How to get bank lines coded and ready for a bookkeeper's review

To code bank transactions faster, let the rules code everything routine, give each remaining line a proposed code with a reason beside it, and query the client about each payment with no document behind it, so that the lines reach the bookkeeper ready for review. An AI worker can do the second and third. The bookkeeper then approves, corrects and reconciles, which is the part that needs a bookkeeper. The VAT treatment of anything doubtful, the reconciliation and the return stay with your people.

What the tools already do, and what they leave

A bank feed brings the transactions into the bookkeeping software. A capture tool such as Dext reads the receipts and invoices and applies the supplier rules it has learned. Bank rules in Xero treat similar transactions the same way every time, and Xero suggests matches and categories of its own, and on some plans reconciles the obvious ones itself. For a tidy client that settles most lines.

What is left is what fills a bookkeeper's week: a card payment to a supplier never seen before, a transfer with a reference nobody recognises, a payment with no invoice, a receipt where the VAT is not obvious. Each needs a little thought or a question to the client, and each is small enough to be left until the VAT return is due, usually one calendar month and seven days after the period ends. A sole trader or landlord within Making Tax Digital for Income Tax now has a quarterly date where there was none: a digital record of the amount, date and category has to exist before each quarterly update, due on 7 August, 7 November, 7 February and 7 May.

From the feed to the review, step by step

1. Let the rules run, then look at what they left. Do this on a fixed day each week for each client, not when the quarter ends. The pile is smaller and the client still remembers the transaction.

2. Sort the remainder into four piles. A known supplier with a document: code it. A known supplier with no document: code it and ask for the document. A new supplier: needs a decision. Anything where the VAT or the nature of the cost is unclear: needs a bookkeeper's thought.

3. Propose a code with a reason. Account, VAT code and tracking category, and one line of why: "coded to motor expenses as the last eleven payments to this supplier were". A code with a reason can be approved at a glance or corrected. Where the client's own ledger offers no precedent, leave the code blank and say so: a blank is more use to the reviewer than a guess.

4. Query the client in one message. List every unexplained payment with its date, amount and payee, and ask what each was for and for the invoice or receipt. A single weekly message is easier for the client to answer than a separate email for each line.

5. Order the review list by doubt. New suppliers, large amounts and VAT questions at the top. Routine lines with documents at the bottom.

6. Review, approve, reconcile. The bookkeeper approves or corrects each proposed entry and reconciles the bank. Keep a tally of the corrections. It shows whether the proposals are getting better, and which client's conventions are still unwritten.

7. Turn corrections into rules. A line corrected the same way twice is a bank rule or a supplier rule waiting to be written. Do it then, and next week's pile shrinks.

Which steps an AI worker can take on

Steps two to five are the part an AI worker takes on, with a written job, a bookkeeper it reports to and a monthly review of its work. It works from a bank export and the documents, sends the weekly query and its reminders in the practice's wording, and hands the bookkeeper the review list. The bookkeeping data entry role page sets out the specification. Getting the client to send documents in the first place is a separate job, described under chasing clients for documents.

What the bookkeeper keeps, and why

• Approval of every batch. The books are the practice's work and a bookkeeper signs them off.

• VAT treatment that needs judgement. The agent can mark a line as doubtful and say why. It does not decide the treatment and it does not submit a return.

• The bank reconciliation. The matching is done by your bookkeeper in the bookkeeping software. The agent works from the documents and a bank export, and how its draft entries reach your package is confirmed with you at the start.

• New suppliers and anything it cannot code with a reason. These reach the bookkeeper uncoded, because the agent does not guess.

• A client who disputes a transaction, a suspected fraud or duplicate, and every phone call.

What to have ready before you start

Three counts to start from: lines left uncoded per client per week, lines waiting on a document, and how many codes the bookkeeper changes at review. Then, for each client, the coding conventions that are in your bookkeeper's head and not in the software: what gets capitalised, which costs go to which tracking category, how the director's personal spending is treated. The current bank and supplier rules, tidied. The wording of the weekly query. And a fixed day for each client's review.

Where this sits in the growth of a practice is covered in how to scale an accountancy practice without hiring more staff, and the accountancy and bookkeeping page covers the rest of a practice's admin an agent can take on, from new client onboarding to chasing records before a deadline.

Your bookkeeper would approve every batch and decide any VAT that needs judgement, and an AI worker would propose a code and its reason for each line your rules leave, leave a blank where it has none, and chase the client for whatever is missing. When the week runs short, is review the part that gets squeezed? Talk to our agent.