Using Xero's bank rules to speed up reconciliation
When and how to create a bank rule to make bank reconciliation easier
Bank rules in Xero automatically categorise recurring transactions, so you do not have to code them manually every time.
When to create a bank rule
Create a bank rule for any transaction that appears regularly with the same description: monthly software subscriptions, rent payments, payroll costs, and recurring supplier payments. The rule tells Xero what account code and VAT code apply every time it sees that transaction description.
How to create a rule
In the reconciliation screen, when you see a transaction you want to automate, click the transaction and then select ‘Create Rule’. Name the rule, confirm the matching criteria (the transaction description text), and set the account code, VAT code, and contact. Save the rule. Next time a matching transaction appears, Xero applies the rule automatically.
💡 Good to know: Review bank rules every few months to check if they are still applying correctly. If a supplier changes their payment description or you change the nature of a recurring cost, update the rule to reflect the change.
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