In this tutorial, we will edit a bank rule that already exists in Xero’s demo company. While there are a number of bank rule variables you can edit, for this exercise we will change the general ledger code that transactions are being allocated to.
Bank Accounts Section in Xero
To get to the right area of Xero, go to Accounting → Bank accounts from the main menu:
Next, click on the Reconcile 28 Items button for the main business bank account:
Scroll down the list of transactions until you see the $15.50 transaction from 7-Eleven. You should be able to see that Xero has automatically applied a bank rule called 7-Eleven to the transaction. If you click on View Details, a screen will open up showing you where and how the transaction is being allocated to by the bank rule:
Here you can see that the transaction is being allocated to the 453 – Office Expenses general ledger account. We are going to change this allocation by editing the bank rule:
How to Edit a Bank Rule in Xero
To edit the bank rule, scroll to the top of the screen and click on the Manage Account button on the right-hand side. Select Bank Rules from the drop-down box to see the bank rules that are already set up for this bank account:
There is only one spend money rule set up for this bank account and that is the rule we are going to change. Click on the 7-Eleven link to go to the next screen:
In this screen, you can change any parameters you like for this bank rule. As we are only going to change the general ledger code, go to the section called 4. With the remainder, allocate items in the following ratios… and change the Account to 420 – Entertainment:
Now go to the bottom of the screen and click on Save.
Once the rule has saved, go back into the reconciliation screen for the bank account and find the $15.50 transaction from 7-Eleven. As before, click on View Details to see the way the transaction is being allocated according to the bank rule. Here you should see that the general ledger account that the transaction is being allocated to is now 420 – Entertainment:
When you are happy with the result, you can save the transaction and reconcile it in your bank feed.