major upgrade in terms of day-to-day experience of Xero users.

As a Xero Platinum Partner, we’re always on the lookout for changes that genuinely improve how businesses and advisors work together, so naturally we have been paying special attention to AI bank reconciliation as it develops.

What does AI Bank Reconciliation mean?

In simple terms, AI bank reconciliation means the continuous processing of transactions in the background as they arrive in your bank feed (powered by Xero’s JAX “financial agent”). It could be a major asset in terms of digital bookkeeping.

In other words, it means:

• Accounts kept up to date in real time
• Transactions are reconciled even before you log in
• A review-focused reconciliation process, not data-entry heavy

This is quite a big deal for business owners dealing with high transaction volumes.

• Read more: What Is Bank Reconciliation Software - Does Your Business Need It?

How AI Bank Reconciliation might change your approach

One of the biggest potential benefits of this technology is the shift in mindset it could introduce.

• Instead of clicking through every transaction or repeating matching decisions month after month, you may be reviewing a short, prioritised list of transactions flagged by JAX, spending time where professional judgement is actually needed.
• Crucially, Xero says JAX only reconciles transactions when it’s very confident. It also learns from your behaviour over time, improving accuracy the more you use it.
• Automation will be off by default, and you can step in, override, or switch it off at any time.

Will you still have visibility and transparency?

This is one of the biggest concerns we hear about when it comes to AI in accounting. Can you still see what’s going on?

The good news is that it looks like the answer here is yes.

• Auto-reconciled transactions are easy to identify
• The new Reconciled Page makes review fast and intuitive
• Nothing is hidden, locked, or forced

Ultimately, it points promisingly towards less time reconciling and more time making decisions.

Who can access AI Bank Reconciliation through Xero?

For the current BETA rollout, AI Bank Reconciliation is available on Xero Grow plans (or above) and will be rolling out gradually.  

Xero users can expect to see an in-app notification when its available to their organisation.

Our thoughts (as a Xero Platinum Partner)

Full disclosure: We’re Xero Platinum Partners and therefore advocates for Xero as a platform as it develops new features and technologies that benefit our clients.

Xero’s new AI-driven reconciliation looks thoughtful and carefully implemented. In other words, it’s automation with safeguards, not automation for its own sake. This is good, because financial decisions are still best when powered by people.

If you’re already using Xero and want to understand how AI Reconciliation could fit into your plans (or what it could means for your reporting and advisory support), we’re happy to talk it through!