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Set up bank rules to categorize online banking transactions in QuickBooks Online
Learn how to use bank rules to automatically categorize transactions from your bank.
When you download transactions from your bank, you need to categorize them so that they enter the right accounts. Bank rules can do this automatically.
The more QuickBooks Online uses the bank rules you create, the better it gets at categorizing. After a while, the app learns how to read transactions, then automatically adds details.
Here's how to set up bank rules.
Automatically categorize transactions with QuickBooks Payments.
Video transcript
[0:00] You can use bank rules in QuickBooks Online to speed up the process of categorizing transactions. When you set up bank rules, QuickBooks enters categories and descriptions into transactions for you. Bank rules can also enter transactions to your books automatically, if you choose. Let's go through how to create, use, and edit bank rules. To start, select All Apps, Accounting, and then, Rules.
[0:24] Then, navigate to "new Rule". First, enter a name for the rule. Next, select whether the rule is for money in or money out transactions and which bank and credit cards it applies to. Then enter what you want QuickBooks to look for in the transactions you receive from your bank and credit cards.
[0:44] You can choose the Description or Bank Text, which are details sent by the bank, and base it on text that either is or isn't in there. Or, base it on the Amount of the transaction. Add as many conditions as you need. If you already have some transactions awaiting your review, select Test Rule to see if what you've entered so far applies to any of them.
[1:07] This feature helps you confirm that you entered the correct conditions. If the rule does not apply to any currently unreviewed transactions, but should, adjust the conditions. Finally, you decide what QuickBooks does with downloaded transactions that meet the criteria you entered. Select the transaction type you want these transactions posted as.
[1:29] Then, enter the category you want QuickBooks to apply to the transaction. QuickBooks can also split transactions between multiple categories by percentage or amount. The rule can also apply other info such as payee, customer, project, and more. You may see different options depending on the company settings you've turned on.
[1:50] Adding info like the payee ensures you'll have accurate records and helps you to reconcile and run reports. If you turn on auto-add, QuickBooks applies the rule to any downloaded transaction it applies to and posts it immediately. Remember to use this with caution, because if you leave it on you won't get a chance to review transactions before QuickBooks adds them to your books.
[2:14] Select Save to create your rule. If you need to change a rule later, select Edit. Select the Action drop down arrow…and you can copy, disable, or delete a rule. Disable the rule to stop it from applying to transactions temporarily until you re-enable it. Delete a rule to permanently remove it.
[2:34] QuickBooks applies rules to transactions in the order they are in the rules center because QuickBooks can only apply one rule per transaction. Change the priority of your rules by selecting and dragging the grid. You can also export rules to use in a different company or import rules from another company. Go back to Bank Transactions.
[2:56] Whenever QuickBooks downloads a transaction, you can see if QuickBooks applied a rule to it. Select the Posted tab…and you'll see the transactions you and QuickBooks confirmed. You'll see "Auto-post" next to any transaction that QuickBooks automatically confirmed with a rule Now you're ready to use bank rules to categorize and confirm your transactions in the banking center!
Step 1: Create a bank rule
Note: You can create up to 2,000 bank rules.
Go to All apps
, then Accounting, then Rules (Take me there).Select New rule.
Enter a name in the What do you want to call this rule? field.
From the Apply this to transactions that are ▼ dropdown, select Money in or Money out.
From the in ▼ dropdown, select a bank or credit card account, or select All bank accounts.
Set the rule's conditions. You can set a single rule with up to 5 conditions. Set and include the following, then select + Add a condition.
In the Conditions fields, specify whether the rule applies to Description, Bank text, or Amount. Then select Contains, Doesn't contain, or Is exactly to decide how QuickBooks applies the rules.
Select the settings for the rule. Select the Transaction type, Category, Tags, and the Payee to apply.
Select Save.
(Optional) To reorder your bank rules priority, select reorder
and drag the rule to your desired order. The rule with the highest priority will always be applied first.
QuickBooks automatically applies your rules to transactions in the For review tab. These are the ones you need to review every day.
Tips:
Quickly add a rule for transactions in the For review tab. Just select a transaction, then select the Create a rule link to open the Rule Window and start setting conditions for the rule.
Copy, Disable/Enable, or Delete bank rules from the Actions ▼ dropdown on the Rules page.
Also keep existing bank memo - When the memo text field is empty, this will not stay toggled on and checked off by design.
Import existing bank rules
If you set up banking rules on another QuickBooks Online company file, you can export them to another company file:
Sign in to the company file you want to export the bank rules from.
Go to All apps
, then Accounting, then Rules (Take me there).Select the New rule ▼ dropdown and then Export rules.
Sign out of the company file and sign in to the one you want to import the rules into.
Save the export file in Excel.
Go to All apps
, then Accounting, then Rules (Take me there).Select the New rule ▼ dropdown and then Import rules.
Select Browse and find the Excel file you exported.
Select the rules and details you want to import.
Follow the prompts to finish the import.
Step 2: Review recognized transactions
After a rule is applied, a RULE badge appears in the Category field of the transaction. For auto-post rules, an AUTO badge appears.
To filter rules, follow these steps.
1. Go to All apps , then Accounting, then Bank transactions (Take me there).
2. Select the All transactions dropdown menu.
3. Select Rules, No rules, or Auto-post rules.
Next steps: Set up auto-post
Create targeted rules so that specific transactions are automatically accepted into your books from the Bank transactions (Take me there) page.
Tip: We recommend starting with simple, consistent transactions like rent or gas expenses. Then, use it to cover more transactions.
Follow the steps to create a new bank rule.
Turn on Auto-post under Automatically confirm transactions this rule applies to in the Rules window.
Select Save.
After you create an auto-post rule, any transactions on the Pending tab that meet the conditions are automatically added. Auto-post rules run when you sign in, upload a file, or create or modify a new auto-post rule.
If your bank rules aren't getting applied to transactions
If your bank rules aren't getting applied, it might be because you’re using a rule based on bank text when you meant to make a rule based on description, or vice versa. To explain the difference:
The bank text is exactly the same information the app receives from the bank. The bank text is the transaction you'd see listed in your bank account or on your bank statement.
The description is a simplified version of the bank text to make it easier to understand. For example, the app might simplify bank text by just giving the vendor name.
By default, the app shows the description in your list of transactions. To show the bank text instead:
Go to All apps
, then Accounting, then Bank transactions (Take me there).Select the Settings ⚙ within the Bank transactions section.
Select Show full bank description.
If you moved from QuickBooks Desktop
Bank rules work similarly in QuickBooks Online as they do in QuickBooks Desktop. If your rules have been automatically migrated from QuickBooks Desktop, notice the following differences:
QuickBooks Online supports up to 5 conditions per rule. The first 5 conditions for each rule from QuickBooks Desktop are migrated.
QuickBooks Desktop bank rules containing Begins with and Ends with clauses are matched with the Contains clause once migrated to QuickBooks Online.
If a migrated QuickBooks Desktop bank rule contains both Money in and Money out conditions, two bank rules are created in QuickBooks Online.
Find out more about how features and data move to QuickBooks Online.
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