Set up bank rules to categorize online banking transactions in QBO
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 create bank rules for recurring transactions:
Create a bank rule
Go to Transactions.
Select Bank transactions.
Click Rules.
Select New rule.
Enter a rule name, such as Monthly Internet Bill or Stripe Deposits.
Under Apply this to transactions that are, choose:
Money out for expenses, bills, credit card charges, loan payments, etc.
Money in for deposits, sales income, refunds, etc.
Set the rule conditions
Choose the bank or credit card account the rule applies to.
Then set conditions such as:
Bank text contains “Verizon”
Description contains “Amazon”
Amount equals “125.00”
Amount is less than/greater than
Transaction type
You can usually choose whether the transaction must match all conditions or any condition.
Example:
For a recurring Zoom subscription:
Money out
Bank text contains: Zoom
Amount equals: 15.99
Assign the transaction details
Tell QuickBooks what to do when the rule finds a match:
Transaction type: Expense, Transfer, Deposit, Credit Card Credit, etc.
Category: Software, Office Supplies, Meals, Utilities, etc.
Payee: Vendor or customer name
Class/location/customer/project: Use these if your company tracks them
Memo: Optional note
Example:
Zoom subscription:
Transaction type: Expense
Category: Software & Apps
Payee: Zoom
Memo: Monthly Zoom subscription
Optional: Auto-add transactions
You may see an option for Automatically add to my books.
Use this carefully.
It works well for predictable transactions like:
Bank service fees
Monthly subscriptions
Rent
Loan payments
Insurance premiums
Avoid auto-add for transactions that need review, such as:
Amazon purchases
Transfers between accounts
Payroll
Merchant deposits with fees
Transactions that may need class, customer, or project tracking
Save the rule
Click Save.
Going forward, QuickBooks will apply that rule to matching downloaded bank transactions.
Best practice
After creating rules, go back to Bank transactions → For review and check that QuickBooks is applying the correct category before adding transactions.
For transfers, use a Transfer rule instead of categorizing it as income or expense. For example, a credit card payment from checking should usually be recorded as a transfer/payment, not as an expense.
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.
