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How the bookkeeping works

You don't need to know any of this to use BookKeepMate. It's here because owners who understand what happens to a transaction trust the numbers more — and ask better questions of their accountant.

Real double-entry books

Every transaction becomes a balanced journal entry in a general ledger — the same structure an accountant uses. A $49 software charge on your card debits Software & Subscriptions and credits your Business Visa. Because every entry balances, the balance sheet always balances and the cash-flow statement always reconciles to your bank.

Entries are never edited. A correction posts a reversing entry and a new one, so there is a complete audit trail.
Closed months are locked; nothing can be posted into them without reopening the month first.
Money moved between your own accounts is a transfer, not income or expense, and never inflates your P&L.

How a transaction gets its category

Each new transaction runs through a short list of checks. The first one that is confident wins; the model is only asked about what the earlier steps couldn't settle.

Transfer match. If an opposite amount appears in another of your connected accounts within three days, both sides are booked as a transfer.
Your rules. Rules run in priority order; the first match wins. See Rules.
What you've taught it. Every correction you make is remembered by merchant. The next charge from the same merchant in the same direction gets the same category — no model involved.
The model. Remaining transactions are categorized by an AI model given your chart of accounts, the merchant, description, amount, direction and the bank's own category hint. It returns a category, a confidence score, and sometimes a question for you.
The gate. A model decision is posted automatically only when it clears all of these: confidence at least 90% (rising to 98% for amounts between $500 and $5,000), the amount is under $5,000, the category isn't an owner-equity or tax account, and the model didn't flag it for a human. Anything else goes to your review inbox with the suggestion pre-filled.

Note: This is why the inbox is small and gets smaller: rules and memory handle the repeats, the model handles the obvious, and you only see the genuinely ambiguous — a new vendor, a big number, an Amazon order that could be anything.

Words you'll see

Posted: The transaction has a category and is in the ledger. It counts in reports.
Needs review: Waiting for your answer. It is not in the ledger yet, and the month can't close until it is.
Excluded: Deliberately kept out of the books — a duplicate, something before your books start date, or something the bank withdrew. Not in reports.
Transfers Clearing: The account both sides of a transfer post to. It nets to zero when the two legs are matched; a lingering balance means one leg is missing (usually an unconnected account).
Owner Draws / Owner Contributions: Money you take out of the business for yourself, and personal money you put in. Equity, not income or expense — so "Personal" never touches your profit.
Locked: A closed month. Reports for it won't change unless you reopen it.