Xero has announced one of its biggest updates in recent years. Automatic bank reconciliation, powered by its new AI engine, JAX, is now rolling out in beta across the UK.
For many small businesses and finance teams, this could remove hours of repetitive work each week and reduce the errors that often creep in through manual bookkeeping.
At SeavorChartered, we’re advocates of using the right tech in the right places. Good software gives you better information, faster. Better information leads to better decisions. This update from Xero is another step in that direction.
Here is what you need to know.
What is automatic bank reconciliation?
Bank reconciliation sits at the heart of bookkeeping. It is the process of matching your bank transactions to invoices, bills or nominal codes. For some businesses it is a daily job. For others it can be a time consuming catch up task that eats into evenings or weekends.
Xero’s new feature allows JAX to automatically reconcile transactions when it has a high level of confidence in the match. This includes learning from:
- your previous reconciliation history
- patterns across similar anonymised transactions
- the wider behaviour of Xero users
The idea is simple. If it is an obvious match, Xero does it for you. You stay in control, and you can review every automated reconciliation from a new Reconciled page inside Xero.
Xero’s ambition is for JAX to automatically reconcile more than 80 percent of your bank statement lines in real time.
Why it matters
1. It saves time
Several early users quoted by Xero estimate they are saving between four and seven hours a week. For business owners and bookkeepers, that is time you can put towards cash flow planning, invoicing, reviewing margins or simply freeing up room in your diary.
2. It reduces errors
Manual entry creates opportunities for mistakes that can affect reporting, compliance and tax returns. Automated matching lowers the risk of miscoding, missed transactions or duplicated entries.
3. Your cash flow picture gets clearer, faster
With transactions being categorised immediately, you get an accurate, up to date view of your income and outgoings. That makes it easier to spot issues early, plan ahead and make informed decisions.
4. You stay fully in control
JAX only reconciles where confidence is high, and you can switch automation on or off for every bank account individually. Nothing changes without you being able to see it and adjust it.
5. It supports the move toward digital records and MTD
With Making Tax Digital for Income Tax arriving in April 2026 for many sole traders and landlords, this type of automation will make compliance more manageable. It is part of a wider shift toward real time data, accurate records and proactive planning.
How to get started
Automatic bank reconciliation is available on Xero Grow (UK), Standard plans globally and above. Xero is rolling it out gradually, so you will see a message inside the software when it becomes available for your organisation.
You will need to turn on automation for each bank account you want JAX to help reconcile. Xero includes a short tour that walks you through the process.
If you want a direct guide, Xero’s Central Help article explains the full steps.
Our take at SeavorChartered
We work with a wide range of clients across Carlisle, Cumbria and the surrounding areas who already use Xero. For those businesses, this update should improve efficiency straight away. For anyone not yet using digital accounting software, this is another reminder of why the move is worth it.
Xero continues to build features that reduce admin, increase accuracy and create better visibility. That aligns with our view that digital records should not just be a compliance task. They should be a planning tool that helps you run your business more confidently.
If you want to understand whether Xero is right for your business, or need help setting up automation such as bank rules, reconciliations or forecasting, our team is always happy to help.
Need support with Xero or digital accounting?
SeavorChartered advises businesses across Cumbria that want better financial systems, clearer numbers and a more proactive approach to planning.
If you would like help getting started with Xero or want to understand how automation can work in your business, get in touch.
