AI bookkeeping
Software that reads your bank statements and sorts each transaction into your books. Here's what it does well, where it slips, and how Spark Books handles the difference.
What AI bookkeeping is
Bookkeeping is mostly sorting. Every transaction on your bank and card statements has to go to the right account, with the sales tax split out, so your profit and loss, balance sheet and tax returns come out right.
AI bookkeeping software does that sorting for you. It reads each transaction, decides where it belongs and records it in your books. Done properly, those are real double-entry books with a trial balance and a ledger, not a list of categories.
What it gets right
The routine work, which is most of it.
The regulars
Rent, phone, fuel, software, the same suppliers every month. Once it's clear what a payee is, the rest of their transactions follow.
GST/HST
Splitting the tax out of each purchase and sale, so the figures for your return add up from the books rather than from a separate spreadsheet.
Transfers
A payment from your chequing account to your Visa is a transfer, not spending. Matching both sides keeps it out of your expenses.
Receipts
Reading a photo of a receipt and finding the card or bank transaction it paid for.
What it gets wrong
Anything the statement doesn’t say. Software can’t know what only you know.
Mixed-use stores
A Costco or Amazon charge could be stock, office supplies or groceries for home. The statement line looks the same either way.
Vague descriptions
An e-transfer with a first name and no memo, or a cheque number. Nothing on the statement says what it was for.
Your own money
Money you put into the business, or took out, can look like sales or expenses unless someone who knows says otherwise.
One-offs
A new piece of equipment, a loan payment, a refund. Rare items are where a confident guess is most likely to be wrong.
Why Spark asks instead of guessing
A wrong guess you never see ends up in your GST/HST return and your year-end. So when Spark isn’t sure, it doesn’t decide quietly. It puts the transaction on a short list with its best guess filled in.
You check it and tap save. Tick “always” and Spark makes a rule, like “always put Home Depot here”, so it won’t ask about that store again.
Everything else sorts itself, into a Canadian chart of accounts set up for a corporation or a sole proprietor, with the GST/HST split out.
What Spark Books does with it
- Double-entry books: P&L, balance sheet, trial balance and ledger, on a cash or accrual basis.
- GST/HST return figures, regular or quick method, with the date each return is due. You or your accountant file it with the CRA.
- Invoices in your business name, and bills, with payments matched to them automatically.
- A 13-week cash forecast.
- A year-end package mapped to GIFI for corporations or T2125 for sole proprietors.
It’s free. It doesn’t connect to your bank yet: you upload statements from your bank’s website. More about Spark Books.
Or have a person do it
If you’d rather not answer the questions yourself, Spark’s Bookkeeping plan is $350 a month. A Spark bookkeeper, working for us from South Africa, sorts every transaction, reconciles your accounts and closes each month. They see only your books, and only after you’ve agreed. You’re asked only what they can’t know.
Questions
- What is AI bookkeeping?
- Software that reads your business's bank and card transactions and records each one in your books: which account it belongs to, how much GST/HST was in it, and whether it was a transfer between your own accounts. Good AI bookkeeping still keeps proper double-entry books, so your accountant can rely on them.
- Is there free AI bookkeeping software?
- Yes. Spark Books is free for Canadian small businesses outside Quebec, with no card. You upload your statements, Spark sorts each transaction into a Canadian chart of accounts with GST/HST split out, and asks you about the ones it can't tell.
- Can AI bookkeeping replace a bookkeeper?
- For many small businesses it does most of the routine work. It can't know things only you know, like whether a purchase was for the business. That's why Spark asks. If you'd rather a person handled it, Spark's Bookkeeping plan is $350 a month with a Spark bookkeeper.
- Why does Spark ask me questions instead of just deciding?
- Because a wrong guess you never see ends up in your tax return. When Spark isn't sure, it shows you its best guess and asks. You check it, tap save, and tick “always” if you want every transaction like it handled the same way.
- Does Spark connect to my bank?
- Not yet. You download statements from your bank's website as CSV, OFX/QFX/QBO or PDF and upload them. Spark reads exports from RBC, TD, BMO, Scotiabank, CIBC, National Bank, Tangerine and Amex.
- Who is the human bookkeeper?
- On the Bookkeeping plan, a Spark bookkeeper working for us from South Africa. They see only your books, never a loan application, and only after you've agreed to it.
More comparisons
Free software
- Spark BooksEverything Spark Books does, and the two plans.
- Free bookkeeping software in CanadaWhat's actually free, and the catch with each.
- Free accounting software in CanadaWhat it has to do for the CRA, and when you still need an accountant.
Switching from
- A free QuickBooks alternativeWhat Spark does and doesn't do next to QuickBooks Online.
- A free Xero alternativeHow Spark compares with Xero for a Canadian business.
- A Wave alternativeWhat changed on Wave's free plan, and your options.
- A free FreshBooks alternativeFreshBooks' Canadian plans next to Spark Books.
Head to head
- QuickBooks Online vs XeroPlans, prices, GST/HST and payroll in Canada.
- Wave vs QuickBooks OnlineFree with manual work, or paid with a bank feed.
Start your books today
Free, with no card. Set up in about two minutes, and upload your first statement right away.