Gotchas

Common mistakes and edge cases in month-end close. Each entry has the pattern, the reason it matters, and a Bad / Good example.

Gotcha: Flagging split transactions as duplicates

Why it matters: A single purchase split across multiple GL categories appears as multiple rows in a QuickBooks export — same vendor, same date, different amounts. Flagging these as duplicates sends the owner on a wild goose chase.

✗ Bad

Flagged as duplicate: Office Depot USD 47.50 on March 12 and Office Depot USD 62.50 on March 12 — same vendor, same date.

Both rows share the same TxnID — they're splits of a USD 110 purchase across "Office Supplies" and "Equipment."

✓ Good

Before flagging duplicates, group rows by the ledger's transaction id (TxnID in QuickBooks). Only compare transactions with distinct IDs. Splits of the same transaction are never duplicates. In Xero a split is one document whose line_item_cardinality is above 1: compare documents, never lines.

Gotcha: Scanning bank lines for duplicates in a Xero ledger

Why it matters: A bill entered twice in Xero sits as two unpaid documents and produces no bank line until one is paid. A bank-side scan reports the ledger clean while the duplicate waits to be paid twice.

✗ Bad

Scanned 212 bank transactions for the month. No duplicate pairs found.

The duplicate is in the bills list, not the bank feed.

✓ Good

For a Xero ledger, scan bills and invoices: same contact, same total, within 5 days, both unpaid or one already paid inside the window (the paid-once-about-to-be- paid-twice case is the costly one). Say what was scanned ("bills and invoices, not bank lines") so the owner knows what the clean result covers. Mapping in xero-reconcile.md.

Gotcha: Treating a refund as a missing settlement

Why it matters: A PayPal refund appears as a negative transaction in the settlement report. If you treat it as an unmatched outflow, you'll flag a legitimate refund as a problem.

✗ Bad

Flagged: PayPal outflow of –USD 89.00 on March 18 has no matching QB deposit. Possible missing transaction.

The –USD 89.00 is a refund to a customer. It should match a QB credit memo, not a deposit.

✓ Good

Separate inflows (positive) from outflows (negative) before reconciling. Match negative processor amounts against QB credit memos or refund transactions, not deposits. Only flag an unmatched negative if no credit memo exists in QB.

Gotcha: Comparing gross PayPal amount to net QB deposit

Why it matters: QuickBooks often records the net bank deposit (after PayPal fees), but PayPal's transaction report shows the gross sale amount. Comparing gross to net will always show a discrepancy equal to the fee.

✗ Bad

Discrepancy: PayPal settlement USD 500.00, QB deposit USD 484.80 — delta USD 15.20. Flagged as reconciliation error.

The USD 15.20 is PayPal's 3.04% processing fee. This is expected and correct.

✓ Good

Use the net payout field from the PayPal settlement report (transaction_info.transaction_amount.value minus transaction_info.fee_amount.value) when comparing to the QB bank deposit. If the delta is < USD 0.50 after fee adjustment, mark as RECONCILED.

Gotcha: Advancing past Step 6 when there are unresolved flags

Why it matters: The close packet is the final artifact the owner files or shares with their accountant. Exporting it with open flags bakes errors into the record.

✗ Bad

Owner hasn't responded about the 3 uncategorized transactions. Generating the close packet now so they have something to look at.

✓ Good

Hold at the Step 6 gate until the owner acknowledges every flag — either resolving it ("categorize this as office supplies") or explicitly deferring it ("mark that as 'to review later'"). Only then export. Open items that the owner deferred should appear in the Action Items sheet, not be silently dropped.