Creating bank rules in Xero is all about saving time and ensuring you get maximum benefit from having bank feeds in place. Where rules are implemented, transactions are treated the same each month, which improves consistency when reconciling the account.
In addition, you can also group similar transactions which can help to keep things neat and tidy in your Xero – something your accountant will definitely thank you for!
Whilst requiring a little manual effort to set up initially, once established these rules should operate seamlessly in the background to make your reconciliations quicker and easier than ever before.
How do I create a bank rule in Xero?
Step 1: From the Xero dashboard, select your bank account. Click on reconcile account, and choose a payment waiting to be reconciled that you would like to create a bank rule for. Click on the options drop down and select ‘create bank rule’.
Step 2: Change the drop down to ‘ANY’, not ‘ALL’, to complete the sentence – ‘When money spent on the bank statement matches ANY of the following conditions. Then, fill in the drop downs for Payee, Reference and Description. Ensure these all state ‘CONTAIN’. The detail input should match the detail used in the bank. Ensure the description/reference used is specific to that group of transactions.
Step 3: The contact will be an ‘existing or new contact’. When typing the name in, you should ensure this matches the name that was used when it was initially set up in Xero.
Step 5: Include a description of the transaction – i.e. ‘Bank Charges’. For ‘Account’, select a nominal code that best matches the description associated with the transaction – i.e. ‘Bank Charges’. For ‘Tax Rate’, you will need to confirm whether the transaction was inclusive or exclusive of VAT.
Step 6: The reference will be set automatically.
Step 7: Target a bank account. Ensure you select the account you wish to use.
Step 8: Give the rule a title, for example – ‘Bank Charges’. Click ‘create’.
Our cloud accounting experts in Cambridgeshire, Bedfordshire and Hertfordshire are here to help you explore what works for your business, and to ensure you’re getting the most out of your chosen software. If you’d like to find out more about the efficiencies Xero could bring to your business please contact us.
