Question
I am interested to find out more about how your software “learns” from your imported transactions.
Answer
The concept behind how Budgets Get Real learns your transactions is simple.
Say you have the following two lines on your credit card statement:
Woolworths Chapel Hill 34698754678
Woolworths Indooroopilly 6789456
As we can see here, the 3rd or 4th word is a typically a reference number which varies for each transaction.
The first thing you do is create a name for these transactions, say “Woolworths Supermarkets” and initially link the two entries in the statement to this name. Thereafter, Budgets Get Real automatically recognises these patterns in all other statement strings and applies these to this name.
The next stage in the learning process occurs when you link the name “Woolworths Supermarkets” to a spending category e.g. “Groceries” (and possibly a Job code). Do this once for a name and it will automatically apply itself after this. If you allocate expenses to several categories and job combinations it will suggest the most frequently used, but tell you that other options exist.
Cheque transactions can not be recognised automatically by name. You must nominate a name for each cheque number. Once you have nominated a name, however, the categorisation part is often automatic.
The key to getting most of your transactions automatically categorised
Is to have statements with uniquely recognisable descriptions and to apply sensible names to them. The best names are those that have one or more “strong” words - in this case “Woolworths” is a strong word.
Credit card statements usually have descriptions that are easily recognisable and so automatic categorisation rates around 90% are not uncommon.
Internet bank statements are a different proposition. Often you will see a string of descriptions like “Internet Banking Credit”. If you can’t recognise who this receipt is from, then neither can any program. However, once you select a name, usually the other 50% of the work is automatically done for you.
The trick with Internet bank statements is to think about the description you enter when you make a payment or deposit. Usually if you don’t specify a note on the transaction you will get your bank’s default description - like “Internet Banking Credit”. You should, where possible, specify clearly who it is to. Then you will immediately know, by looking at your statements, and Budgets GetReal will automatically name and categorise them.
