When Zoho Books imports transactions via bank feed or statement import, each transaction initially appears as uncategorised. Zoho Books analyses the transaction description, amount, and date and suggests a match based on your existing records (open invoices, approved bills) or past categorisation patterns. If the suggestion is correct, you click Match or Accept. If not, you manually select the correct account or transaction.
For each bank transaction, you can: match it to an existing open invoice (for incoming payments) or open bill (for outgoing payments), record it as a new expense (selecting the expense account and vendor), record it as a transfer to another bank account, or exclude it if it is a duplicate or a transaction that should not appear in your books. For transactions that do not relate to any business activity (such as a personal deposit), exclude them and handle them separately.
Matching rules in Zoho Books automate categorisation for recurring transactions. For example, a monthly bank charge from HDFC always has the description “CHARGES” and is always for the same approximate amount. Create a matching rule that automatically categorises any transaction with “CHARGES” in the description to your “Bank Charges” expense account. The rule runs every time a new transaction is imported, eliminating manual categorisation for predictable entries.
Categorising a transaction in Zoho Books means assigning a bank feed entry to the correct account, invoice, or bill so it is correctly reflected in your financial reports.
Go to Banking, view the feed. For each uncategorised entry, click Match if the suggested match is correct, or click Categorise to manually select the account. You can also create a new expense or bill directly from the transaction.
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