AI Bill Categorization

AI-Powered Expense Categorization

When recording bills, AI can analyze line items and suggest the appropriate expense accounts from your Chart of Accounts, creating balanced journal entries automatically.

How It Works

1. Enter bill details: Add vendor, date, amount, and line items
2. Click "Categorize with AI": AI analyzes the bill content
3. Review suggestions: See the suggested expense accounts and journal entry
4. Accept or modify: Use the suggestions as-is or adjust before saving

What AI Analyzes

The AI looks at:

• Line item descriptions: What was purchased
• HSN/SAC codes: If provided on the bill
• Vendor name: Past categorization patterns
• Amount breakdown: Including GST components

Journal Entry Generation

AI creates complete double-entry journal entries:

• Debit: Appropriate expense account(s)
• Credit: Accounts Payable or relevant liability account
• GST lines: Separate CGST/SGST (intra-state) or IGST (inter-state) entries

Example for a ₹11,800 software subscription (18% GST):

Debit:  Software Expenses      ₹10,000
Debit:  CGST Input Credit         ₹900
Debit:  SGST Input Credit         ₹900
Credit: Accounts Payable       ₹11,800

Confidence Scoring

Each suggestion includes a confidence score (0-100%):

• High confidence (80%+): AI is confident in the categorization
• Lower confidence: Review carefully, may need adjustment

If confidence is below 80%, consider reviewing the suggestion manually.

New Account Suggestions

If AI can't find a matching account in your Chart of Accounts, it may suggest creating a new account with:

• Suggested account name and code
• Account type (expense, asset, etc.)
• Default GST rate if applicable
• HSN/SAC code if relevant

You can accept the suggestion to create the account or choose an existing one.

Requirements

• AI access required: Owner or team member with granted AI access
• Chart of Accounts setup: Have your accounts configured for best results
• Clear line items: More detailed descriptions give better results

Tips

• Include HSN/SAC codes when available for more accurate categorization
• Review AI suggestions before accepting, especially for new vendors
• The AI learns from your Chart of Accounts structure
• Keep your Chart of Accounts organized for better matching