If you know anything about us here at PPF, you’ll know that we love our technology, apps and automations. (Well, I say ‘we’. Some of us are less technology-minded, but Cheryl leads the charge, and we’re happy to follow her lead in making all of our lives easier!) Of course, we are huge Xero ambassadors, and among Xero’s many little nifty tricks is what’s known as ‘bank rules’.
The obvious first question is – what’s that?
When we set up a ‘rule’ in Xero, it means that it will auto-fill any matching transactions, saving us having to fill in the boxes manually.
Here’s a little step-by-step guide on how to do it:
- Go into your ‘reconcile’ on your bank feed,
- On the selected transaction, click ‘Options’, and then ‘Create Bank Rule’,
- Choose the criteria for the rule – usually who the payee is,
- Select a name for that contact,
- Fill in the description, nominal code and tax rate,
- Press save and enjoy the magic!
WAIT!
Please, before you quit reading here and go merrily ahead and create bank rules for anything that everything that might ever come through your bank, there are some things to bear in mind!
- If you are VAT registered, and this is a transaction that you will be claiming the VAT back on, you will need the receipt or invoice attached to the transaction to prove the VAT to HMRC.
- This is not ideal for your incomings. Each time a client pays you, there should be a corresponding invoice already set up in Xero.
- There are some places where you’ll likely be purchasing more than one type of item. For example, a supermarket could be providing you a lovely £3 meal deal for your drive to a client meeting, but you may also be getting fuel, or cleaning supplies for the office. These need to be coded differently, and so setting up a blanket rule is not a good idea here.
So, what IS it a good idea for?
- If you’re not VAT registered, then this is going to apply to more things for you. Creating bank rules may be a quicker way for you to tidy up your bank feed.
- If you are VAT registered, but there are some expenses that you know will never have VAT applied, for example the Dart Charge, or some car parks, then you may wish to set up a rule.
If you’re interested in finding out what other helpful little tricks Xero has up its sleeve, contact us for a chat, and we’ll be happy to show you!
