Transaction Rules let you automatically categorize recurring bank transactions based on conditions you set (e.g., description contains “Starbucks”). This reduces manual work and keeps books consistent. There are two types of rules - income and expense - and each has slightly different criteria (see below for details). With Formations, you can request income or expense rules to adjust how you want your transactions to be categorized and your books to be organized. Rule requests will be evaluated by the Formations bookkeeper for compliance and accuracy, and once approved, they can be applied to future transactions or to all past and future transactions.
Request a Rule
- Go to Accounting->Categorization Rules page (https://app.formationscorp.com/dashboard/accounting/transaction-rules)
- Click the Request New Rule button.
- In the pop-up, choose Income or Expense.
- Enter the Keyword or phrase you want to use to find matching transactions.
- Enter the Vendor and the Category you would like matching transactions to be assigned to. If this is an Income-type rule, you will only be asked to enter the category.
- NOTE: the available categories are based on your chart of accounts and our bookkeeping best practices.
- Submit the request. The pending request will show up at the top of the page under the In Review table.
- Once the rule is approved, it will move to the Existing table.
Exact Match vs Non-Exact Match
There are two types of matches for the keyword you enter to find matching transactions: exact and non-exact matches. Exact match will try to match the exact keyword you enter, while non-exact will find all transactions that include that keyword. For example, if you use "Startbuck" as an exact match, transactions that only have "Starbucks" in their description will be found. In contrast, if you use a non-exact match, then transactions that include phrases like "Startbuck coffee" or "Starbuck store" would match.
Apply to Past Transactions
Rules can be applied to either all future transactions or past and future transactions. If you request that the rule be applied to both past and future transactions, then previously categorized transactions will be updated, provided the books for those transactions remain open. Formations closes the books once a year, so you can assume that rules with "past transactions" will be applied to all transactions for the current year.
View Existing Rules
All active rules that apply to your books will be visibile on the table names "Existing Rules." You can find active rules by using any of the column headers to search, sort or filter.
"Discuss" a Rule
In case you want to provide additional information about a rule (requested or existing), ask a question or request an update, you can click on the rule or the comment icon 
to open the threaded notes pop-up and add your comment. Your bookkeeper will receive a notification to review the comment. If your comment requires a follow-up, you will receive a response via the threaded notes, with a notification via email and on the app.
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Best Practices
- Start simple, then expand. Begin with consistent vendors (rent, fuel) before complex patterns.
- Use Non-exact match to catch common variations in the transaction description.
- Prefer one clear rule over many overlapping ones.
- Trust your bookkeeping team. You have a professional team that takes care of your books. Add context to your requested rules and they can make sure the correct rules are applied.