Using bank rules in Xero is a great way to maximize your efficiency. When you have bank rules set up, Xero uses those rules and applies them to the transactions in your bank feed so that all you need to do to reconcile is click “OK”. It can be that quick and simple!
To begin, click on Create rule in the top right of the bank statement line as shown below.
In Section 1, Xero will pre-fill conditions derived from the bank statement line, however you can edit or add conditions. Often times we use the condition contains, and modify the pre-filled information.
For Section 2, there are three options for what Xero will do with the contact. Xero can use an existing or new contact that you enter on the rule, derive the contact from the payee on the bank statement line, or you can leave the contact field to be entered during reconciliation. We recommend that you choose use an existing or new contact and also enter the contact name.
For Section 4, you can allocate by ratio. If you would like the total amount to go to one account simply choose that account and enter the description. Note that in the image above, the percentage column to the right says 100.00%. If you would like for the amount to be allocated to more than one account, simply add lines and edit the percentages. Just make sure that the total percentage at the bottom is 100.00%.
Now that you have set up the bank rule, you can easily reconcile those transactions that fit the conditions by clicking “OK”. However, Xero also makes sure that you always have the option when reconciling to not apply the rule. Just click Don’t apply rule if you do not want to use the bank rule on a specific transaction.