Matching and categorizing expenses for taxes and accounting
How to Match and Categorize Expenses
Matching and categorizing expenses for your business makes it easy to determine where your capital gets spent so you can manage it. With Sunrise, before you’re ready to match and categorize your expenses, you’ll need to input them.
Part 1: Creating an Expense – Manual vs Bank Sync
Note: Part 1 is all about creating an expense. If you've already completed this, skip to Part 2.
Creating expenses: There are two main paths to inputting your expenses, Manual and using a Bank Sync.
Manual: One is the manual method, which is exactly as it sounds, you input each expense individually. While manual can work for a few expenses, it can get tedious to do each month, especially if there are more than a few expenses. Here's a quick 2-step method to adding your expenses manually. Learn how fully to manually import expenses in bulk here.
Manually entering an expense:
Step 1: On the left hand column of Sunrise, click on the Expense tab. This will bring you to the Expenses screen.
From there on the top right, you'll see a green-lit button called Create Expense. That's where you click.
From there, you enter the expense information, and you're on your way.
Creating Expenses - Bank Sync: The second is far more robust and makes things easy, and that’s syncing your bank accounts. You can find out how to do that right here.
Part 2: Matching and Categorizing an Expense
Whether you’ve inputted manually or synced the expenses from your bank, the next steps are to match and categorize the expenses. Note: Either one will work with Sunrise, or a combination of both.
Step 1: On the left hand column click the link titled: "Bank Account." (See Image)
Step 2: Determining the account you’re going to reconcile.
Note: For most users, you can skip this step: In the drop down menu, in the top center section, you may need to select the Bank Account for which you are reconciling. (For many users, the default account is the only option, but if you’re linking multiple bank sources, you will have multiple options you may select). For most customers, the account name is “Business Checking” and out of the box, this is the default account. The accounts are listed alphabetically within the drop down menu if you’re needing to find alternative options. (See Image)
Step 3: Display the Transaction you need to Match:
When transactions exist, you will see the rectangular box “Match Transactions” on the top right light up green displaying the number of transactions you need to match. Our next step is to click this box. (See image).
Doing so takes you a page display of your Bank Account activity where each transaction is displayed.
The middle section are transactions from your bank account. The right-hand column are transactions you’ve manually inputted. Note: if you’ve only done one method, you’ll only see one column populated.
Part 3: Match up the Transactions
For this step, let’s use the expense at Lowe’s for $14.64 from the bank account
Note: If you’re using the Bank Account Sync Method only (no manual transactions): If you’re only using transactions from your bank account, you will not see any data in the far-right column. That’s totally great, and all you’d need to do is click the “Record Expense” link in the middle column and proceed to categorize the expense based on your determination of the expense type, including the Vendor. For this case our Vendor is “Lowe’s”. If your Vendor doesn’t exist, you will need to create it. Which Sunrise will prompt you to do.
Additionally, if you have only manually entered in a few expenses (and this sample transaction from Lowe’s expense happens to not be one of them) then you can simply proceed to click “Record Expense” as above and follow the prompts for amounts/accounts. When you're done, click the green "Match" button.
Reconciliation: If Matching Bank Account to a Manual Entry (If you're using Bank Sync only, this doesn't apply).
Once again for our sample Lowe’s transaction, we’ve actually manually inputted the expense to Lowe’s and synced our bank accounts. For this reason, the expense is showing up in both the middle column and the right column. To reconcile this, you can simply drag the expense from the right-hand column into the middle column.
The expenses in the right-hand column are sorted by date to make them easy to find.
Click and drag the manual expense (right hand column) to the matching bank account expense (middle column) and congratulations, the expense will disappear from the display as it is now reconciled! Feel free to clap and cheer at how great you are.
FAQ’s for Matching and Categorization:
Do I have to enter manual transactions? Nope. So long as all your business expenses are found in your synced bank account, you do not need to enter manual transactions. If you have expenses in two or more bank accounts, you can sync those too and save time.
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