665 Bank Rules Same Vendor, Two Accounts, Filtered by Amount

In the fast-paced world of finance, having efficient accounting software is crucial for businesses of all sizes. Xero, a popular cloud-based accounting platform, offers a wide range of features that help streamline financial processes. In this blog, we’ll explore the power of Xero’s bank rules and how to track assets accurately, ensuring you’re ready to take charge of your accounting journey in 2023.

Bank Rules: Streamlining Data Entry

Managing bank transactions can be time-consuming and error-prone. Xero’s bank rules simplify this process by automating the categorization of transactions based on predefined criteria. Let’s dive into how to set up bank rules for a specific vendor with two different account categories, filtered by transaction amount.

Step 1: Accessing Your Company File

Log in to Xero and navigate to your company file to access the bank feed.

Step 2: Duplicating Tabs for Easy Reporting

To organize your reports effectively, duplicate the necessary tabs by right-clicking on the tab and selecting “Duplicate.”

Step 3: Exploring Income Statement and Balance Sheet Reports

Access the income statement (profit and loss) and balance sheet reports to review your financial data.

Step 4: Creating Bank Rules

Go to the bank accounts section, select the checking account with the bank feeds, and access the “Reconcile” tab.

Step 5: Setting Up Nuanced Rules

For certain vendors like Office Depot, you may need to categorize transactions differently based on the expense amount. Create a rule that identifies transactions containing “Office Depot” and has an amount below $1,000. These transactions will be categorized as supplies expenses.

Step 6: Creating Another Rule for Higher Amounts

Create a separate rule for transactions above $1,000 from Office Depot. These transactions should be recorded as assets, not expenses.

Tracking Assets and Depreciation:

Tracking assets is essential for maintaining accurate financial records. Xero allows you to set up separate accounts for equipment, automobiles, and other fixed assets.

Step 1: Aligning with Tax Software

Consult with your accountant or tax professional to ensure your asset categories align with the depreciation sub-ledger used in tax software. This will help you manage your tax obligations effectively.

Step 2: Handling Equipment Purchases with Loans

If you purchase equipment with a loan, you have several options for bookkeeping. You can either track the loan and equipment separately and provide documentation to your accountant for adjusting entries, or you can record the equipment purchase in a single transaction and share the documentation with your accountant for proper classification.


With Xero accounting software’s powerful features, managing your financial data becomes a breeze. Utilize bank rules to automate transaction categorization and save time on data entry. Moreover, accurately tracking assets and depreciation ensures compliance with tax regulations and provides a clearer picture of your business’s financial health. Stay ahead in the accounting world in 2023 by harnessing the full potential of Xero and mastering the art of financial management.

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