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Setting Up Bank Rules for Automatic Reconciliation in QuickBooks

Set up two bank rules in QuickBooks so Ignition can automatically reconcile your payouts, including payouts that contain refunds and reversals.

Written by Pat Kuo

Ignition can reconcile your payouts in QuickBooks Online for you, including the payouts that contain refunds and reversed payments.

Before that can happen, QuickBooks needs to know where to put your Ignition payouts when they land in your bank account. You do that with two bank rules, and you only need to set them up once.

⚠️ Without these rules, your payouts will not reconcile automatically and you will need to match them by hand.


Before you start

You will need:

  • QuickBooks Online connected to Ignition

  • An Undeposited Funds account in QuickBooks


Why you need two rules

Both rules watch your bank feed for the same thing, the text IGNITIONPAY in the bank transaction, and post it as a Transfer into Undeposited Funds. That gives Ignition the other side of the ledger to reconcile against.

  • The Money in rule handles your everyday payouts, where money arrives in your bank account.

  • The Money out rule handles negative payouts, where money leaves your bank account. This happens on a day when your refunds and reversals add up to more than the payments you collected.

Most days, only the Money in rule fires. The Money out rule matters on the days it does not. Without it, a negative payout never reaches Undeposited Funds, so Ignition cannot create the bank deposit and that payout has to be reconciled manually.


Step 1: Create the Money in rule

In QuickBooks, go to Accounting → Rules → New rule.

Create a rule with these settings, then select Save.


Step 2: Create the Money out rule

Go to Accounting → Rules → New rule again and create a second rule.

Every setting is the same as the first rule, apart from the name and Money out.

You should now see both rules in your rules list.


What happens from here

Once both rules are in place, Ignition handles the rest.

  1. Your client pays. Ignition marks the invoice as paid in QuickBooks and records the payment in Undeposited Funds.
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  2. Your payout reaches your bank. The payout appears in your QuickBooks bank feed, and your bank rule posts it as a Transfer into Undeposited Funds. This usually takes around a day.
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  3. Ignition creates the Bank Deposit. The deposit strikes the payout off against the payments it contains, balancing to $0.

A payout that includes a refund or a reversed payment reconciles the same way, as long as both rules are set up.


Checking that it worked

After your next payout lands:

  1. Go to Accounting → Chart of Accounts, find Undeposited Funds and select Account history.
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  2. Look at the tick column. Every row belonging to that payout should show R.

💡 Check the R column row by row rather than the account balance. Money in and money out can cancel each other out and leave the balance at $0 while rows are still unmatched.


Things to know

  • The bank text has to match. If your bank feed shows a different description for Ignition payouts, update the condition on both rules to match what you actually see.

  • Repeated rows. QuickBooks may show the same Bank Deposit as multiple rows. This is a display quirk, not a duplicate deposit.

  • Chargebacks and disputes. These are the one exception. Ignition records the dispute and notifies you, but no accounting entry is created automatically. If a dispute is lost, you will need to record the adjustment in QuickBooks yourself.


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