You’re busy, your time is important and the last thing you probably want to do is spend it updating your bookkeeping. However, spending a little bit of time setting up some bank rules in Xero will save you so much time in the long run.
What are bank rules?
As the name suggests, rules can be set up in Xero that check the details of the transaction to see if it meets the condition or conditions tied to the rule. If the conditions have been met, Xero suggests the rule on the reconciliation screen. In a dental setting, an example of a bank rule could be that when the payee is a suppliers name, the transaction will always be allocated to dental materials.
When should bank rules be used?
Bank rules can be used to save time for transactions that occur regularly. If your business has many regular payments, your time spent bookkeeping could be reduced dramatically just by setting up some rules. Instead of having to reconcile each item separately, reconciliation can be done just by clicking ‘OK’.
Types of bank rules
There are 3 types on bank rules that can be used:
- Spend money rules – applies to transactions where money is going out of your account
- Receive money rules – applies to transactions where money is coming into your account
- Transfer money rules – applies to money that is being transferred between bank accounts on Xero, for example, paying off a credit card from a current account
How to set up bank rules
Xero makes setting up bank rules very quick and easy. To access this part of Xero:
- ‘Accounting’ on the blue bar at the top
- ‘Bank accounts’
- Click the ‘bank rules’ icon
From there you have the choice of which type of rule you would like to set up. Once this has been chosen, there is additional information that will be needed:
- The conditions for the rule
- The contact – this can either be a new or existing one
- Optionally, a description of what you would like to show up in your accounts
- Where you want the transaction to be allocated
- A name for the rule
When setting up bank rules, you also have the choice of running it on all your bank accounts in Xero, or just specific ones.
If you or your business would like more help on setting up bank rules, Hive would be more than happy to help.
