What this automation does
This automation takes your raw bank statement data (CSV or PDF export), reads each transaction, and assigns it to the appropriate IRS expense category: office supplies, travel, meals, utilities, professional services, insurance, and so on. It flags likely deductions, identifies potential personal expenses mixed into business accounts, and generates a categorized summary ready for your accountant.
Instead of spending hours before tax season going through transactions line by line, you upload your bank statements and get a pre-categorized spreadsheet in minutes. Your accountant reviews and adjusts instead of starting from scratch — cutting their billable hours and your costs.
Tools you need
- Bank statement exports: CSV or PDF exports from your business bank account and credit cards
- OpenAI API (GPT-4): Categorizes transactions by reading descriptions and amounts ($0.01-0.03 per batch of 50 transactions)
- Google Sheets + Apps Script: Import, process, and output the categorized expenses — free and simple
How to set it up
Step 1: Export your bank statements as CSV files. Most banks offer this for any date range. Import the CSV into Google Sheets — you need at minimum: date, description, amount. Some banks also include category and merchant name.
Step 2: Create a Google Apps Script that reads batches of 50 transactions at a time and sends them to OpenAI. The system prompt should include IRS expense categories with examples, your business type (so AI knows context), and instructions to flag ambiguous transactions.
Step 3: The AI returns categorized transactions with: IRS category, confidence score, and notes (like 'possible personal expense' or 'may qualify for home office deduction'). Write the results back to the spreadsheet in new columns.
Step 4: Share the categorized spreadsheet with your accountant. Flag items with low confidence scores for their review. Over time, build a 'rules' list of recurring transactions that should always be categorized the same way to improve accuracy.
Cost breakdown
| Item | Cost | Notes |
|---|---|---|
| Google Apps Script | $0 | Free with Google Workspace |
| OpenAI API | $5-$15/mo | ~$0.02 per batch of 50 transactions |
| Google Sheets | $0 | Your working spreadsheet |
| Setup time | 30-45 min | One-time per bank account format |
| Total monthly | $5-$15/mo | Saves 8+ hours per quarter of manual categorization |
Frequently asked questions
The AI categorization is a starting point, not a final answer. It gets 85-90% of transactions right, which means your accountant still needs to review. The value is in reducing a 10-hour task to a 2-hour review. Always have a qualified tax professional review before filing.
Yes. QuickBooks and Xero have APIs that let you pull transactions directly. Instead of CSV import, connect to the accounting API via Make or n8n. You can also write the categorized data back into QuickBooks/Xero, which makes reconciliation even faster.