Step 1: Log into Xero and Access Bank Accounts 

  • Go to Accounting in the main menu, then select Bank Accounts. 

Step 2: Create a New Bank Rule 

  • Choose the bank account you want to set rules for. 
  • Click Bank Rules and select Create Rule for Spend or Receive Money. 

Step 3: Set Conditions for the Bank Rule 

  • Define rule criteria, such as contains or equals, and enter keywords (e.g., vendor names). 
  • Add multiple conditions to refine the rule if needed. 

Step 4: Define the Transaction Details 

  • Set the payee or contact associated with the rule. 
  • Choose an account (expense or income category) for coding transactions automatically. 

Step 5: Specify Tax Rate and Tracking 

  • Select the applicable tax rate. 
  • Add any tracking categories if you’re using them in Xero. 

Step 6: Save and Apply the Rule 

  • Click Save to activate the rule. It will now automatically match future transactions meeting the criteria. 

Step 7: Test and Adjust the Rule 

  • Go to Reconcile to see the rule in action. 
  • If the rule isn’t working as expected, revisit Bank Rules to refine the conditions. 

Using bank rules in Xero saves time and simplifies transaction reconciliation by automating repetitive categorization.