Connecting a bank account

Connecting a bank account means your transactions arrive on their own instead of being typed in from a statement. The product then suggests what each one matches — an expense, an invoice payment, some other income — and you confirm.

This needs Professional. Each connected account is something the banking provider charges us for per month.

Connect an account

On the Tools page, open Bank, and on its Accounts tab connect a bank or credit card account through Plaid, which is the service your bank recognizes and which never hands us your banking password.

Once connected, transactions import on their own as your bank reports them — usually the same day, because banks report to Plaid between one and four times a day — and a nightly check catches anything missed. A card charge that shows as pending and then posts is one transaction, at the amount that posted. If you had already sorted the pending charge, the posted one keeps what you decided, and an expense recorded at the pending amount takes the amount that posted — a tip added at the counter — unless you had changed it yourself. One the bank withdraws is marked removed rather than left in your spending.

Sort each transaction

Every imported transaction ends up in exactly one state. You decide which:

• An expense — money out, matched to an expense record.
• An invoice payment — money in against an invoice you raised.
• Other income — money in that is not against an invoice.
• Ignored — a transfer between your own accounts, or something that is just not business.
• A supplier bill — with Purchasing on, money out that pays bills from one of your suppliers. It is offered the bills it equals, or you choose them, and it pays them rather than becoming an expense of its own: the bills already are.

The product suggests; you decide. Nothing is ever classified without you confirming it. An automated guess that silently attaches a $2,000 payment to the wrong invoice is worse than no automation at all. Sorting transactions belongs to whoever holds Bank transactions — the owner, a Bookkeeper, or a role you built with it — and so does syncing: Sync on an account’s own transactions fetches what the bank has reported since, and changes nothing about the connection. Connecting and removing an account stay the owner’s.

Click an account’s name on Transactions to see that account’s transactions on their own; the owner can also open them from Transactions beside the account on Bank’s Accounts tab.

Void the expense or the income a transaction was matched to, and the transaction comes back to be sorted again. Put a supplier bill payment back to Uncategorized, and it comes off the bills it paid.

Set a rule for a merchant you see every week

The fuel station, the supply house, the phone bill: a merchant that always means the same thing can be suggested the same way every time. Categorization rules, at the top of Bank’s Accounts tab, lists your rules, and + Create rule makes one. From a transaction itself, open its status and choose Create a rule: the rules page opens with a new rule for that merchant already filled in — filed the way you filed the transaction, when that is a way a rule can file it.

A rule matches a transaction by its merchant’s name — a name that contains the words you type, or equals them exactly, capitals ignored — and says how to file it: an Expense, Income, a Transfer or Ignored. An expense or income rule can carry a category and a default job, and an expense rule a piece of equipment, so a fuel station’s charges land on the van they fill. A description you give replaces the bank’s on the record it makes.

A rule suggests; it never files. An uncategorized transaction from that merchant shows the rule’s suggestion first, with high confidence and the words Rule match. Applying it is your confirmation, as with any suggestion — for an expense, the new-expense form opens filled in with the rule’s category, job, equipment and description, and you check each before saving. An invoice payment is never a rule’s to suggest: it has to be matched to the invoice it pays.

A merchant gets one suggestion. Where two rules match it, the one applied most often wins, so two rules that disagree are a rule to fix. Switch a rule off to stop its suggestions without losing it; each rule shows how many transactions have been filed its way.

A rule you are done with is archived, not deleted. Archived, it suggests nothing and leaves the list, and the transactions it helped file stay exactly as you filed them. Tick Show archived to see it again and restore it.

Understand two rules that keep the books honest

These trip people up, and both are deliberate:

• An invoice payment is not income. It reduces what you are owed; it does not create revenue. The revenue was recognized when you raised the invoice. Counting both would double your income.
• A transaction matches at most one business record. No splitting one bank line across two expenses, because a one-to-one match is the only kind that can be reconciled with confidence later.

Know what a bank transaction is and is not

Imported transactions are never modified or deleted. They are the record of what your bank said, and they stay exactly as they arrived. What changes is the business record you attached to them.

Jobs are business context, not bank context. You do not assign a bank transaction to a job — you assign the expense to the job, and the transaction is matched to that expense. The bank does not know what a job is, and pretending it does is how reconciliations stop reconciling.

Add it, or put it away

Bank feed is one of the tools your business chooses: the owner adds it, or removes it, under Tools in the main menu — see Your tools. Transactions come in only while it is on. Removing it deletes nothing you have recorded; add it back and everything is where you left it, its settings included.