Accounting

The Accounting app is where day-to-day bookkeeping happens: invoices, quotes, bills, receipts, counterparties, products, payments, bank feeds, and the reports that come out of them (profit & loss, balance sheet, cash flow, VAT). It's built around one shared ledger — every transaction that reaches your books flows through the same underlying double-entry model, whichever screen you booked it from.

Key concepts

• Legal entities — your books are organized per legal entity (a company or a sole trader/individual), not just per organization. Everything you record — invoices, bank transactions, reports — belongs to one legal entity at a time; switch entities from the entity selector if your organization has more than one.
• The transaction inbox — connected bank transactions land in an inbox rather than being booked blind. Each line gets AI-suggested handling (categorize, match to an invoice/bill, treat as a transfer, split across categories, or ask a question), which you review and confirm or adjust.
• Autonomy — how much of that suggested handling books itself automatically, versus waiting for your review, is a per-entity setting your firm controls.
• Nothing is ever erased — the ledger is append-only. You never edit a posted entry: a correction posts an equal and opposite entry, and a correction to a period you have already reported is recorded as a restatement, so both the original and the corrected figures stay reproducible. See Corrections & audit history.
• Client money is kept apart — if you hold money on behalf of clients, those accounts are designated as client money and stay out of your own income and expenses. See Client money.

In this section

• Corrections & audit history — reversals, credit notes, restatements, and closing or reopening a period.
• VAT — how the nine boxes come from your ledger, the Flat Rate Scheme, partial exemption, and what filing posts.
• Foreign currency — functional currency, where exchange rates come from, and automatic FX gains and losses.
• Reports & frozen figures — live reports, viewing a report as it stood, and renaming versus reclassifying an account.
• QuickBooks & Xero sync — imported documents, and why "Paid" follows your ledger.
• Client money — designated accounts, client ledgers and three-way reconciliation.

How do I…

…connect a bank account?

Bank accounts connect via open banking from the Banking area of the app. Once connected, new transactions arrive in the inbox automatically — there's no manual CSV import required for a connected account (though you can still upload bank statements or receipts directly if you need to).

…review and categorize bank transactions?

Open the transaction inbox. Each line shows a suggested action; use the decision panel to match it to an existing invoice or bill, categorize it to an account, mark it as a transfer between your own accounts, split it across several categories, or send a question if you're not sure what it is. Confirmed lines post as journal entries; nothing books without going through this flow unless your organization has turned on more automation for high-confidence suggestions.

…create an invoice or quote?

From the Invoices or Quotes area, add a new one with the counterparty, line items, and tax treatment — quotes convert to invoices once accepted. Both support your organization's branding on the printed/PDF version.

…see my reports?

Profit & loss, balance sheet, cash flow, and VAT reports are available from the Reports area, computed live off your posted transactions for any date range and legal entity. You can also pin the trial balance or statutory accounts to a past moment — see Reports & frozen figures.

…file VAT (or other returns) with HMRC?

VAT and other HMRC filings are prepared from within the accounting app and submitted through ac-co.ai's HMRC integration — look for the HMRC/filing area for your legal entity's outstanding obligations. VAT covers how the return is built, the Flat Rate Scheme, and the partial-exemption check that runs before you file.

…fix something I booked wrongly?

Nothing is edited in place. Correct a journal entry and ac-co.ai posts the opposite entry alongside it; correct an issued invoice with a credit note, or void and reissue it; correct a period you have already reported with a restatement. Corrections & audit history walks through each case.

…invoice in a foreign currency?

Raise the document in the customer's currency — your books stay in your own. The exchange rate is fixed when you issue the document, and the difference on settlement posts as an exchange gain or loss automatically. See Foreign currency.

…get help if a transaction looks wrong?

Every category or match decision can be undone, and rejecting a suggestion teaches the system not to repeat it for that counterparty. If you're stuck, your firm's bookkeeper or accountant workspace has visibility into the same inbox.