Reconciling transactions

Reconciliation is telling Arvello what each bank transaction actually was: a client paying an invoice, a supplier being paid, salary, tax, or money moving between your own accounts. Each answer creates the right bookkeeping entry behind the scenes — which is what keeps your reports and VAT figures truthful.

Every transaction sits in one of three states: Needs review (nothing decided yet), Done (matched or categorised, with a journal entry behind it) and Personal / Excluded (not business activity). The aim: nothing left in Needs review.

The Needs Attention screen

Banking → Needs Attention is where reconciliation happens. Two counters show how many transactions need review and how many already have a suggestion attached. Below them, Arvello presents one transaction at a time — date, amount, who paid or was paid, the reference — with Previous, Next and Skip controls. When the queue reaches zero you get an "All caught up" message and a brief burst of confetti, which is as excitable as accounting software ought to get.

Matching a transaction

When Arvello has a likely invoice, a "Possible match" banner shows it. Confirm records the payment, creates the journal entry and marks both as done; Not this dismisses the suggestion. If the reference matches but the amount doesn't, it's flagged as a possible partial payment — confirming records a part-payment, and a progress bar tracks what remains to allocate.

If you already recorded the payment by hand (with Record Payment on the invoice) and the same money then arrives through a bank feed or import, Arvello notices: the banner offers Link to existing payment instead of Confirm, so the movement is attached to the payment you already have rather than recorded a second time. The same guard appears in the manual matching form — selecting an invoice that carries an identical unlinked payment shows a warning with the link option, and Confirm stays available for the rare case where the movement genuinely is a separate payment of the same amount. When more than one unlinked payment of that amount is equally close to the movement's date, Arvello can't tell which one this is, so it asks you to open the invoice and link the correct payment rather than confirming a new one.

With no suggestion (or after rejecting one), the "What is this payment?" grid lists the realistic options for the money's direction — for money out: a business expense, a bank fee or other simple charge, a match to an existing expense, salary or board fees, a tax payment to EMTA, dividends, a director withdrawal, loan repayments, an equipment purchase, a refund to a client and so on; for money in: an invoice payment, owner investment, tax refund, a refund from a supplier, other income or asset sale. Each opens a short form and Arvello takes care of the journal entry. Recording a business expense opens an expense form pre-filled from the transaction that reconciles itself on save, and an invoice payment with no invoice yet can create one inline. If an expense is saved but can't be linked to the transaction, Arvello tells you — match the transaction to the saved expense instead of recording it again, finalising the expense first if it's still a draft. If the transaction still shows as Done, first use the undo on its row in Banking → All Transactions, and contact support at info@arvello.ee if that fails. If the expense did link but the rest of the transaction couldn't be finished, Arvello says so too: if part of it is still unbooked, undo it the same way and match it again. The same goes for any reconciliation that stops but can't release its transaction: Arvello says so, and the undo on its row in Banking → All Transactions frees it to reconcile again. And if a reconciliation books part of a transaction but can't release the rest, Arvello warns you in the same way: check the transaction in Banking → All Transactions and, if part of it is still unbooked, undo it and reconcile it again — contacting support at info@arvello.ee if the undo fails.

Bank Fee / Simple Charge is the shortcut for the small stuff: a monthly service charge or card fee doesn't need a supplier or an expense document. Pick the expense account (Bank Fees is preselected), optionally tick create a rule so future charges from the same counterparty categorise themselves, and the whole amount is booked straight to that account. Because there's no purchase invoice behind it, no input VAT is claimed — expenses with deductible VAT still belong on a recorded expense.

Director Withdrawal is for money a director takes out of the company account for themselves — not salary, not a dividend. It's booked to the director's loan account (1520) as money the director owes the company, rather than as an expense.

Loan Repayment reduces a loan the company owes. Choose the loan account it reduces: 2400 Loans payable (the default) or 2410 Short-term loans payable. Pick the account the loan was booked to when the money came in, whoever lent it: an Owner Investment recorded as a Shareholder Loan goes to 2410, and a loan recorded with the Loan Received income category goes to 2400. Repaying from the same account clears the loan rather than leaving it open on the balance sheet. The payment (less any bank fee in it, which goes to bank fees) is booked against the account you choose. Interest isn't split out: the whole payment reduces the loan.

Client Refund is for money going back to a customer. It lists every invoice that owes a client money back — one they paid and you then credited with a credit note, or one they overpaid — with the amount owed on each. When exactly one of them owes back the transaction's amount it is picked for you; otherwise choose the invoice. Confirming records the refund on that invoice and books it against this bank account. A refund can't be more than the invoice owes back, and a transaction dated before the payment or credit note behind the refund can't be booked as that refund. If the list is empty, the credit note has to be finalised first.

Supplier Refund is the same thing for money coming back from a supplier: a purchase invoice you paid and the supplier then credited with a credit note, or one you overpaid. It lists every purchase invoice a supplier owes money back on, with the amount, pre-selects the one owed exactly the transaction's amount, and on confirming records the refund on that invoice and books it against this bank account — clearing the payable rather than booking new income. A refund can't be more than the invoice is owed back, and a transaction dated before the payment or credit note behind the refund can't be booked as that refund. If the list is empty, the supplier's credit note has to be finalised first.

Payments that arrive net of a processor fee

Card and online payment processors — Stripe, PayPal, Montonio, Shopify Payments and the like — pay out net of their fee. Your client paid €15.00, the processor kept €1.75, and the bank shows €13.25. Recorded as it stands, that is a €13.25 part-payment that leaves the invoice open forever, and any income booked from the payout is understated by the fee.

The Processor fee deducted field under the invoice picker fixes this. Enter the fee the processor kept and Arvello settles the invoice for its full €15.00, books €1.75 to bank fees (account 5800) and lets the bank ledger net to the €13.25 that actually landed — so the invoice reads paid in full and both revenue and bank fees are stated gross. When exactly one invoice is selected and the movement falls short of what it owes, a Use shortfall link fills the field for you.

The field only appears where it makes sense: on euro inflows settling euro invoices. A shortfall on a foreign-currency invoice may be an exchange-rate difference rather than a fee, so the field stays hidden there and the foreign-currency rules apply instead. The auto-matcher never guesses a fee — a net payout is only ever matched by hand.

A payout covering several invoices

Processors usually pay out in batches. Say a €132.50 payout covers ten €15.00 invoices and the processor's payout report shows a total fee of €17.50:

Other income

The same field is available on Other income — the right choice when a payout has no invoices behind it. A €132.50 payout with a €17.50 fee is booked as €150.00 to the income account you choose and €17.50 to bank fees, with the bank ledger netting to €132.50. Bear in mind that Other income is booked without VAT: the VAT return reads invoice lines only, so if you are VAT-registered the sale itself still needs an invoice (or, later, a sales summary from a processor connection) to reach the KMD. The gross-up corrects revenue and fees; it does not create a VAT position.

Two things to know while a payout is in progress. First, a "Possible match" banner on a net payout doesn't know about the fee — confirming it records a part-payment for the amount that landed, so for a payout use the invoice picker and enter the fee instead. Second, undoing a payout depends on how far you got: once the last invoice has closed it, Undo Match in All Transactions reverses everything — the payments, the fee entry and the declared fee; while the movement is still open in the queue, use Remove all on the progress bar, which does the same. Either way the movement returns to Needs review clean.

What auto-matching does on its own

Auto-matching runs after every import and sync, and again whenever you finalise an invoice or expense. It acts without asking only when the evidence is strong:

• the invoice number appears in the payment reference or description and the amount equals exactly what's outstanding, or
• exactly one open invoice matches the amount and the counterparty's name or IBAN agrees with the invoice contact.

Payments to EMTA are recognised from the tax board's official account details and recorded as tax payments automatically, with interest and penalties routed to their own account. Auto-matched transactions carry a note saying so, and like everything else here, they can be undone. Anything with weaker evidence — an amount that matches but nothing else, a reference against a different amount — is only ever suggested, never decided for you.

Foreign currencies

Arvello keeps the books in euros, and bank accounts are euro accounts, so a transaction booked in any other currency can't be reconciled yet. When your bank sync or a CSV statement brings one in anyway, Arvello keeps it rather than throwing it away, because banks only hand over a limited stretch of history and a skipped row might never be retrievable later. It appears in All Transactions with a Foreign currency badge and "Not in euros — not supported yet" in the category column. It never enters Needs review, never gets a journal entry, and doesn't count towards the totals, reports or VAT figures. You can't match, categorise or undo it either. If the row came from a CSV import, its row menu offers Delete, which helps when the file's currency column was mapped wrongly: delete the rows, fix the mapping and import the statement again. Rows from a bank connection can't be deleted, since the bank may not send them again. For a multi-currency account such as Wise, connect or import the EUR balance; conversions that arrive in euros keep a note of the original currency on the transaction.

Invoices issued in another currency are fully supported. When a euro payment settles an invoice issued in, say, US dollars, Arvello converts the amount at the European Central Bank rate for the payment date to work out how much of the invoice was settled — and where the euros received differ from the invoice's booked value, the difference is recorded automatically as an exchange-rate gain or loss. A received amount within 2% of what's outstanding (the usual bank spread) settles the invoice in full. Because amounts in two currencies rarely match digit for digit, foreign-currency invoices are never auto-matched — a reference hit appears as a suggestion for you to confirm.

Working through a busy account

There is no tick-box bulk select — deliberately. The bulk work happens before you arrive: auto-matching clears invoice payments, EMTA payments handle themselves, and reconciliation rules absorb the repeating costs, leaving the spotlight queue for what genuinely needs a human. From All Transactions, Categorise on any pending row jumps into the queue at that transaction.

Excluding transactions

Some movements aren't business activity at all. Not business / Exclude marks a transaction as excluded: it stays visible in the history, but no journal entry is created, so it never touches the profit and loss, balance sheet or VAT return. Excluded by mistake? Undo Exclude puts it back.

Transfers between your own accounts get their own treatment, because they move money without being income or spending. Once any of your bank accounts has its own ledger account (see Connect your bank), choosing Transfer Between Accounts books the movement through a Money in transit account: the outgoing side parks the money in transit, the incoming side collects it, and once both legs are reconciled the transit account returns to zero — so each account's book balance stays truthful and reports are still untouched. This applies to both legs, even when one side is an account without its own ledger account (that leg is booked against the shared bank account instead). If both accounts are in Arvello, each side of the transfer has its own transaction: mark both legs as transfers. Companies not using per-account ledger accounts at all keep the old behaviour — the transaction is simply excluded.

The full history

Banking → All Transactions is the ledger-eye view: totals for inflows, outflows, net and unmatched, then every transaction with its status and category. Filter by status, direction or bank account, or search by text. The category column shows what each transaction became — "Invoice Payment" for matched invoices, otherwise the account it was posted to — and each row offers the relevant undo (Undo Match, Undo Categorise, Undo Exclude). The exception is a row marked Foreign currency, which has nothing to undo (see foreign currencies). An undo returns the transaction to Needs review without drama, with a fresh suggestion attached whenever one still applies. Undoing a match reverses the payment it recorded; undoing a link to a manually recorded payment only detaches the movement — the payment itself stays exactly as you recorded it. An undo also unwinds whatever else the match set up: a fixed asset created by an Equipment purchase match is removed from the asset register again, and a business trip or home office claim marked paid by the match returns to Approved, ready to be paid against the right movement. One case an undo refuses: if the asset that match created has since had depreciation or a disposal posted, removing it would leave those entries in the books with nothing to point at, so the match stays as it is and Arvello tells you why. The unreconciled counter on your dashboard links here, pre-filtered to pending.