Bank lines and matching, explained

What a bank feed is, what "matching" a bank line means, and why it keeps your books true. Read this first if you have never reconciled a bank account.

Every time money goes in or out of your business bank account, your bank keeps a record of it: the date, a short description, and the amount. In Todah each of those records is called a bank line (the screen also calls them transactions). A deposit is money coming in. A withdrawal is money going out.

Your invoices and bills say what should happen: "this client owes me this much", "I owe this supplier that much". Your bank lines say what actually happened. Matching is the job of putting the two side by side and saying "this deposit is the payment for that invoice" or "this withdrawal paid that bill". Accountants call this reconciling.

Why it matters

• It is how an invoice becomes paid. When you match a deposit to an invoice, Todah records a payment on that invoice.
• It is how a bill gets paid. When you match a withdrawal to a bill, Todah records the payment on the bill.
• It catches what is missing. A withdrawal with no bill behind it is usually an expense you never entered. A deposit with no invoice behind it is money you have not explained. Either way, your profit figures are wrong until you deal with it.
• It catches mistakes the other way too: an invoice you marked paid by hand that never actually arrived in the bank.

Every kind of bank line has a place

• A client paying an invoice: match the deposit to the invoice.
• You paying a bill: match the withdrawal to the bill.
• Spending with no bill (a bank fee, a fuel stop): create the bill from the line.
• Money in with no invoice (a cash sale, interest): record it as income from the line.
• Money moved between two of your own accounts: match the two lines as a transfer.
• Money you put in or took out yourself, a loan coming in or being repaid, and card payouts from Stripe: categorise the line.

Two ways to get bank lines into Todah

• A bank feed (Business and Enterprise plans). You connect your bank once and new lines arrive on their own, several times a day. See "Connect a bank".
• A statement import (every plan). You download a statement from your bank's website and upload it to Todah: a CSV file, or a PDF or photo where reading statements is available. See "Import a bank statement".

You can also type a single line in by hand with Add Manually, for anything that never showed up in a file.

The routine, in short

1. Bring your bank lines in, with a feed or an import.
2. In the menu on the left, choose Banking. The Transactions list starts on Needs attention: the lines nobody has dealt with yet.
3. For each line, choose Match. In the window that opens, pick the invoice or bill it belongs to, or use one of the other choices in the same window: Transfer, Categorise, Create a Bill from This Entry, or Record Income from This Deposit.
4. Repeat until Needs attention is empty. Doing this once a week takes a few minutes; leaving it for a year takes an afternoon.
5. When a month's lines are all matched, tick each one off against your bank statement with Reconciled.