Cash coding
A bulk-entry method in Xero that lets you create and reconcile multiple bank statement lines in a single grid, posting each directly to an account code without first raising a separate invoice or bill.
Cash coding is Xero’s batch reconciliation tool, accessed via Accounting → Bank accounts → Cash coding. Rather than matching each bank line to a pre-existing invoice or bill, you work through a spreadsheet-style grid and assign an account code, tax rate, and description to many lines at once. When you save, Xero creates the underlying transactions and marks them reconciled in a single step.
When to use it — and when not to
Cash coding suits high-volume, low-complexity payments where no source document exists to match against: subscription renewals, petty cash top-ups, bank charges, or regular direct debits to known payees. It processes quickly and keeps your reconciled balance tidy.
It is the wrong tool when an invoice or bill already exists in Xero. If a customer has paid a £1,200 invoice and you use cash coding to record the receipt, Xero will post a second, separate transaction — the original invoice remains outstanding, and your debtors ledger overstates what you are owed. In that case, use Find & Match in the standard reconciliation screen to settle the existing document.
A practical rule: if the line has a corresponding document in Xero, match it. If it does not, and you are satisfied it needs no document, cash coding is the efficient path.