Bookkeeping, cash coding and CodeIQ, answered.

Bookkeeping is the day-to-day recording of a business's financial transactions: sales and purchases, money in and out of the bank, payroll and VAT. Each transaction is recorded in the right account in the ledger, so the books always show what the business has earned, spent, owns and owes. For most small businesses today that means coding bank lines in accounting software such as Xero, QuickBooks, Sage or Pandle rather than writing up books by hand. For sole traders and the self-employed, the same records feed the Self Assessment return and, under Making Tax Digital, the quarterly updates.

Bookkeeping records the transactions; accounting uses them. The bookkeeper codes each bank line, raises and matches invoices, reconciles the bank and keeps the VAT records straight. The accountant then adjusts the books at the period end, prepares the accounts and tax returns, and advises on what the numbers mean.

The key differences between accounting and bookkeeping are scope and judgement: bookkeeping is routine and rule-based, accounting needs professional judgement and, for statutory accounts and tax, filing with HMRC and Companies House. That routine, rule-based part is exactly what software can automate.

No. Anyone in the UK can call themselves a bookkeeper or an accountant, but a qualified accountant (ACCA, ICAEW, ICAS or CIMA, for example) has passed professional exams and works under that body's rules, and an AAT or ICB member is qualified in bookkeeping. In a practice the accountant is usually the more senior role: bookkeepers keep the records through the year, and accountants review them, prepare the accounts and advise.

The usual bookkeeping duties and responsibilities are: coding bank transactions, entering and matching sales and purchase invoices, reconciling the bank and credit cards, keeping the sales and purchase ledgers, preparing VAT figures, running payroll and keeping records for the accountant. Of those, coding bank lines, reading invoices and receipts, matching payments to invoices, spotting transfers and setting VAT codes are the repetitive parts that CodeIQ automates. Reviewing the result, chasing the client and making judgement calls stay with a person.

They answer different problems. Outsourcing bookkeeping moves the whole job, judgement included, to someone else for a monthly fee. Automating it keeps the work in-house but takes the keying out: software codes the routine lines and leaves you the exceptions. Practices often combine the two, using automation to look after more clients without more keying. If the books are simple and recurring, automation covers most of the work; if they need regular judgement, a bookkeeper with good software is the strongest combination.

Every transaction is recorded twice, as a debit in one account and an equal credit in another, so the books always balance. Paying a £120 phone bill from the bank, for a VAT-registered business, debits telephone expenses £100 and VAT £20 and credits the bank £120. Accounting software makes the second entry for you; CodeIQ chooses the account for the first. The full explanation, with worked examples, is in double-entry bookkeeping explained.

Give every bank line an account from the chart of accounts, a VAT treatment and, where it helps, a contact. In practice: first pull out transfers between the business's own accounts and payments that settle invoices, because those are not income or expenses; then code the recurring suppliers the way they were coded last time; then work through the one-offs, checking receipts where the description is unclear; and finally reconcile so the coded lines agree to the statement.

CodeIQ follows the same order automatically through its eight phases and leaves you only the lines it is unsure of.

Cash coding is coding many bank lines at once in a grid, rather than one at a time: each row gets its account and tax rate, and the batch is saved together. The account codes used this way are sometimes called cash codes. In Xero, cash coding reconciles multiple statement lines at once in a spreadsheet-style view, on the Cash coding tab of a bank account. It is fast for high-volume accounts such as company credit cards, where there are no invoices to match.

CodeIQ works the same way at a larger scale: it pre-codes the whole statement, you review it as one batch, and the approved batch is posted to the platform.

First check the plan: Xero's UK site lists cash coding on Grow, Comprehensive and Ultimate. To use it, go to Accounting, then Bank accounts, choose the account and open the Cash coding tab. If the tab is still missing on one of those plans, your user role may not include it, so ask whoever manages users in the organisation. Our guide to categorising transactions in Xero covers cash coding, bank rules and find and recode.

Bank rules are exact instructions: if the description contains a word, use this account. They work for a short list of suppliers that never change, but they have to be written and maintained for each client, they break when a description changes, and they cannot handle a payment that should match an invoice. AI coding learns from the client's history and from patterns across many businesses, so it codes new and changing suppliers without setup. The two work together: rules for the few lines you want fixed, AI for everything else. We stress-tested Xero bank rules to see where they stop.

Yes, and it is one of the parts of bookkeeping AI does best. CodeIQ codes about 95% of recurring merchants and 80 to 85% of ones it has not seen before exactly as you would. Anything it is not sure of waits for you rather than being guessed, and nothing posts to the books until you approve the batch.

Transfer detection is the first of the eight phases. CodeIQ looks for equal and opposite amounts across the client's accounts within a date window and pairs them before anything can code them as income or expense. Paired transfers are posted as transfers between the two bank accounts.

Invoice matching is phase 2. CodeIQ checks each bank line against the client's outstanding sales and purchase invoices on the platform, by amount, reference and contact, handling part-payments, overpayments and small differences such as a bank charge. A match is posted as a payment against that invoice, so the invoice is marked paid. In Xero, the API does not let any software mark invoice payments as reconciled, so those arrive as suggested matches that need one click in Xero.

CodeIQ is automated bookkeeping for accountants, bookkeepers and the businesses they look after. It takes a client's bank statement, codes every line with an account, a VAT treatment and, on QuickBooks and Xero, a contact through an eight-phase pipeline, reads purchase and sales invoices, turns marketplace statements into journals, and posts the approved batch to Xero, QuickBooks, Sage or Pandle, or into IQ Books, our own ledger, with nothing to connect.

Every line runs through eight phases in order, and the phase that settles it is recorded against the line: 1 transfer detection; 2 invoice matching; 3 the client's own coding history; 4 crowd-sourced merchant patterns; 5 card category codes; 6 semantic analysis of the description; 7 your past corrections, applied last so your judgement wins; 8 VAT classification. On QuickBooks and Xero, extra platform passes also match contacts and tracking categories (classes in QuickBooks); they are not extra phases.

Two ways. When a session starts, it reads the client's general ledger history from the platform and learns how each supplier has been coded before. And every correction you make is remembered and applied in phase 7 on the next session, so your choices override the patterns from then on. Your corrections stay with your own clients.

A crowd-sourced database of merchant patterns, so common suppliers are coded correctly on first sight for a brand new client with no history. Patterns are contributed only by users who switch sharing on, are stripped of personal data, cleaned and approved before they are added, and never include amounts, dates, balances or account numbers.

Phase 6 reads the bank description for meaning rather than exact words, using an embedding model run on our own servers, and compares it with the account names in the client's chart of accounts, enriched with the merchants usually coded to each one. It catches suppliers that no pattern knows yet, and it costs nothing extra per line.

CodeIQ codes about 95% of recurring merchants and 80 to 85% of ones it has not seen before exactly as you would. Each line carries a confidence score and the phase that produced it; low-confidence lines go to RiQ, the suite's AI, for a second look and then to you.

Nothing posts without your approval, so a wrong suggestion is corrected in the review before it reaches the books. Filter to the low-confidence lines first, change the account or VAT code, and CodeIQ remembers the correction for that client next time. Coding a line yourself is always free.

Xero, QuickBooks Online, Sage and Pandle, each connected by OAuth 2.0. CodeIQ fetches the chart of accounts, the VAT codes and the outstanding invoices from the platform, and posts the approved batch back to it. Pandle has the deepest integration. It also posts into IQ Books, our own ledger, with nothing to connect.

Bank statements as CSV, Excel or PDF, or a photo of a paper statement; anything other than a CSV is converted to CSV first. Date, description and amount columns are detected for you, with a manual override. Invoices and receipts as PDF, PNG or JPG, up to 10MB each. Marketplace statements as CSV.

Yes. Drag in purchase or sales invoices as PDFs, PNGs or JPGs, a batch at a time. RiQ Vision reads the supplier, date, invoice number, net, VAT and total, currency, line items and a suggested account, with a confidence score on the supplier, invoice number, date and total, and flags anything it is unsure of. The invoice is created on your platform and matched to its bank payment in the invoice-matching phase. Syncing an invoice uses 10 credits.

Yes. On the Merchant Accounts tab, mark the bank account that receives the payouts and upload the statement. eBay, Amazon and PayPal statements are parsed by built-in parsers into sales, fees, shipping, refunds and tax, with the payouts left for the bank side. Statements from Stripe, Etsy, Square, Shopify and other platforms go through RiQ-assisted mapping, where RiQ proposes what each column is and you confirm it; there is no dedicated Shopify parser.

Up to ten client sessions in one browser window; once there are more than five, four stay as tabs and the rest sit behind a '+N more' tab. Each session keeps its own chart of accounts, VAT codes and platform connection, and processing runs in the background with live progress while you review another client.

Partly, because of a Xero limit. In the Posting Center, tell CodeIQ whether the account has a bank feed: with a feed, lines arrive in Xero as suggested matches; without one, standard bank transactions post reconciled. Xero's API does not let any software mark transfers or invoice payments as reconciled, so those always need one click in Xero. If you are weighing Xero's own automation, see CodeIQ vs Xero JAX.

On ReconcileIQ credits, shared across the suite. Automatic coding by CodeIQ uses 4 credits a bank line; coding a line yourself is always free. A PDF or photo statement is converted to CSV first, at 2 credits a line (minimum 10). Syncing an invoice read by OCR uses 10 credits. The plans are Starter at £5 a month (5,000 credits), Accountant at £15 (25,000), and for practices Practice Essential at £78 (50,000), Practice Pro at £158 (150,000) and Enterprise at £398 (500,000). Monthly credits renew each billing period and do not carry over. Bonus credit packs of 1,250, 5,000, 12,500 or 37,500 credits never expire. Annual billing costs less, and there is no per-client or per-seat fee.

Yes. The free tier is permanent, not a trial: no card, and 1,000 one-off credits, enough for automatic coding of 250 bank lines. Email sign-ups confirm their address first, and there is one free allowance per person.

On a paid plan you choose in the CodeIQ settings. With overage billing on, processing carries on, up to a monthly spending cap you set, and the extra credits are charged straight away at your plan's overage rate, for current plans: £0.002 a credit on Starter, £0.0015 on Accountant, £0.002 on Practice Essential, £0.0016 on Practice Pro and £0.001 on Enterprise (with a £0.50 minimum charge; anything over what you used is added as bonus credits). With it off, processing stops until you buy a credit top-up or upgrade. Coding by hand never needs credits.

Each platform is connected by OAuth 2.0, so we never see a password and you can revoke access at any time. Data travels over HTTPS. A CodeIQ session and the transactions in it are deleted automatically 24 hours after the session starts, and the semantic model runs on our own servers. See the security details.

Your own coding corrections are kept, so they apply to that client next time. Posting history is off by default. Turn it on to keep a record of posting runs so you can see and fix rejections: the run figures are kept for 24 months, the transaction detail for 30 days, and unresolved failures until they are resolved. Without it, the history clears with the session, and everything in a session is deleted 24 hours after it starts.

It is off unless you switch it on in the CodeIQ settings, and you can turn it off again at any time without affecting your access. When it is on, only anonymised merchant patterns are shared, reviewed before they are added, and never names, addresses, amounts, dates, balances, account numbers or anything that identifies the client.

No. CodeIQ runs in the browser, on any recent version of Chrome, Edge, Firefox or Safari, with nothing to install or update.