.png)
Overview
When you import your bank transactions into Easy Cashflow, you will need to process each one to make sure it goes to the right place in your accounts.
There are three things you can do with each bank transaction:
There are also some handy FAQs at the end of this document.
Or you can see it all in a video:
1. Categorising
When there is not already a document (like an invoice, a payslip or a manually created expense) related to the bank transaction in Easy Business App, you can categorise the bank transaction into the correct category (or categories!)
1a. Simple Categorising
Here's an example of categorising an expense.
1. An outgoing bank transaction at Bunnings for $49.64 has appeared in the transactions list, because you bought some work shirts. Click on it to bring up the Categorise tab.
2. Easy Cashflow will suggest a category based on its best guess of what it thinks the category should be. While it is usually accurate, it isn't always, so we need to check the category is accurate. We can see below the category has been changed to Clothing, we have manually added the Supplier as Bunnings (this is useful for reporting later) and also added a Description of what the item is. If you want to upload a receipt, you can do that. The easiest way is from your phone (Easy Business App works great on both phones and computers).
3. Click Save to finish. The transaction status has now changed to Categorised.
Every time you categorise an outgoing, an Out document is created in the Ins & Outs tab. This represents the accounting record for your business. You can also create manual expenses and income items from this screen, by clicking the Create New button (or the floating + icon on mobile).
1b. Categorising to Multiple Categories
Sometimes you have a transaction that represents multiple categories. You will need to split the transaction into 2 (or more) parts.
1. A transaction for $185.61 has appeared in your transactions list from Coles for tea, coffee, milk, fruit etc... for the staff kitchen. Click on it to bring up the Categorise tab.
2. Easy Cashflow has suggested the category for this as Office Supplies & Expenses, but looking at the receipt you are reminded that you also bought a bottle of champagne for your Employee of the Month. This needs to be put into a separate category. Click Split to multiple to split the expense between two categories.
3. Complete the amounts and categories. It's also a really good idea when splitting expenses to add a note to each line item to explain precisely what it is. Click Add Note to do this.
4. You can add the Supplier an overall Description and also upload a receipt. Click Save to finish.
1c. Categorising Personal Expenses
Sometimes you may have an expense paid from your business account that is either entirely personal, or partly personal.
1. A transaction for $338 from Harvey Norman has appeared on the transaction list. Looking at the receipt, you see this was for a desk for a new employee, but that you also bought a new kettle for your home while you were there to replace a broken one. This is not a business expense. Click to bring up the Categorise tab.
2. The desk cost $294. Enter the amount of 294 against Office Supplies and then press Assign to personal to assign the remaining $44 as a personal expense.
3. You can see that a special Category has been added called Owner/Director Drawings. This is where personal expenses go. Click Add Note to include some text to remind you what this was for. And then click Save and you're finished!
You can combine splitting and personal expenses in any combination you like, as long as the total of the splits always equals the total of the transaction (i.e. the remaining amount if $0.00). You can split one transaction to as many as 50 line items (but that is massive overkill and is not recommended!)
You can also split a transaction into the same category but with a different GST treatment. Or even into the same category, with the same GST treatment, but a different note so you can easily see a particular expense line item.
You can always see exactly what has happened from the Ins & Outs tab, simply by clicking on a Matched item, as below:
2. Matching
When there is already another document in Easy Business App that relates to the bank transaction, you will want to match them together.
This is most common with Invoices (where you receive payment from a customer) and Payslips (where you have made payments to your employees). You can also match to existing manually created Ins (income documents) and Outs (expenses).
If you want to match something where an auto-match has not been suggested, simply click on the Match tab to switch from the default Categorise tab.
2a. Simple Matching
Here's an example of how to match an invoice payment against the invoice.
1. A payment has been received from a customer for a $2,000 invoice
2. Clicking on the item will load the Transaction Details screen. Easy Cashflow will suggest a match if a sensible matching document is found within a tolerance (to cover slight overpayments, bank fees etc...) Below we can see an invoice Match has been proposed (we are on the Match tab of the screen).
Clicking the small chevron > will take you to the Invoice so you can double-check it's the right one.
3. If you can't find the document you are looking for (perhaps because it from a long time ago) you can Filter to search for your own matches.
4. If you want to match to multiple documents, you can simply click the checkbox next to each document you want to include. Click Save when you're done.
2b. Matching Invoices with a Remaining Amount
Sometimes you will want to match to one or more document where the values do not quite match. For example, your payment may have attracted bank fees, or your customer may have slightly underpaid you.
In the example below, the invoice is for $2,007.70 but a payment has only been received for $2,000.00 due to bank fees.
We can either Record Part Payment here (if we expect the customer to pay the remaining $7.70) or Mark Invoice Fully Paid and categorise the difference into a category you can choose.
Pressing Mark Invoice Fully Paid will open the Categorise Difference options, where you simply need to choose what the difference is. Note the amount pre-populates, so you don't have to type it, and the Remaining amount at the top is zero, so we know everything is accounted for!
If you receive an overpayment you can either choose Record Overpayment to assign the difference onto the customer's account for use against a future invoice, or you can Categorise Difference and assign it to another category (for example, Misc. Income).
You can also match transaction against existing manually created Expense / Income (in/out) docs and payslips. There is no concept of "overpayment" for these, but the Categorise Difference logic is otherwise the same.
You can always see exactly what has happened from the Ins & Outs tab, simply by clicking on a Matched item, as below. And from there you can drill-down into the original document, as shown below:
3. Mark item as "I'm not sure"
When you just don't know how to deal with something, there's a special button to help you that will flag it for your bookkeeper (or accountant) to look at.
1. A transaction for $73.09 at a pub (Brewdog) has appeared on the bank feed. You took a potential client out for a drink, but you're not quite sure how to categorise it, as you know the rules around entertainment are quite complicated. Click to bring up the Categorise tab.
2. Click I'm not sure how to categorise this.
3. Enter a Note and attach the receipt. Click Save and you're done!
"Not Sure" transactions go into a special tab on the Bank Transactions screen so they are easy to find for bookkeepers and accountants. They can simply go through all the "Not Sure" transactions and categorise them appropriately. The more information you add to the note (and add the receipt!) the easier you'll make it for them. There is not In/Out doc created for these, and therefore no accounting entries are generated (you won't see these on the P&L, GD or Balance Sheet reports, for example).
Frequently Asked Questions (FAQs)
Q: What if I make a mistake?
A: If you make a mistake, you can simply Unmatch the transaction by clicking Unmatch in the top-right of the screen. This will "reset" everything to the way it was before you categorised/matched the transaction and you can start again. You can learn more about unmatching here: Unmatching Banking Transactions.
Q: What if I don't know what to do with a transaction?
A: Use the "I'm not sure how to categorise this" button (see above) and leave it for your bookkeeper or accountant. This is totally normal. Even things that look simple can get quite tricky. Determining what attracts GST, which category to put something in and how to split it is exactly what bookkeepers (and to a lesser extent, accountants) are specialists in! So, if you're in doubt, put it in "I'm not sure", rather than guessing and getting it wrong :)
Q: Do I have to snap a photo of the receipt for every transaction?
A: Honestly, this depends who you ask. Some bookkeepers will say that you must upload a receipt for everything, because if you get audited by the ATO, you'll thank your lucky stars that you did. It also means they can do their job quicker and more accurately. Others might say that for small amounts it's not necessary, but that it's mandatory for anything over the GST threshold ($82.50), or that they'll always want receipts for some expense types.
There are also certain things that the ATO are very hot on, like vehicle and fuel expenses. A bank transaction for $120 at a petrol station could be $120 for fuel for your van, or $120 of fuel for your personal car, or $120 of chocolates for your kids (or some combination). And if you don't have proof, you could be in serious trouble if audited.
Short answer: an ATO audit is an expensive, time-consuming and incredibly stressful process. The best thing to do is to take a photo of every receipt right at the time you get it, and upload it into Easy Cashflow using Easy Business App on your phone. You can create a new manual Expense item in about 20 seconds, then it takes 2 seconds to Match it in Easy Cashflow when it appears in your bank feed a day or two later.
Q: Why does an In/Out doc get created when I categorise a transaction?
A: You can think of the In/Out doc as a kind of 'accounting document'. These documents make real changes to your books and are reflected in your Profit & Loss, Balance Sheet, BAS reports etc... So, whenever anything happens that has an accounting impact in Easy Business App, some kind of In/Out is created. For example:
- You manually create an Expense after filling up at the petrol station. An Out is created.
- You manually record an invoice payment in Easy Invoice. A Customer Payment (In) is created.
- You categorise an expense from the Bank Transactions screen. An Out is created.
- You create a payslip in Easy Payslip. A Wages Payment (Out) is created (note these don't currently show in the Ins/Outs tab, because they create a special kind of system journal. You can see them in reports like the GL Detail report instead).
This means there is one place where you can see every in and out (apart from payroll) that happens in your business. In other accounting systems you generally have to go to many different screens to see this, or run a report. Easy Business App makes this, well... Easy :)