Transactions are a central part of the service. Without transactions, you can not see how an account develops over time – so it is important to be disciplined with registering transactions to get an accurate overview of your personal finances. Our service offer something called double bookkeeping. Double bookkeeping involves that you record both incoming amounts and outgoing amounts. The benefit is that you get precise information of where your money comes from (to your accounts) and where your money is spent. We currently support to ways to register transactions. You can either add a new transaction using our form (see "Add transaction"), or you may import multiple transactions to one account (see "Import transactions"). In this guide you will also receive some tips on how to record different types and categories of transactions.
Figure 1: Screenshot of transactions.
To retain good order of your transactions in our service, we recommend to register each transaction when it has been completed. For instance, you can go to your dashboard after a purchase, click "Add transaction", and fill in the form.
Figure 2: Screenshot of transaction form.
A transaction must have a date and at least two posts. Even though description, comment and attachment (receipt, invoice, etc.) are optional, we recommend filling these information as well to help you keep track of transactions.
You need at least two posts per transaction, where the sum of "Incoming" equals the sum of "Outgoing" for the transaction to be registered correctly. If the sums are not equal, it may cause some calculations and visualisation to be incorrect. You may have more than two posts, e.g., one account with an "Outgoing" amount and two accounts with "Incoming" amounts (see "Multiple expenses in one transaction" for more information).
If you have several transactions to add, it can be tedious to register each transaction through our form. We offer the possibility to import several transactions, making it simple and efficient. Currently, we support importing an Excel list of transactions tied to one account at the time. This can for instance be a transaction list that you have exported from your bank, where they are tied to one of your bank accounts.
You may start a new import by navigating to Transactions -> Import to account, or you may go to a specific account and click "Import transactions". If you follow the latter, then that account (main account) will be automatically selected and you will only need to select the file you wish to upload.
The second step in the process is to choose which columns are related to which input fields during registration. The date field is required and you must either choose one column for "Amount" or set the respective columns on "Incoming" and "Outgoing". If you set a column for Amount, then a positive value will be interpreted as incoming to the main account and a negative value will be interpreted as outgoing from the main account.
The last step consists of setting counter account on all transactions in the list. It can therefore be a good idea to not include too many transactions in each import. Counter account is another account than the main account (chosen in the first step) and will have the opposite flow of the amount (e.g., outgoing from main account is incoming to counter account). There is a limitation here that you may only choose one counter account, so if there is a transaction that should have more than one, then you need to edit the transaction after the import has been completed.
A good method to find out whether you have registered all transactions related to one of you bank accounts, is to check if the balance in the bank is equal to the balance in our service. If it is not the same and you have registered all the transactions you desire to register, it may be that you have other transactions on the bank account. There may be several reasons to exclude some transactions, e.g., if you a bank account with a long history which is not necessary for your purpose.
To handle such cases, you may register a separate transaction to "deposit money" to the account. This can be done by simply creating an asset called "Equity" (see "Register an account"). Then, you can create a transaction with the description "Opening balance", where you set the amount to what is necessary to have the same balance as outgoing from the account "Equity" and incoming to your bank account.
Usually you come into possession of an asset through a purchase. This can be a car purchase, house purchase or purchase of another asset. When you purchase an asset there is an amount going out from one or more of your accounts to the seller's account. This is not an expense, as you in reality move a value you own from one or more accounts to another account that you later can sell to others.
For instance, when purchasing a house for kr 2 500 000 you have not used those money on an expense, but moved the value into a physical object. The method for recording such a purchase is as follows:
Add a new transaction with the following posts:
When you have added the transaction, the value of your new asset is visible in your dashboard and is used to calculate your equity (assets + debts). This is essential if you have purchased the asset with borrowed funds so that you are able to determine if you capacity to take on more debt.
The process with the sale of an asset has a lot of commonalities with a purchase, but there is an important distinction between that you have to keep in mind when recording a sale. The sell amount may be the same, lower or higher than the value you have registered on the asset. After a sale, the value of the asset must be zero as you no longer own it and, therefore, have no value in it. If the sell amount is different from the value, then you must use another account in addition. If the amount is lower than the value, then you have a realised loss (expense), and if the amount is higher, then you have a realised gain (income). Add account (income or expense) and use it when you record the sale.
An asset may either increase or decrease in value over time. To reflect changes in the value, you may add transaction for such changes. The frequency for such transactions depends on what the asset is (affect how often value changes) and your need (e.g., overview for tax purposes only needs to be changed once a year), but will often be between monthly and yearly.
We recommend that you register a new income account called "Unrealised gain" and an expense account called "Unrealised loss". How detailed you desire to see gain/loss is up to you, so may have separate accounts for car, house, shares, etc. if you desire. You can add transactions for increase and decrease in value as follows:
Example 1: Car increase with kr 1 000 in value
Example 2: Car decrease with kr 1 000 in value
By registering increase and decrease in value, you obtain a better overview of your assets, which can be used to improve your financial planning.
When money is transferred to a debt account, it is interpreted as a debt repayment, i.e., the remaining debt decreases. There are often expenses related to debt, such as interests and fees, so you have to consider these when you register debt repayment. For instance, if you transfer kr 1 000 on a debt account, where you pay kr 50 in interests and kr 5 in fees, then you have repaid kr 945 of the debt. To include expenses in cases as such, you may add a post on "Interest expenses" (kr 50 incoming) and a post on "Fees" (kr 5 incoming), and the remainder is going into the debt account. Then the debt balance will be the remainder of your debt.
There are several reasons for why you would receive money from a friend or two. Depending on the reason, there are different methods for handling the transactions, and it is not necessarily one method that covers all cases.
If you make a purchase on behalf of your friends, it is generally best to reimburse the amount they transfer to you, to the expense account. In that way, you gain a more accurate view of your expenses. For instance, you pay kr 1 000 for a restaurant meal for you and a friend. You agree that you will split the cost evenly and your friend transfers kr 500 to you later. Then, you can add a transaction where you transfer kr 500 from your restaurant expense account to the account they transfer the amount to.
Another case is that you receive money as a birthday gift. In this case, the money is an income for you and you can record the amount from an income account (e.g., "Gifts"). This also applies when you give a gift, but then you transfer the amount to an expense account instead.
Other cases which is not related to a reimbursement or a gift can be hard to categorise, e.g., due to the transaction taking place a while ago and you have forgotten the reason for it. Then there are primarily two approaches; you can either use a debt account (incoming and outgoing), or an income account and an expense account. By using a debt account you avoid a friend payment being interpreted as an income or expense, and as a consequence, is left out from certain analyses and reports. The downside is that it can be interpreted as "eternal debt", i.e., it may increase and decrease without ever being zero (repaid). By using both an income account and an expense account you avoid "eternal debt", but it may lead to your income and expenses fluctuating a lot over time.
The optimal solution is if you are able to place a friend payment as either a reimbursement or a gift. In other cases you will have to choose a solution that is the most suitable for you and your finances.
Sometimes it can be useful and necessary to split a transaction into several categories. For instance, it may be a case where you purchase different goods, but pay in one transaction. A benefit with double bookkeeping is that it is simple and efficient to split a transaction.
Let's say you have one expense account for "Groceries", one for "Household goods" and one for "Alcohol and tobacco" that you wish to have an overview of with their own separate budget posts. If you have made the following purchase at a store:
it is not required that you record all expenses on one account. Instead, you may create one transaction with the following posts:
Figure 3: Screenshot of transaction with multiple expenses.
With this approach you are able to obtain a more detailed overview of your expenses. This method for bookkeeping also works the other way around. If you make a purchase where you pay both in cash and with a payment card, you may register one transaction with multiple accounts where a sub amount is outgoing from each account, e.g., kr 100 outgoing from "Cash" and kr 300 outgoing from "Checking".
What you record as an expense or as an asset is up to you, but you may have some use for recording a purchase as an asset. A rule of thumb is as follows: is it a consumer good (expense) or something that has a longer life time (from 3-5 years). Furniture and interior is a good example of something that should be an asset and not an expense. These are things that are expected to last longer and you may want to sell them at a later time. Clothes and shoes are a bit more tricky to decide on, as some subcategories are prone to lasting shorter (socks, underwear) while others may last longer (suits, dresses, high-end clothing).
There are several benefits to registering things as assets, such as: