Bank Rules in Xero can streamline transaction categorization and reconciliation to save time and reduce manual errors. In this blog, we will guide you through creating and managing bank rules in Xero in an efficient way.
Content Outline
Key Summary
What Are Xero Bank Rules?
Xero Bank Rules automate transaction categorization during bank reconciliation, saving time and reducing errors by applying predefined rules to matching transactions.
Creating Spend Money Rules
Set up rules for categorizing expenses like “Parking Expenses” by defining conditions, assigning categories, and finalizing the rule for automatic application during reconciliation.
Creating Receive Money Rules
Automate income categorization, such as customer payments, by setting matching conditions and linking transactions to revenue accounts like “Sales” or “Services.”
Creating Transfer Rules
Streamline internal transfers between bank accounts by creating rules to detect and assign transactions to the appropriate destination account.
FastLane Xero Support
FastLane assists businesses in setting up, optimizing, and maintaining Xero Bank Rules through consultation, implementation, training, and ongoing support.
What Are Xero Bank Rules?
Bank Rules In Xero allow you to automate how transactions are categorized during bank reconciliation. By setting rules for specific payees or amounts, Xero applies these rules automatically when transactions match.
Navigating to Bank Rules
- Go to the “Accounting” menu
Select “Bank Accounts”
The purpose of the bank rules is to automate repetitive transaction categorization.
Bank Accounts
- Select a bank account: choose the specific bank account you want to manage rules for.
- Understand Matching: Bank rules are specific to individual accounts and work only when transactions align with the rule’s criteria.
Spend Money Rules
Spend money rules are used to automate categorization for expenses by saving time during the reconciliation process. Here is an example:
Step-by-Step setup for creating a rule for parking expenses
1. Navigate to Bank Rules
Go to the Bank Rules section under Accounting> Bank Accounts
And click create rule
2. Set Rule Conditions
- Select “Spend Money Rule” since this is for expense.
- In the conditions section:
- Use “Any text field” condition and choose “contains”
- Enter keyword “parking”. This ensures that any transaction with “parking” in its description, payee or reference will be matched.
- If the word “parking” appears alone, you can use the “equals” condition for stricter matching.
3. Assign the Category
- Select a contact for the parking expenses or let Xero use the payee information from the bank transaction.
- Allocate the expenses to a specific account like “Parking Expenses” or “Travel Costs”
- Alternatively, split the amount into fixed percentage or distribute 100% to one account.
4. Finalize the Rule
- Name the rule (eg. “Parking Expenses Rule”) and click save.
5. Reconciliation
- When a matching transaction appears in your bank feed, Xero will apply the rule automatically. Simply click Ok to reconcile the transaction with one click.
Receive Money Rules
Receive Money Rules categorize incoming transactions like customer payments.
Steps
- Create a Receive Money Rule by clicking “Create Rule” and select “Receive Money” which is similar to Spend Money Rule.
- Set conditions for matching such as customer name or amount.
- Assign categories to link transactions to revenue accounts like “Sales” or “Services”
- Save the rule and it will categorize matching transactions during bank reconciliation.
Transfer Rules
Transfer Rules handle transactions moving between bank accounts such as internal transfers or payments.
Steps
- Create a Transfer Rule by clicking “Create Rule” and choose “Transfer”.
- Set Matching Criteria for transfer detection.
- Assign Destination Account the money is transferring to.
- Save the rule to automate internal transfers.
How Can FastLane Help?
FastLane provides expert support for setting up and optimizing Xero Bank Rules. Call us now!
Consultation: FastLane helps assess your business needs and design tailored bank rules.
Implementation: FastLane sets up rules to ensure accurate and efficient reconciliation.
Training: They provide training to help your team maximize the benefits of Xero Bank Rules.
Ongoing Support: FastLane offers continuous support to refine rules as your business grows.
