By Angela Backhouse, Accountant at Hive Business
Processing your account’s transactions can be a tedious task, even if you’re using the most sophisticated software. It can seem repetitive when a high proportion of your payments and receipts are the same or similar each month.
Within Xero, there is an option to set up bank rules – a quick and simple way to streamline your bookkeeping. Bank rules can be an efficient process to reconciling most of your bank statements in Xero.
Once you have imported your bank statements into Xero, or even better set up a bank feed for your bank account(s), the next step is to reconcile your bank. You’ll need to have set up at least one bank account to use the bank rules function.
To access the bank rules function in Xero go to:
– Accounts
– Bank Accounts
– Select the Bank Rules icon
Using the Xero bank rules function, you can choose to set up a rule so that every same/similar transaction automatically suggests the treatment you have specified in your bank rule. Each rule can be specifically set up for your business’ common payments and receipts, for example, ‘bank charges’ would be posted straight to ‘bank fees’, ‘insurance’ would be posted directly to the ‘insurance’ code, ‘British Gas’ can be posted directly to the ‘light and heat’ code, all at the click of a button.
To set this up you will need to input the following information:
– the conditions you would like the rule to pick up when scanning transactions in the bank account
– the contact
– the description you want to show up in your accounts
– which code it should be posted to
When going through reconciling your bank, the rule will be applied on screen. If you agree this rule is correct for the transaction presented, click OK. If you do not agree, you can dismiss the choice of applying the rule or edit the bank rule.
Bank rules are one of the many functions Xero has that will streamline your bookkeeping process. It is an efficient and effective way of saving you time on the more regular payments and receipt transactions going through your bank. Using the bank rules function can free up more time for you to concentrate on other important tasks within your practice.
If you have any questions, we have a selection of articles on how to use Xero more efficiently. If you would like to talk to us about our dental accountancy services, call 01872 300232 or email us at hello@hivebusiness.co.uk.
