This article explains how the 'Guess' feature attempts to automatically explain your bank transactions in FreeAgent.
Guess is a FreeAgent feature that, when switched on, attempts to automatically explain transactions based on existing information in your FreeAgent account.
To correctly guess these explanations, FreeAgent works through the following rules in order. As soon as it finds a match, it will apply the matching explanation and move on to the next transaction. If it doesn’t find a match, the transaction will remain unexplained. Transactions that import through a bank feed and are explained by Guess will be marked for approval and appear in orange in your FreeAgent bank account.
Match against existing manually added transactions
First, Guess looks for any transactions that you’ve manually added in the same bank account, with the same date (±1 day) and the same amount as the imported transaction.
If Guess finds a match, it merges the imported transaction with the manual transaction to avoid duplication in your account. Guess will ignore any manual transactions that are locked.
Match transactions from PayPal
If Guess was unable to find a matching manual transaction, it moves on to the next set of rules. If the imported transaction is from PayPal, the following rules are triggered:
- If there is an invoice or credit note in FreeAgent that has been paid using PayPal, Guess marks the payment as withdrawn, and allocates the transaction to the invoice or credit note.
- The fee from any PayPal transaction will be automatically explained against Bank/Finance Charges.
Many of our users receive recurring payments from their customers and would like these to be explained automatically by Guess. If you add an income category to your company named “Subscription Income”, Guess will explain "Web Accept Payment Received", "PayPal Express Checkout Payment Received", or "Website Payments Pro API Solution" transactions as "Subscription Income".
Money transferred between your accounts
If the transaction hasn't been guessed yet then Guess moves on to the next rule: matching transfers between FreeAgent bank accounts.
Guess attempts to find an unexplained transaction in a different bank account with the same value as the imported transaction. If this is Money Out, the unexplained transaction that Guess is looking for needs to be Money In and between 5 days before and 8 days after the date of the imported transaction. If it’s a Money In transaction, then Guess looks for a corresponding Money Out transaction in a different account.
If such a match is found, Guess explains the imported transaction as a transfer between the appropriate bank accounts.
Paying off invoices and credit notes
Next, Guess will look for any non-PayPal invoices or credit notes that match the imported transaction.
Guess looks for any open invoices or credits notes dated within 3 months prior to the transaction date, and with a matching outstanding amount. If it finds a single matching invoice, Guess will explain the imported transaction as an Invoice Receipt or Credit Note Refund, and will mark the invoice or credit note as paid. If Guess finds multiple matching invoices, it leaves the transaction unexplained as we’d hate for you to chase the wrong customer for payment.
Guess will currently not match any invoices that have automatic Thank You emails enabled to ensure we don't send these emails to the wrong customer.
This rule also applies to partially paid invoices or credit notes. Guess will ignore any invoices and credit notes that are dated before the FreeAgent start date.
Paying off bills and bill refunds
If Guess hasn’t found any matching invoices or credit notes, it will look for outstanding bills and bill refunds.
Guess looks for any open bills dated within 3 months prior to the transaction date, and with a matching outstanding amount. If it finds a single match, Guess will explain the imported transaction as a Bill Payment or Bill Refund, and will mark the bill as paid. If Guess find multiple matching bills, it leaves the transaction unexplained to avoid paying off the wrong one. This ensures you always know who you’ve paid and who you still owe money to.
This rule also applies to partially paid bills. Guess will ignore any bills from before the FreeAgent start date.
Similarly explained transactions
Finally, Guess will attempt to explain the imported transaction based on previous explanations of similar transactions, using the following criteria:
- Only matches on the latest 10,000 transactions in the bank account
- Only matches money in to money in, and money out to money out
- Explanation has an identical description as the imported transaction, after removing any digits
- Previously guessed explanations that are marked for review will be ignored
If a match is made, Guess explains the imported transaction with the same category and exact description as the matched transaction. If there are several matches, Guess chooses the most recent one. Guess will also link the transaction to a project and re-bill it at a set amount or rate if the previous matched transaction was linked.
Not all transactions can be guessed using the similarly explained transaction rule. If an imported transaction has any of the following attributes it will be ignored:
Transaction description starts with:
- CCID CREDIT
- CHQ UNCLEARED
- CARD PAYMENT ON
- AMAZON *MKPLACE EU LUXEMBOURG AM
- Visa Sales Amazon Eu
- ELECTRONIC BANKING
- Paypal Payment
Some transaction explanations don’t make sense to repeat, such as payment of a particular invoice. The following types of transaction explanation will not be repeated by Guess:
- Transfer In
- Transfer Out
- Invoice Receipt
- Credit Note Refund
- Bill Payment
- Bill Refund
Guess has been enhanced with machine learning algorithms that can automatically categorise new transactions. Guess does this by identifying the relationship between a transaction's description and the category applied across other FreeAgent explanations with similar descriptions.
For example, Guess might see that users typically explain Starbucks transactions as ‘Accommodation and Meals’, so if we detect a Starbucks transaction imported into your account, our new algorithm will automatically suggest an explanation of ‘Accommodation and Meals’ to help you get started faster.
What should I do if any of my transactions have been guessed incorrectly?
Navigate to the 'Banking' tab at the top of the screen and select 'Bank Accounts' from the drop down menu.
Choose the relevant bank account from the list of accounts.
You can easily remove any incorrect explanations that Guess has made by ticking the checkbox next to each transaction and then clicking the ‘Remove explanation’ button from the right-hand sidebar.