10 min read | Updated 9 May 2026

How to Categorise Transactions in Pandle

Q: How do I categorise transactions in Pandle?

In Pandle, go to Banking and click into the relevant bank account. Each unreconciled bank line shows in the list. Click on a line, then choose the contact (customer or supplier), pick the category from the chart of accounts (Sales, Office Supplies, Travel, etc.), set the VAT code (NV, ST 20%, RR 5%, EX, ZR), and click Save. Auto Coding rules can be created from any categorised transaction by clicking the lightning-bolt icon: Pandle then auto-categorises future matching transactions.

Q: What VAT codes does Pandle use?

Pandle uses five primary UK VAT codes: NV (No VAT, outside the scope, e.g. wages and dividends), ST (Standard rate 20%), RR (Reduced rate 5%, for energy-saving materials and similar), EX (Exempt, for insurance and education), and ZR (Zero rated, for books, food, and public transport). The MTD VAT return generates directly from these codes against the chart of accounts.

Q: Is Pandle free?

Pandle has a free tier (Pandle) for sole traders and small businesses, and a paid tier (Pandle Pro) that adds features like multi-user access, advanced reporting, and more bank feeds. Both tiers are MTD for VAT compatible. The free tier is one of the few genuinely useful free UK accounting platforms; the paid tier is still cheaper than Xero or QuickBooks at equivalent feature levels.

A focused guide to Pandle’s bookkeeping screen, Auto Coding rules, UK VAT codes (NV / ST / RR / EX / ZR), and the volume threshold where pattern-learning becomes the right move.

By Jack Whitehead, AATQB

Quick answer

In Pandle, go to Banking and click into the relevant bank account. For each unreconciled bank line: click the line, choose the contact, pick the category from the chart of accounts (Sales, Office Supplies, Travel, etc.), set the VAT code (NV No VAT, ST Standard 20%, RR Reduced 5%, EX Exempt, ZR Zero rated), and click Save. Use Auto Coding (the lightning-bolt icon) to turn a coded transaction into a rule that auto-categorises future matching lines. Pandle has a free tier and is fully MTD for VAT compatible. CodeIQ’s deepest platform integration is with Pandle: connect via API, read the chart of accounts and VAT codes, run the eight-phase coding pipeline, and post coded transactions back to Pandle for review.

Why Pandle is different (and surprisingly capable)

Pandle is the UK’s most cost-effective serious accounting platform. The free tier is genuinely usable for sole traders and very small businesses, the paid tier (Pandle Pro) is significantly cheaper than Xero or QuickBooks at equivalent feature levels, and the entire platform is built around UK bookkeeping conventions: HMRC integration, MTD for VAT compliance, and a chart of accounts that maps directly to common UK reporting categories.

For categorisation specifically, Pandle uses a five-code VAT system that is tighter than Sage’s ten-plus T-codes and easier to learn. The bookkeeping screen is fast and uncluttered. Auto Coding handles repetitive entries adequately. Where Pandle starts to feel limiting is at higher volumes or in practices managing many clients: that is where pattern-learning starts to earn its keep.

The Banking screen workflow

Where everything happens

Open Pandle. Go to Banking in the top navigation. The Banking dashboard lists each linked bank account. Click into the bank account you want to work on. The transaction list shows each line with a status indicator: green for reconciled, amber for needing categorisation, red for errors.

What “doing it properly” looks like per line

Click the unmatched line

A panel opens with the bank narrative, reference, date, and amount. Pandle suggests a category if the description matches a previous transaction or an Auto Coding rule.

Choose the entry type

Pandle offers: Money In (income or refund), Money Out (expense or payment), Customer Receipt (payment for a Pandle invoice), Supplier Payment (payment for a Pandle bill), or Bank Transfer (movement between your accounts).

Pick the contact

Type the contact name. Pandle filters as you type. Create a new contact inline if needed. Keep contact naming consistent.

Choose the category

Select from the chart of accounts. Pandle’s default UK chart is sensible and short: about 40-50 categories covering most SME use cases. Custom categories can be added in Settings » Categories.

Set the VAT code

Pick from NV, ST, RR, EX, ZR. Pandle pre-fills based on the category, but always check.

Save and optionally Auto-Code

Click Save to post the transaction and reconcile the bank line. Click the lightning-bolt icon if you want to convert the categorisation into an Auto Coding rule for future matching transactions.

UK VAT codes in Pandle: NV, ST, RR, EX, ZR

Pandle’s VAT code naming is the cleanest of any major UK accounting platform. Five letters cover the entire system.

Code	Meaning	VAT return effect
NV	No VAT (outside the scope)	Excluded from VAT return entirely. Wages, dividends, MOT fees, internal transfers.
ST	Standard rate 20%	Box 1 (output) or Box 4 (input), Box 6/7 net. Most UK sales and purchases.
RR	Reduced rate 5%	Box 1 or Box 4, Box 6/7 net. Energy-saving materials, women’s sanitary, children’s car seats.
EX	Exempt	Box 6 or Box 7 only (no VAT). Insurance, postage, education, finance services.
ZR	Zero rated	Box 6 or Box 7 only (no VAT, but in the system). Books, food, public transport.

NV vs EX: the same trap as Sage T9 vs T2

NV means outside the VAT system entirely; the transaction does not appear on the VAT return. EX means exempt: still in the system, appears in Box 7 (net purchases) but contributes no VAT. Use NV for wages, dividends, drawings; use EX for insurance, postage, financial services.

The chart of accounts: simpler than Sage

Pandle ships with a clean default UK chart of accounts: Sales, Direct Costs, Overheads, Salaries, Bank Charges, etc. About 40-50 categories cover most SME bookkeeping needs. Custom categories can be added in Settings » Categories; nothing is rigidly fixed by code, unlike Sage’s 4000s/5000s/7000s structure.

The accountant’s shortcut

If you are migrating a client from Sage to Pandle, you can largely keep the same category structure: just add custom Pandle categories that mirror your Sage 4000-7900 codes. The MTD VAT return on either platform reads the same way. Just make sure the VAT code mapping is consistent (Sage T1 = Pandle ST, T0 = ZR, T2 = EX, T9 = NV, T5 = RR).

Auto Coding: Pandle’s bank-rule equivalent

Pandle’s automation is called Auto Coding. After categorising a transaction, click the lightning-bolt icon in the action menu. Pandle proposes a rule based on the transaction description; you can tweak the conditions before saving.

Each Auto Coding rule has:

Match condition: bank narrative contains a phrase, equals exactly, or starts with
Contact: auto-applied on match
Category and VAT code: auto-applied on match
Confirmation requirement: auto-post or hold for review

Where Auto Coding works

Rent and rates direct debits with consistent narrative
Subscriptions and licence fees
Card processor settlements
Loan repayments
Recurring supplier invoices that always read the same way

Where it falls short

No multi-line splits
No transfer detection (matched-amount internal moves)
No invoice matching (payment to outstanding bill)
One rule per merchant; description variations need separate rules

Pandle Free vs Pandle Pro

Feature	Pandle Free	Pandle Pro
Cost	£0/month	From around £7/month per company (verify current pricing)
Bookkeeping	Yes	Yes
Bank feeds	Up to 1 connected account	Multiple connected accounts
Invoicing & bills	Yes	Yes, with templates and recurring billing
VAT returns (MTD)	Yes	Yes
Multi-user	Limited	Yes, with roles and permissions
Reporting	Standard P&L, BS, debtors, creditors	Plus management accounts, budgets, cash flow forecasting
Bookkeeper access	Yes	Yes

When manual coding stops working

Pandle’s manual workflow is fast for low-to-medium volumes. The threshold where it starts to bottleneck is around 200 to 300 transactions per month per company, especially in practices managing 10+ Pandle clients.

Pandle’s automation is lighter than Xero or QuickBooks. Auto Coding handles a meaningful chunk of recurring entries, but it does not detect transfers, match invoices, or classify VAT contextually. Pattern-learning automation closes that gap.

Pattern-learning automation: CodeIQ

CodeIQ has its deepest integration with Pandle. The integration covers everything that the Pandle API exposes: chart of accounts, VAT codes, contacts, outstanding invoices, bank transactions, and posting back coded transactions as drafts.

The eight-phase pipeline applied to Pandle

Transfer detection » matched-amount internal moves between bank accounts get posted as transfers, not as expenses or income.
Invoice matching » bank receipts and payments are linked to outstanding Pandle invoices and bills, with adjustments for partial payments and bank charges.
Historical pattern » CodeIQ reads your existing Pandle GL history. Merchants you have categorised before get auto-categorised the same way.
Universal pattern » anonymised crowd-sourced patterns from thousands of UK practices.
MCC category » merchant category codes provide a category floor where present.
Semantic analysis » for transactions that fall through the rule-based phases, an embedding model classifies the transaction against your Pandle category names.
User learning » corrections you make stick: the next session applies them as overrides.
VAT classification » CodeIQ already uses Pandle’s NV/ST/RR/EX/ZR codes natively (its universal VAT codes match Pandle’s, by design). No mapping layer is needed for Pandle.

Coded results post back to Pandle as draft transactions for review. Same audit trail. Same MTD VAT compliance. Materially less time at the keyboard.

Try CodeIQ free with Pandle

Connect Pandle via API, upload a bank statement, and see how the deepest CodeIQ integration compares to clicking through Banking. Two minutes per client, not two hours.

Try CodeIQ free

Frequently asked questions

How do I categorise transactions in Pandle?

Go to Banking, click into the bank account, and click each unreconciled line. Choose Money In or Money Out, pick the contact, choose the category from the chart of accounts, set the VAT code (NV, ST, RR, EX, ZR), and click Save. Use the lightning-bolt icon to create an Auto Coding rule from a categorised transaction.

What VAT codes does Pandle use?

NV (No VAT, outside the scope), ST (Standard 20%), RR (Reduced 5%), EX (Exempt), ZR (Zero rated). MTD VAT returns generate directly from these per-line codes.

Is Pandle free?

Pandle has a free tier (Pandle) suitable for sole traders and small businesses. A paid tier (Pandle Pro) adds multi-user access, advanced reporting, recurring billing, and more bank feeds. Both tiers are MTD for VAT compatible.

What is Pandle Auto Coding?

Auto Coding is Pandle’s bank rule equivalent. After categorising a transaction, click the lightning bolt icon to convert that categorisation into a rule. Future bank lines matching the description will be auto-categorised with the same contact, account, and VAT code.

Can I automate transaction categorisation in Pandle?

Yes, partially through Auto Coding rules and fully through pattern-learning tools. CodeIQ has the deepest integration of any pattern-learning tool with Pandle: it connects via API, reads the chart of accounts and VAT codes, learns from your general ledger history, and codes transactions through an eight-phase pipeline before posting back as draft transactions for review.