What is Xero Auto Reconcile and How Does It Work?

What is Xero auto reconcile?

Xero's auto reconcile feature uses an AI agent called JAX (Just Ask Xero) to automatically match and categorise bank statement lines — without you needing to review and confirm each one manually.

Before JAX, Xero would suggest a match for a bank transaction, but you always had to click OK to confirm it. JAX goes one step further: when it's confident enough, it reconciles the transaction for you and moves it straight to the Reconciled tab.

Currently in BETA: Auto reconcile is being rolled out gradually. You need to opt in per bank account — it doesn't activate automatically across your organisation.

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How JAX decides what to reconcile

JAX uses a four-tier matching hierarchy. It works through each tier in order, stopping as soon as it finds a high-confidence match.

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What's the difference between auto-suggest and auto-reconcile?

Xero has always had a suggestion engine — when you open the reconciliation screen, it highlights likely matches in green. That's auto-suggest, and it's always been there.

Auto-reconcile (JAX) is different: it skips the confirmation step entirely. Transactions JAX is confident about move straight to the Reconciled tab without you touching them.

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How to enable auto reconcile

1. Go to Accounting → Bank accounts
2. Click the settings icon (⚙) on the bank account you want to enable it for
3. Look for the Automatic bank reconciliation option
4. Toggle it on

You can enable it per account — useful if you want to test it on one account before rolling it out across your organisation.

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How to review auto-reconciled transactions

When JAX reconciles a transaction automatically, it appears in the Reconciled tab of the bank reconciliation screen (not the standard reconciliation queue). Here you can see:

• The bank statement line details
• The transaction JAX matched it to
• The account code applied

To undo an auto-reconciled transaction, click it in the Reconciled tab and select Unreconcile. JAX learns from the correction and is less likely to make the same mistake again.

Tip: Run your Profit & Loss and Balance Sheet reports weekly while getting started with auto reconcile. Coding errors show up quickly in these reports — it's faster than reviewing individual transactions.

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What can go wrong

JAX is accurate for high-volume, consistent transactions — regular supplier payments, subscriptions, payroll. It's less reliable for one-off or unusual transactions. The most common issues are:

Incorrect account code applied JAX may code a transaction to the wrong expense account, especially if your bank description is vague (e.g. "TFR" or "EFT PAYMENT"). Always check new payees before relying on auto-reconcile for them.

Wrong GST treatment If JAX applies a rule or pattern from a similar transaction with different GST, your BAS can be affected. Review GST-sensitive categories (e.g. entertainment, mixed-use) manually.

Invoice matched to the wrong transaction If two invoices have similar amounts, JAX may match the bank transaction to the wrong one. This is more common with round-dollar amounts.

Missed training opportunity If you don't correct a wrong reconciliation, JAX will repeat it. Actively correcting errors keeps the AI improving.

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What JAX does not do

JAX matches bank feed transactions to accounting entries. It does not:

• Read PDF remittance advice documents
• Identify which invoices a lump-sum payment covers
• Process batch payments with multiple invoice references
• Handle remittances from NDIS, insurance funds, or healthcare payers

For those scenarios — where a single bank deposit needs to be split across multiple invoices — you need remittance-specific automation. Remittance Go reads the PDF or email remittance, identifies which invoices are covered, and creates the batch payment in Xero before it even hits the bank feed. Learn how Remittance Go works with Xero →

For manual multi-invoice reconciliation without a PDF, see How to reconcile batch deposit payments in Xero.

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Frequently asked questions

Is Xero auto reconcile available to everyone?

It's currently rolling out in BETA. Availability varies by region. Check your bank account settings — if the option to enable automatic reconciliation appears, it's available for your organisation.

Can I trust JAX to reconcile everything?

For high-volume repetitive transactions (payroll, subscriptions, regular suppliers), JAX is highly reliable. For complex, unusual, or large-value transactions, review manually. A quick weekly check of the Reconciled tab is good practice regardless.

Does JAX learn from other users' data?

Yes — JAX uses anonymised patterns from across the Xero user base to improve predictions, in addition to learning from your own reconciliation history. Your transaction data is never shared in identifiable form.

Will auto reconcile mess up my bank rules?

No — JAX applies your existing bank rules as part of Tier 3. It won't override them. If you want JAX to take a different action than your rule specifies, update or delete the rule.

What's the difference between Xero auto reconcile and Remittance Go?

JAX handles the bank feed — it categorises and matches incoming/outgoing transactions to accounts or existing entries. Remittance Go handles the step before the bank feed — reading remittance advice PDFs, identifying which invoices are covered, and creating the batch payment in Xero so the bank feed reconciliation becomes a one-click match. They're complementary, not competing.

My auto-reconciled transaction used the wrong GST code — how do I fix it?

Click the transaction in the Reconciled tab, select Unreconcile, correct the account code and GST treatment, then reconcile manually. JAX will update its prediction for similar transactions going forward.