How to deal with minor underpayments in Xero (2)

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Minor underpayments in Xero

A minor underpayment is not a partial payment. A minor underpayment is an amount typically not worth chasing, so maybe 1 or 2 cents or 1 or 2 pennies. So in this scenario $99.99 is deposited into the bank. However the actual invoice amount is $100. So the amount deposited is 1cent short. So how do we deal with this? We locate the payment received -> select Find and Match -> select the matching transaction -> select the Adjustments option -> select the reconcile button.

Processing a minor underpayments in Xero

Here we are in Xero, and we have located the payment received, this is the payment received here, and we are going to come over to the right side and click on Find and Match. And here I have Find and Match and I’m going to select the matching transaction, here is here on the left – so I knew that was the matching transaction. And I’m scrolling down the screen to find this option, here is the Adjustments options, so scroll down to find the Adjustments option, in red says the amount is out by -0.01. Click on the Adjustments option, select Minor adjustment. In the field that now appears I’m going to enter the amount that is highlighted in red – 0.01. And as soon as I do that you can see the green reconciliation shades up and I can select the Reconcile button here, and that amount is reconciled.

Let’s take a peek behind the scenes in Xero

For those who are interested this is how the account transactions looks; its split into two. On the first of June the reconciliation adjustment of 1 cent against the invoice amount $100 is fully receipt against the invoice amounts but invoice is now fully closed. This is the amount the minor adjustment is allocated to, it’s allocated to branding which is listed as a current liability, it is excluded from tax, and the year today just this adjustment just for this particular one is $0.1.

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