One of the differences between cloud accounting and regular desktop accounting software is that you can:
a) create bank feeds so that your transactions appear automatically in your accounts, without you or your bookkeeper having to enter anything, AND
b) create ‘rules’ so that these transactions are also coded automatically to the correct accounts
Now that I think about it, creating rules so transactions can be coded automatically is so blindingly obvious, why hasn’t it happened before in the mainstream accounting products? The main reason is probably historical: Before we all shifted to paying most things electronically, a cheque number was the only reference on individual transactions, and something as nondescript as a cheque number can’t be coded automatically.
So my interest is really tweaked: How can I create ‘rules’ so that my transactions are not only imported automatically into Xero, but coded to the correct accounts also? (I’ll also be trying this process in MYOB LiveAccounts, but right now I’m still waiting for my MYOB bank feeds to be activated.)
I go to the Manage Account menu and select the Bank Rules option. I click Receive Money and I get to a window that looks like this:
Now I have a really simple setup with my holiday house business in that every deposit that comes into my bank account is for rental accommodation. The only exception is the $500 contribution I make from personal funds on the first day of every month. So I’m going to set up a rule (hope it works!) that every deposit that’s $499.99 or less, or $500.01 or more, gets coded automatically to Income – Accommodation.
Here’s what my rules window looks like now:
Now the proof of the pudding is going to be whether this rule works, or not. I’m new to this game, so maybe I’ve made a mistake somewhere along the line. However, if my rule does work, the next time someone makes a deposit to my bank account, it’s going to appear in Xero automatically via a bank feed, and get coded automatically to income. Sounds almost too good to be true.
That’s less time doing books, and more time to spend on my business.