Xero how to
Reconcile a clinic bank account in Xero
In Xero you reconcile a clinic bank account one statement line at a time, and a funder deposit is one line covering many invoices. Post each practice system payment to a clearing account for the rail that pays it, then match the deposit out of that account. The balance left over is the work still to do.
Key facts
- Check before you match
- Confirm the deposit is the amount you were expecting by referring to the clearing account report, before the statement line is matched12
- The mismatch
- One payment covering two invoices arrives as a single bank transaction and two allocations in Xero, and Find and Match joins the one to the many12
- Where the payments land
- With a clearing account configured, the practice system posts invoice payments to that account rather than to the bank account13
- How the lump is matched
- A receive money transaction coded to the payments clearing account, matched against the statement line11
- One account per rail
- The canonical templates hold one clearing account per named settlement rail rather than one per funding source, because the rail is what produces the bank line15
- The clearing leg
- Every clearing leg in the canonical templates posts at BAS excluded, so the tax treatment stays on the revenue line where it was earned15
- Declined claims
- Where several service items are claimed together and one is rejected, the whole invoice is marked declined, so a payment run falls short by whole invoices6
- Reversals
- A rejected or adjusted NDIS claim comes back as a zero dollar or negative row inside the remittance, which is easy to overlook in a long file7
- Short payments
- The canonical templates carry a funder shortfalls and write-offs account, because an approved claim can be paid at the price limit or the gazetted rate rather than the invoiced amount15
- Netted fees
- An online card processor's payout reconciliation report carries the gross, the fee and the net for every transaction in the batch a payout settles9
What reconciling means in a clinic
Reconciling in Xero is a line by line job. The bank feed brings in a statement line, and you tell Xero which document in the ledger explains it. In most businesses that document is one invoice or one bill. In a clinic it rarely is, because the money has already been pooled by somebody else before it reaches the bank.
A practice raises an invoice per patient per appointment. A funder pays once per payment run, per batch or per settlement day. So the reconcile screen shows one line worth thousands and the ledger holds dozens of small payments that add up to it, or nearly do. Everything hard about reconciling a clinic bank account comes out of that gap.
One deposit, many payment records
Cliniko describes the shape in its own reconcile guidance, using the smallest case there is.
So, let's say that a patient gave you $100 to pay off two $50 invoices12
One deposit, two payment records. Scale that to a Medicare payment run or an NDIA batch and it is one line against dozens of records, some paid in full, some declined, some paid at less than the invoice. Xero's Find and Match holds many payments against one line and does the job while the two sides agree. The day they disagree is the day the pattern shows its limit, because the difference has nowhere to sit.
Three patterns, and where each one strains
A practice has three ways to get its payments into Xero before the deposit lands. They all reconcile on a good day. They differ in what happens on a bad one.
| Pattern | What it does | Where it strains |
|---|---|---|
| Payments into the bank account, matched later | Every practice system payment posts to the Xero bank account, and one statement line is matched to many of them | The bank account carries payments that are not on the statement, so unmatched items build up each time a deposit differs from the sum |
| One batch deposit per remittance | The invoices a remittance covers are grouped into one dated batch, and the statement line matches the batch | The batch has to equal the deposit, so fees, reversals and short payments need their own handling, and a long remittance may have to be split across batches |
| A clearing account per settlement rail | Each payment posts to the account for the rail that will pay it, and the statement line is matched out of that account | It asks the practice system, the funder report and Xero to agree, and a balance that will not clear is a real exception for someone to work |
The third pattern is what the canonical Ledger Map templates are built on, and it is what the rest of this page assumes. The templates hold one clearing account per settlement rail rather than one per funder, because the rail is what produces a bank line, and the funding source stays on the revenue row.
How a clinic deposit reaches the bank line
The step people do not expect is the second one. Once this pattern is in place the practice system stops posting payments to the bank account at all. A bookkeeper who works on these files describes the change from the other side of the desk.
When you have Clearing Accounts set up, Cliniko pushes the invoice payments through to a Clearing Account in Xero, instead of pushing it through as a payment to the bank account.13
Break one: the line is one and the invoices are many
This is the ordinary case, and it is the one the reconcile screen cannot hold on its own. The deposit is a Medicare payment run, an NDIA batch or a day of fund benefits, and the invoices behind it were raised days earlier by different practitioners for different patients.
The way through is to stop matching the line to invoices and match it to a balance instead. Zanda's own Xero guidance says the same thing for a card settlement: create a receive money transaction and code it to the payments clearing account. The invoices were closed when the funder paid them, so the statement line only has to agree with the account that holds them.
Break two: the fee comes out before the money lands
An online card processor pays out net of its own fee. A terminal facility usually settles the day gross and bills its merchant fee monthly to a nominated account. The first case makes the deposit smaller than the payments behind it, and a reconcile that ignores the fee leaves the difference stuck.
- Reconcile the line in two parts: the gross amount out of the rail's clearing account, and the fee to a merchant fees expense account.
- Keep the fee on the same statement line rather than as a separate journal, so the deposit and the fee stay attached to each other.
- Where the fee is billed monthly instead, expect a separate direct debit line and code it to the same expense account.
- Check the processor's payout reconciliation report for refunds and disputed charges, which sit in the payout as their own rows rather than as a short paid invoice.
Break three: a claim was declined after the invoice looked paid
A practice system can mark an invoice paid when the claim is lodged rather than when it is answered. If the claim is then declined, the ledger holds a payment the funder did not make, and the deposit comes up short by exactly that claim.
The two shapes need different moves in Xero. A Medicare claim with one rejected service item is marked declined whole, so the payment is removed and the invoice reopens for a corrected claim. An NDIS rejection or adjustment comes back as a zero dollar or negative row inside a remittance instead, so a credit note allocated against the invoice keeps that remittance total equal to its deposit.
Break four: the funder paid less than you billed
Short payments are ordinary business for some rails. An insurer pays its own allowance, an agency pays at the price limit, a plan manager pays what is left in the budget. The claim was approved, so this is not a rejection, and the invoice does not reopen.
Post the amount the funder paid, then decide what the balance is. The canonical templates keep a funder shortfalls and write-offs account for the difference, so a practice that will not pursue it has somewhere to credit note it to. A practice that will pursue it leaves the balance outstanding against the patient. Either way the decision belongs to the practice and its adviser, and the deposit reconciles once the paid amount is posted.
Which rail caused which difference
A difference is easier to work when you know which rail produced it. These rows come from the funder mechanics data the funder pages read, so the deposit shape here is the same one those pages state.
| Rail | What arrives | What it breaks |
|---|---|---|
| Medicare bulk bill | One electronic funds transfer from Services Australia per payment run, per payee provider number, to the bank account registered for that provider location | One rejected service item marks the whole invoice declined, so the run is short by whole invoices |
| NDIS agency managed | One agency payment per batch, covering many participants and many claim lines at once | A rejection or adjustment comes back as a zero dollar or negative row inside the remittance |
| Private health fund through HICAPS | The fund benefit arrives gross, because there is no fee to process a health fund or Medicare Easyclaim claim and card processing is charged monthly to a nominated account instead | The fee is charged monthly to a nominated account, so it lands on its own statement line well after the settlement it belongs to |
| Private patients paying by card | One deposit from the payment processor rather than from a funder: an online card processor pays out net of its own fee on whatever payout schedule the account is set to, while a standalone terminal facility settles the day gross and bills its merchant fee monthly | The payout settles a batch at its net, so a reconcile that ignores the fee leaves the gross stranded in the clearing account |
| WorkCover Queensland | Electronic funds transfer from the insurer, disbursed nightly once the claim owner has authorised the invoice | An approved claim can be paid at the funder's own rate, so an invoice closes short of what was billed |
The check that tells you the month closed
The month end question is not whether the bank reconciles. It is what is left sitting in each rail's clearing account once it does.
- A balance older than the rail's usual lag is a claim that was receipted and has not been paid.
- A balance that appeared on the deposit date is a run banked and not yet receipted, or a fee that was left off the reconciliation.
- A stubborn small balance is often a sync gap: an invoice archived in the practice system and not voided in Xero, a payment archived and not removed, or a credit allocated in one system and not the other.
- A balance that will not resolve at all is worth a note against the rail rather than a journal that hides it.
What Ledger Map does with it
Ledger Map holds one standing map for the practice, approved before anything syncs. Each payment resolves through that map to its account and its tax rate, a deposit is posted as one balanced document set against the rail's clearing account with the payments underneath it, and one exact match is left in the bank feed for a person to accept.
It does not accept the match for you, and it does not decide the treatment. Anything the map cannot resolve becomes a question with the options laid out, and the four breaks above become exceptions with the rail named rather than a difference on the reconcile screen. How it works shows the map and the approval step, and the Medicare bulk bill page walks one rail end to end.
Questions
How do I reconcile one bank deposit that covers many invoices in Xero?
Match the statement line to the account that holds the payments rather than to the invoices. With a clearing account per settlement rail, the payments were posted there when the funder paid them, so the deposit is reconciled out of that account as a transfer or a receive money coded to it. Find and Match against many payments is the other route, and it holds while the totals agree.
Why will my clearing account not clear?
Four causes cover most of it: a fee taken out of the deposit and left off the reconciliation, a claim declined after the practice system marked the invoice paid, a funder that paid at its own rate rather than the invoiced amount, and a sync gap where an invoice or payment was archived in the practice system and not changed in Xero.
Is a clearing account better than a batch deposit?
They answer different questions. A batch deposit groups the invoices one remittance covers and matches the batch to the line, which is tidy while the batch equals the deposit. A clearing account per rail keeps the bank account looking like the statement and gives every difference somewhere to sit. Practices with fees, reversals and short payments tend to end up with the second.
What do I do when the funder pays less than I invoiced?
Post the amount paid so the deposit reconciles, then treat the balance as its own decision. The canonical templates keep a funder shortfalls and write-offs account for the difference, so a practice that will not pursue it can credit note it there. A practice that will pursue it leaves the balance open against the patient. The choice belongs to the practice and its adviser.
Does Ledger Map reconcile the bank line for me?
It posts one balanced document set per deposit against the rail's clearing account and leaves one exact match in the bank feed, which a person accepts. Anything the standing map cannot resolve comes back as a question with the options laid out rather than as a silent posting.
Read next
- Xero how toHow to reconcile a clearing account in Xero
- Xero how toFind and match a funder deposit in Xero
- Xero how toRecord a batch deposit from a remittance
- FundersHow Medicare bulk bill payments land in Xero
- FundersHow NDIA agency-managed payments land in Xero
- Xero how toSplit a bank statement line in Xero
- HubXero how to
Sources
Open questions
- Xero's invoice limit on one batch payment could not be settled. Two numbers disagree in the sources read for this page: 50, which the canonical plan managed template states in its own note and which matches a Xero Central question title, and 200, which RemitClear's current page describes splitting a remittance against. Xero Central articles returned an empty document to the fetcher, so this page says a long remittance may have to be split and names no number.
- No Xero Central article is cited here. Three attempts on the reconcile and batch deposit help articles returned nothing readable, so the Xero side of this page rests on vendor documentation and on the canonical templates instead.
- Whether a health fund rail settles one deposit per fund or one per day is unconfirmed. The terminal provider's pricing page states the monthly card processing fee but says nothing about settlement timing, so the daily settlement in the fund row is the funder mechanics record's own statement and the break beside it stops at the fee.
- Whether an NDIS reversal lands in the same remittance as the claim or in a later one is unsettled. The guide read for this page shows the zero dollar and negative rows without saying which remittance carries them, so this page says a remittance rather than naming which.
- WorkCover Queensland's Provider Connect page, re-read 3 Sep 2026, does not itself state short payments. The short payment case here rests on the canonical templates, which keep a funder shortfalls and write-offs account for a claim paid at the price limit or the gazetted rate.
- No bank feed narration is stated anywhere on this page. Matching learns the practice's own feed rather than holding a descriptor string.
- The three sync gaps in the month end list come from a bookkeeper's account of one practice system rather than from vendor documentation, so treat the list as the shape to look for rather than as a complete set.
- Medicare digital claiming: payment and processing reports, MDCM07INFO2
Services Australia. Retrieved 29 Aug 2026. Source updated Jul 2024.
primary
- Reconcile in Xero when using the Cliniko integration
Cliniko. Retrieved 3 Sep 2026. Source updated 28 Jul 2026.
primary
Review
Last reviewed 3 Sep 2026 by Shane
General information for Australian allied health practices, not tax advice. Confirm a treatment with your BAS agent or accountant before you post it.
Guided onboarding
Run one real month before you go live.
Sign up, connect Zanda and Xero, and replay a month you already closed. The map is reviewed with whoever owns the books, and nothing posts until you approve it.
Every practice starts from a template. Nothing posts until the map is approved.