Creating Bank Reconciliation Rule

A Bank Reconciliation Rule eases the reconciliation process by matching Bank transactions, based on the Rule Criteria, and reconciling them with an automatically generated Journal Entry. Creating bank reconciliation rule involves entering the header details, transaction search criteria and value lines.

To create a bank reconciliation rule, go to Menu > Accounting > Bank Reconciliation Rule > Bank Rule > Bank Reconcile Rule

To create the bank reconciliation rule, you'll begin by entering the header details, such as rule name, type, and bank account. Once the basic details are set, you can define the transaction search criteria and value lines.

Bank Reconcile Rule Header Fields

Field	Description
Rule Name	Enter a unique name for the rule for easy identification and reference.
Rule Type	This field allows you to choose the type of rule you want to create. Select Debit if you’re matching payment transactions and Credit if you’re matching deposit transactions.
Bank Account:	Select the bank account this rule will apply to.
Reference	This field allows you to enter a reference for the reconcile rule. The generated journal entry will include a memo based on the reference field from the bank transaction.

After entering the header details, proceed to set the transaction search criteria.

Transaction Search Criteria Fields

Field	Description
Match	Choose whether to match All or Any of the conditions.
Search By	Select the field to search from the bank statement’s transaction.
Operator	Choose the operator for the search (e.g., equals, contains).
Value	Enter the value to search for.
-/+	Use the +/- buttons to add or remove search conditions as needed.

One line of the generated Journal Entry will go entirely towards the account that is being reconciled. But the remaining Debit or Credit lines (depending on the Rule Type chosen), are controlled by the fields below. Fixed lines will show as fixed amounts and variable lines will take the remaining amount after the fixed lines and distribute it according to the percentage values.

Fixed Value Lines Fields

Field	Description
Store	If required, select the store of the fixed-line.
Account	Select the account of the fixed-line.
Name	If required, select an entity to associate with the fixed-line.
Amount	Enter an amount for the fixed-line.
Tax (Inclusive)	If required, select a tax code for the fixed-line.
Project Class	If required, enter a memo for the fixed-line.
Memo	Click here to add the fixed line to the rule.

After entering the details, click "Add" to add the fixed value line to the rule.

Remainder Variable Value Lines Fields

Field	Description
Store	If required, select the store of the variable line.
Account	Select the account of the variable line.
Name	If required, select an entity to associate with the variable line.
Percentage	Enter a percentage for the variable line.
Tax (Inclusive)	If required, select a tax code for the variable line.
Project Class	If required, enter a memo for the variable line.
Memo	If required, enter a memo for the variable line.

After entering the details, click "Add" to add the variable value line to the rule.

Automated Bank Reconciliation Rule Creation

XoroERP provides an automatic bank reconciliation rule creation feature, improving efficiency and accuracy in managing reconciled transactions. This helps to streamline the process of creating and applying bank reconciliation rules.

This is an app config based feature.

How it works

1. Auto Create Bank Reconcile Rule New App Config: A new config, Auto Create Bank Reconcile Rule, has been added. When this setting is enabled, the system will automatically create bank reconciliation rules whenever a journal entry is created using the reconcile module.

   
2. Conditions for Auto Rule Creation:

   Rules will be auto-created for Reconciled Transactions that meet the following criteria:

   • Only one transaction is present.

   • A Match is found for the transaction.

3. Auto Application of Created Rules

   The auto-created rule will be applied automatically for subsequent transactions that match the specified conditions, reducing manual effort in repetitive reconciliation tasks.

4. Creating the Rule

   To create the rule follow these steps:

   • Go to the Reconcile Bank Account module and navigate to Options > Journal Entry of any transaction with a match.

     
   • Clicking on the option will display a "Create Bank Reconcile Rule?" pop-up window, prompting users to select the Bank Reconcile Rule search criteria fields to create the rule.

     
   • The selected field values will automatically align with those in the Reconciled Transactions, allowing for precise rule customization. If the selected search criteria(s) have no value, they will be excluded from the Bank Reconcile Rule.

   • Click "OK" to create the rule.