Reconciling transactions is an essential part of any accounting system and KITT is no exception. This tutorial will give you a brief explanation of why we do it and how it works with KITT.
A simple way to think about reconciling transactions is this:
In an accounting system you need to have a reason for every transaction coming in or out of your bank account.
- I received $200 on the 12th of August because a tenant paid me $200 in rent.
- I paid $1000 on the 3rd of July because I paid my plumber $1000 to fix the hot water cylinder.
When you connect a bank to KITT you will have a list of transactions to and from your bank account for the last 2 months, but because KITT doesn't know exactly what these transactions were for we can't enter them into the accounting system in the right place until they are reconciled.
To reconcile transactions in KITT we use invoices for incoming transactions, bills for outgoing transactions, and transfers if the transaction is from you transferring money between your bank accounts.
Click on the Bank Accounts section of Accounting to view your connected bank accounts.
Next, select Reconcile Payments on one of your connected bank accounts to bring up the reconciliation view.
From the list of transactions, choose one to reconcile and click Allocate to begin.
There are several different types of reconciliation that you will come across when reconciling transactions. Click on each link below to learn more about that type:
KITT's automatic invoice matching
If KITT detects a possible match, the transaction will be outlined and can be approved with one click.
Matching existing invoices
You can select an existing invoice/bill to match it with a transaction. This is a common type of reconciliation.
Matching a new invoice
If there are no matching invoices or bills (usually because you haven't entered the correct one into KITT yet) you can create one and match it with the transaction.
Matching multiple transactions
If there are multiple transactions paying off an invoice/bill, you can match all of them to the correct invoice at once.
Matching multiple invoices
If you have a large transaction paying off multiple invoices/bills, you can match the transaction to all of them at once.