The 'Bank Explain' process makes sure your real-world bank transactions match your accounting records in Clear Books.
Real-world bank transactions are imported into Clear Books directly via our live Plaid bank feeds or importing bank statement files. The user can then simply ‘Explain' these imported transactions by deciding how they fit into your books.
Here are the most common examples:
Payment for an unpaid sales invoice or purchase bill: Clear Books creates the accounting record for the bank payment, and marks the invoice or bill as paid.
New business expense or income not yet recorded in Clear Books: the user simply specifies the type of expense or income, and the software creates both the accounting expense or income record and the accounting bank transaction record.
Recording a transfer made between two of your bank accounts, for example from your current account to your savings account.
Matching with a bank transaction already recorded in Clear Books; if the accounting records are already up to date, it simply marks the accounting record as reconciled.
Different businesses may use Clear Books to:
Create all records directly from imported real-world transactions.
Record bank transactions in Clear Books first and reconcile them with imported transactions later.
A combination of both approaches.
In all cases, the 'Bank Explain' process ensures that Clear Books reflects the actual bank account and that your financial records are up to date and accurate.