> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tight.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Bank Transactions

> Over 40M dollars & 100k unique transactions tracked per day using Tight

## Overview

Business owners have a varying amount of accounting knowledge, and even those with accounting skills don't
have time to look at a long list of transactions. Tight's proven, holistic transaction experience is built around the
core principle of being **easy to use for business owners**, as highlighted by the following characteristics:

1. Tight highlights only the small subset of transactions that actually require the business owner's attention.
2. All transaction categories are specific to the owner's business type.
3. The ["Invisible" double-entry General Ledger](/guides/business-owners/general-ledger) is kept behind-the-scenes.
4. Business owners still receive the robust financial statements only possible with complex double-entry accounting.
5. Tight's [categorization engine](/ai/categorization/self-learning-transaction-categorization-overview) learns from
   user actions and automatically reconciles transactions across all of the business owner's data sources (e.g. invoices
   and payroll runs), eliminating work that is otherwise manual and ongoing for your users.

<Tip>Bookkeepers also receive their own separate UX, allowing Tight to provide an easy-to-use experience to business owners
*as well as* a more advanced experience for bookkeepers, including manual journal entry creation and Bank Reconciliation
UXes that ease their transition from popular legacy accounting platforms.</Tip>

## Use Cases

### Expense Tracking

While collecting money (e.g. invoicing) is typically the first step in a business owner's accounting journey, the second
step is tracking expenses, *prior* to looking for a full-blown accounting system.

#### Automatic categorization

Tight's [AI-powered categorization](/ai/categorization/self-learning-transaction-categorization-overview) automatically
categorizes all transactions, leveraging each user's [business type](/api-reference/templates/get-business-types) to
provide categorizations specific to the user's business. For example, a flooring business may have a category for "Job
Site Measurement Tools", while a creator business may have a category for "Content Props". The engine continues to learn
from the behaviors of the 1.3M+ SMBs and 3k+ bookkeepers that have used Tight to categorize their transactions.

#### Decommingling for self-employed

The vast majority of self-employed individuals commingle their business and personal finances. Tight's in-house tax
calculation engine takes into account best practices for the given business type to predict which expenses are likely to
be deductible.

For example, an Uber driver's car wash expense is classified as a "Car Wash" (business expense), but the same
transaction is treated as personal for a graphic designer.

<Tip>Bank accounts and credit cards can be specified as business or personal accounts, informing whether the
decommingling UX is applicable.</Tip>

#### Expense Reporting

Simply embed the [Expense Dashboard](/embeddable-ui/plain-js/pages/bank-transactions/expense-dashboard) to provide your
users with a complete expense tracking experience. By simply linking bank accounts through your
preferred [banking integration](/integrations/banking), they'll receive
robust [expense reporting](/guides/business-owners/financial-statements#expense-reports) while only needing to review a
small subset of transactions that Tight flags for their review.

### Invisible double-entry accounting

Every bank transaction automatically generates double entries in Tight's General Ledger, allowing the business owner to
graduate to full accounting functionality if and when they need it.

This behind-the-scenes General Ledger enables your users to access
accurate [financial statements](/guides/business-owners/financial-statements), [tax estimates](/embeddable-ui/react/income-tax-dashboard),
and [business intelligence](/embeddable-ui/react/financial-overview) by simply linking their bank accounts.

All updates to transactions automatically update the GL and [Audit Trail](/guides/bookkeepers/audit-trail).
<Tip>Tight fully supports and automates the accrual basis, cash basis, and modified cash basis methodologies.</Tip>

### Automated reconciliation

As a user's business gets more and more complex, the amount of complexity in "reconciling" their books increases. Tight
automatically matches and reconciles transactions, eliminating manual reconciliation work for your users. For example,
Tight automatically
reconciles [payments and payouts to invoices](/guides/business-owners/invoicing#automatic-payment/payout-reconciliation), [payroll runs to their withdrawals](/guides/business-owners/payroll#automatic-payroll/withdrawal-reconciliation), [payments to bills](/guides/business-owners/bills#automatic-bill-payment-reconciliation),
bank transfer deposits to withdrawals, and income/expense refunds to their originating transactions.

This automatic reconciliation ensures that every bank transaction is properly accounted for without any manual user
input. Complex transactions like payment processor payouts are automatically nested to show the underlying invoices,
fees, and net amounts in a clear, organized view, demystifying what is otherwise an arduous, manual reconciliation
process.