ERR_RECONCILIATION on Xero: Reconciliation failed. Root cause: The automated reconciliation process found discrepancies between two sets of financial records that cannot be automatically resolved. This typically occurs when transactions appear in one system but not the other, when amounts differ due to rounding or currency conversion, or when transaction dates span different accounting periods. Step 1: Identify whether the discrepancy is a missing transaction or an amount difference. In Xero, go to Accounting → Bank Accounts → click Reconcile on the affected account. The reconciliation screen shows unmatched bank statement lines on the left and unmatched Xero transactions on the right. A missing transaction means a bank line has no matching Xero entry. An amount difference means there is a match candidate but the amounts differ. These require different fixes. Step 2: For missing transactions: check whether the bank feed imported correctly. Go to Accounting → Bank Accounts → click the account name → Bank Statements tab. Check whether the statement line is present in Xero. If it is missing, your bank feed may have a gap. Click Import a Statement and upload the bank's CSV or OFX file for the missing date range. Xero will import the missing lines without creating duplicates for lines already present. Step 3: For amount differences: check for bank fees, foreign exchange, or partial payments. Amount mismatches are most commonly caused by: (1) a bank fee deducted from a payment that was entered in Xero at the gross amount, (2) a foreign currency transaction where the exchange rate in Xero differs from the bank's rate, or (3) a partial payment where the customer paid less than the invoice total. For each case: click the bank statement line → Find & Match → select the closest Xero transaction → click the pencil icon to adjust the amount and add a bank fee or write-off line. Step 4: Reconcile using a "Find & Match" or create a new transaction. For each unmatched bank line: click the line → Find & Match to search for an existing Xero transaction (invoice, bill, or spend/receive money). If no match exists, click Create to create a new transaction directly from the bank line. Assign it to the correct account code. Do not leave lines unreconciled — unreconciled items accumulate and make future reconciliations harder. Step 5: Check for duplicate bank feed imports. If your reconciliation shows more bank lines than expected, you may have duplicate imports. Go to the Bank Statements tab and look for duplicate dates and amounts. To remove a duplicate: click the statement line → Delete. Xero will not delete a line that has already been reconciled — you must unreconcile it first (click the reconciled transaction → Remove & Redo). Step 6: Reconcile to a zero difference and lock the period. The reconciliation is complete when the Xero balance matches the bank statement closing balance and the difference shows $0.00. Once reconciled, go to Accounting → Lock Dates and lock the period to prevent retroactive changes. Locked periods cannot be edited without unlocking, which creates an audit trail of any post-reconciliation adjustments.