What are Bank Rules?

Bank Rules are magical things in Xero that help you reconcile your transactions (by only having to click the OK button). Your rule is based on, if this happens then code this transaction to that account. ie you might have a rule that anytime you are charged interest on your overdraft Xero should code that transaction to Interest Charges. 

This means when reconciling, you don't have to type in the bank name as the Who, Interest Charges as the What, enter a description in the Why or put the tax code in. That's a nice time saver. 

It also means you don't have to remember where to code things! This is great when you want to compare how much you have spent on Merchant Fees as an example for the last 3 months or even compare what you spent this year vs last year. 

Don't stress, you can always edit the transaction if you want to change something before clicking the OK button. 

What transactions do i use bank rules for?

Bank Rule transactions are best used for transactions that automatically come out of your bank account (ie that you don't need to physically pay) or the really small things like parking etc. Here are some popular ones we have setup for clients (and ourselves!)

• Wages - when paid out of the bank account are coded to wages payables
• Super - when paid out of the bank account is coded to super payable
• Computer Lease - would always be coded to the same account - ie lease expense
• Bank Fees - you would set to code to the Bank Fees acccount
• Merchant Fees - you would set to code to the Merchant Fees account
• Interest - you would set to code to Interest Expense
• Monthly Car Insurance - you would set to code to Motor Vehicle Expenses account

There are literally hundreds of rules you can setup to help speed up your processing time. 

What do you mean by fine tune?

If you don't already know how to setup Bank Rules, Xero has a handy video (below) and some great help articles. As always just get in touch with the resident Xero experts in our office and they can help you setup rules as well. There are certainly some tricks to getting these rules setup and working perfectly 100% of the time. 

You can also use Bank Rules for sophisticated things like splitting transactions between private use and tax deductible. Or for reconciling your amex/pos income transactions (where the money you get is less the amex fee). 

Let's take a look at a few examples. 

You have a log book for your vehicle. It's 86% business use (14% private use). That means you should only be claiming 86% of all Fuel, Rego, Green Slip, Insurance etc (and the associated GST). Now you can leave this till Fringe Benefits time and we can process the private use then or you can calculate this on every transaction as you go during the year using a bank rule. All you need to do in this example is split the transaction rule into 2 lines. The exciting thing is you only need 1 rule to cover off on something like Fuel. See the example below where we have this rule applying to any transaction at Caltex, 7-Eleven or United. 

The other example is POS income. You can split receive money transactions so that the AMEX fee is calculated correctly and your Income is then also correct. 

As you can see there are a LOT of rules you can setup in Xero, some easily and quick and other sophisticated to really help you cut down your processing time. 

Can't wait to see what rules you setup to help #banadmin. As always if you get stuck let one of the Growthwise team know.