1. What is the bank explain process


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: 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:

  1. Create all records directly from imported real-world transactions.
  2. Record bank transactions in Clear Books first and reconcile them with imported transactions later.
  3. 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.


2. The Bank Explain screen


The Bank Explain screen (shown below) provides a variety of ways to explain bank transactions. This screen can be accessed via two methods, either by explaining transactions from an imported bank statement or via the manage money options for each bank account.


 

2.1 Access Bank Explain via Imported Statements


An imported/re-created statement will usually contain multiple transactions to explain in a list. There are multiple ways of creating an imported bank statement:



Once the statement is imported, it will be listed under the 'Imported transactions that need explaining' table at the bottom of the Money > Bank accounts menu. Just click on the 'Explain' link to access the Bank Explain screen.



2.2 Access Bank Explain via Manage money


The manage money options allow you to explain one transaction at a time on an adhoc basis. 


To access the Bank Explain screen just head to the Money > Bank Accounts menu and select 'Money in', 'Money out' or 'Transfer' under the 'Manage money' column for the appropriate bank account. 


 

Next, you will be required to fill in a form to enter the date amount and description of the payment. 


Clicking on the 'Explain' button will take you to the explain screen where you will be able to select a contact, account code, VAT rate, etc