How AI Works in Digits

Learn how Digits uses AI to automatically book, categorize, and review transactions—so you only step in when human judgment is actually needed.

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Welcome to Digits!

If your Checklist looks busy right after you connect data, you didn’t do anything wrong — Digits is being intentionally conservative while it learns your business. Confirm what’s right, correct what isn’t, and Digits applies that learning immediately, so the Checklist shrinks over time.

We’ll walk through how it all works below.

Overview

Digits is an AI-native accounting platform, designed to automate routine bookkeeping and surface only the items that need human judgment—without sacrificing accuracy, control, or auditability.

Unlike legacy systems where AI is layered onto an existing workflow, Digits’ AI is embedded directly into the general ledger itself. This foundation—called the Agentic General Ledger™—allows Digits to continuously book, categorize, reconcile, and review transactions as they come in, so you spend less time on repetitive bookkeeping and more time on exceptions and decisions.

Throughout the Help Center, the ✨ sparkle icon highlights features powered by Digits AI.

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Where Digits AI Shows Up

Digits AI primarily works across five places in the product:

• Ledger (categorization, matching, splitting, review)
• Checklist (exception queue for items needing attention)
• Reconciliations (statement matching + exception handling)
• Vault (extraction + routing into the right workflow)
• Ask Digits (search + navigation + analysis)

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What Does Digits AI Do Automatically?

✨ Automatic Transaction Categorization

As transactions sync from banks, cards, payroll, and connected tools, Digits automatically:

• Identifies the likely party (vendor/customer/payroll source)
• Selects a category/account in your chart of accounts (Category Manager)
• Applies what it has learned from your prior decisions
• Routes uncertain items to the Checklist instead of guessing

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✨ Continuous Reconciliation (Statement-Aware)

When statement data is available (from a connected account or an uploaded PDF), Digits automatically:

• Matches statement lines to Ledger activity
• Drafts the reconciliation
• Surfaces exceptions like missing, duplicate, or unmatched items
• Keeps reconciliation status current as items are confirmed or resolved

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✨ Document Extraction and Workflow Routing

Digits can ingest documents like:

• Bank/credit card statements
• Bills and invoices
• Receipts
• Bank check images (where available)

Digits identifies the document type and routes it into the appropriate workflow (Vault, Reconciliations, Bills, etc.).

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✨ Ask Digits Search and Workflow Shortcuts

Ask Digits helps you:

• Search transactions, vendors, categories, and balances
• Jump into workflows quickly (Ledger, Reconciliations, Vault)
• Ask questions in natural language

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How Digits Learns & Training Your AI

When you connect your data, Digits starts with high baseline accuracy, but it doesn’t know your unique business context... yet.

Expect the first 1–2 months to need the most review. That’s normal. Digits is learning your vendors, naming quirks, and category preferences.

Digits automates 95% of your bookkeeping, so most transactions never require your attention. Anything that needs a human eye is automatically routed to your Checklist → Book for review.

Think of the Book in Checklist as your training queue, not your permanent workload. Every time you confirm or correct a transaction, Digits applies that feedback immediately to similar future transactions, so the system gets smarter while your review list gets quieter.

Most customers see noticeable improvement by month 2–3, and accuracy continues to improve over time.

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How Automatic Categorization Works

Digits categorizes a transaction when it appears in your Ledger (from a bank connection or an uploaded bank statement/CSV file). Then, ✨ Digits evaluates context such as:

• Merchant text/transaction description
• Transaction date
• Historical categorization patterns
• Amount ranges and frequency
• Related activity (e.g., transfers, deposits, fees)
• Your chart of accounts structure
• Check image details (payee, amount, memo) when available

Digits then:

1. Proposes a category & party, such as a vendor or customer
2. Assigns a confidence score
3. Either posts automatically (high confidence) or routes to Checklist → Book (lower confidence) for review

This is why Digits doesn’t rely on rules you have to build and maintain. Instead, Digits learns patterns from your data and from what you confirm or correct, and it automatically creates and strengthens its own “rules” over time.

Categorization for connected apps

Some connected apps, such as Stripe, BILL, and Gusto, use account mappings to categorize specific types of activity. These mappings consistently send the same type of activity to the same account. For example, Stripe processing fees can be mapped to your payment processing fees account.

If you change the category on an individual mapped transaction, the change applies to that transaction only. Future transactions continue to follow the connection's account mapping.

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Confidence Scoring & Checklist → Book

Even with high accuracy, Digits is intentionally conservative when certainty is low.

Every automated categorization is assigned a confidence score.

High confidence: posted automatically

Lower confidence: routed to the Checklist

How to resolve an item in Checklist → Book

1. Review the suggested category and party
2. Confirm if correct, or change to the right category
3. Save/confirm
4. Digits learns and applies it going forward

Why the Confirm Button Might Be Greyed Out

• A required field is missing (most often: no category selected). Select a category first, then Confirm becomes available.

Tip: The more consistently you confirm and correct in the Checklist, the faster Digits learns. Early investment in review pays off quickly — within a few weeks, your Checklist volume should decrease noticeably.

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Reconciliations: What AI Does and What You Do

Digits reconciles by matching statement activity to your Ledger. When Digits has a statement (from a connection or an upload), it can keep reconciliation status up to date and surface only what needs attention.

How it works

• Your statement gets into Digits by:

  1. Connecting a bank/credit card (when statement data is available), or
  2. uploading a statement PDF in Accounting → Reconciliations, or
  3. emailing a statement to Digits (see below)
• Digits matches statement lines to Ledger transactions
• You get a clear reconciliation status plus a short list of exceptions (duplicates, missing items, or timing differences) to review and automatically apply necessary changes

For complete instructions, see: Using AI Bank Reconciliations in Digits

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Documents, Statement Uploads, and Imports

What Happens After a Document Lands in Vault

You can bring data into Digits by connecting accounts or uploading files. What happens next depends on how and where you upload.

Below, you’ll see what happens to each file type (statements, CSVs, bills, receipts, and more) based on how it enters Digits—including Connections, Ledger import, Reconciliations, Vault, drag & drop, and email.

Hint: Where you upload a file determines what Digits does with it.

Document Type: Bank or Credit Card Statement (PDF)

How It Gets Into Digits	What Digits Does With It
Ledger → Import Bank Transactions	Imports transactions into the Ledger and auto-categorizes them; Digits will then automatically start a reconciliation.
Upload to Vault	Stored in Vault (does not import transactions).
Drag & Drop	Routed and stored in Vault (does not import transactions).
Email to Digits	Stored in Vault (does not import transactions).
Reconcilations	If the transactions were already imported (by bank sync or by going to Ledger → Import Bank Transactions, then Digits will automatically start a reconciliation. If the transactions were not imported, the document will be saved to Vault.

Document Type: CSV

How It Gets Into Digits	What Digits Does With It
Ledger → Import Bank Transactions	Imports transactions into the Ledger and auto-categorizes them.
Upload to Vault	Stored in Vault (does not import transactions).
Drag & Drop	Routed and stored in Vault (does not import transactions).
Email to Digits	Stored in Vault (does not import transactions).

Document Type: Bills

How It Gets Into Digits	What Digits Does With It
Upload to Vault	Automatically creates a bill for review and approval.
Drag & Drop	Routed to Vault. Creates a bill for review.
Email to Digits	Lands in Vault. Creates a bill for review.

Document Type: Check image

A single upload can include multiple checks, which Digits processes individually. Digits also automatically rotates sideways or upside-down checks and statements during processing.

How It Gets Into Digits	What Digits Does With It
Connected Account	Extracts check images from imported bank statements, saves them to Vault, and attempts to match them to Ledger transactions.
Upload to Vault	Saves the image to Vault and attempts to match it to a Ledger transaction.
Drag & Drop	Saves the image to Vault and attempts to match it to a Ledger transaction.
Email to Digits	Saves the image to Vault and attempts to match it to a Ledger transaction.

Document Type: Receipts

How It Gets Into Digits	What Digits Does With It
Upload to Vault	Automatically attaches to a matching transaction for easy reference.
Drag & Drop	Routed to Vault. Attaches to a matching transaction (if found).
Email to Digits	Lands in Vault. Attaches to a matching transaction (if found).

Document Type: Other files (Word, Excel, general PDFs)

How It Gets Into Digits	What Digits Does With It
Upload to Vault	Stored in Vault for organization and reference only.
Drag & Drop	Routed and stored in Vault for organization and reference only.
Email to Digits	Routed and stored in Vault for organization and reference only.

I got my data into Digits — what does it categorize?

✨ Digits AI categorizes transactions, not documents.

Here’s what that means once your data is in Digits:

• Connected accounts (Connections): As transactions flow into your Ledger, Digits categorizes them automatically.
• Ledger → Import Bank Transactions (CSV ): Digits imports transactions into the Ledger and categorizes those transactions.
• Ledger → Import Bank Transactions (Bank Statement PDF): Digits imports transactions into the Ledger, categorizes those transactions, then starts a reconciliation.
• Files uploaded to Vault (including drag & drop or email): Digits stores the file, but does not categorize anything just because a document exists in Vault.
• AI Bank Reconciliation: Reconciliation matches statement activity to Ledger transactions. If Digits flags a missing transaction and you click Add Transaction, that new transaction enters the Ledger and is categorized like any other.

In short, Digits categorizes transactions as they enter the Ledger.

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Control, Auditability, and Safety

Digits is designed to support professional judgment, not replace it. You always retain control:

• Transactions can be edited, reversed, or reclassified
• Bulk changes are supported
• Manual journal entries are supported
• Changes are tracked in each transaction’s Activity Log, so you can see what changed, when, and by whom

Digits is built with bank-grade security practices, including SOC 2 Type II compliance, TLS/HTTPS for in-transit data, encryption at rest, and layered infrastructure controls.

Visit https://digits.com/security/ for more security information.

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What Digits’ AI Doesn’t Do

To set clear expectations, Digits intentionally avoids certain behaviors:

🚫 It does not auto-post transactions it isn’t confident about

🚫 It does not override human decisions

🚫 It does not answer tax or legal questions

🚫 It does not perform foreign currency conversion or revaluation

✅ AI in Digits is designed to assist and accelerate professional judgment, not replace it.

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Frequently Asked Questions

Does Digits use rules?

Yes and no. Digits doesn’t use rules you build and maintain. Instead, Digits relies on machine-learning models that learn patterns from your data, and you confirm/correct actions. Over time, Digits effectively creates and reinforces its own “rules” automatically—without you managing rule logic.

How accurate is Digits AI?

Digits’ AI is built for accounting — not retrofitted for it. It’s trained on 170M+ real transactions totaling $825B, so it recognizes the patterns behind actual books (and the weird edge cases that show up in the real world).

We believe accuracy claims should come with receipts. That’s why we benchmarked Digits against leading general-purpose LLMs (including GPT-5, Claude, and Gemini) on accounting-specific tasks. In internal testing, Digits performed 43% better.

For full methodology and results, download a copy of the full Agentic General Ledger whitepaper.

What does this mean for you? Digits automates up to 97.8% of your bookkeeping over time — so most transactions never require your attention. The exceptions that need a human eye are automatically routed to your Checklist.

Digits improves quickly as it learns your business's vendors, naming conventions, and category preferences. Every confirmation or correction is applied immediately to similar future transactions, so accuracy increases as you work. Most users see noticeable improvement by month 2–3.

Will Digits ever auto-post something incorrectly?

Digits applies confidence thresholds to avoid risky automation. When confidence is low, items are surfaced for review instead of being auto-posted.

Does Digits improve over time?

Absolutely! Digits improves over time as it learns your patterns.

• When Digits first connects to a new business, it doesn’t yet know your vendors, naming conventions, or category preferences, so you’ll usually see more items routed to the Checklist.
• Every time you confirm a category or correct a transaction, Digits applies that feedback to similar future transactions, so fewer items need review.

Does Digits use AI to extract information from uploaded documents?

Yes. Digits uses AI to extract and structure data from supported statements, bills, and receipts.

What's the difference between the Ledger & Book (Checklist)?

The Checklist is for review. The Ledger is the system of record.

Digits separates review work from recordkeeping so you only spend time where judgment is needed.

If I upload statements, will Digits automatically categorize the transactions?

Yes — if you upload a bank/credit card statement in the Reconciliations workflow, Digits will extract the statement transactions, match them to what’s already in your Ledger, and help categorize anything that becomes a new Ledger transaction.

The key detail:

• Uploading a statement does not directly “categorize the PDF.”
• Categorization happens when transactions enter the Ledger.

What typically happens when you upload a statement PDF

1. Digits reads the statement and starts an AI Bank Reconciliation.
2. It matches statement lines to existing Ledger transactions.
3. If the statement contains missing items (i.e., not in the Ledger), Digits surfaces them as exceptions.
4. When you click Add Transaction (or otherwise create those missing Ledger transactions), Digits will categorize them using its normal AI categorization models.

If you want Digits to create Ledger transactions from a statement

Use the upload path that creates/feeds Ledger transactions (e.g., statement upload via Reconciliations + adding missing items, or “Import Bank Transactions” where available). Once those transactions exist in the Ledger, Digits will categorize them.

What’s the difference between CSV import and PDF statement upload?

The difference depends on where you upload the file.

• Ledger → Import Bank Transactions (CSV or PDF) Imports transactions into the Ledger and automatically categorizes them. Does not start reconciliation.
• Accounting → Reconciliations (PDF statement) Starts reconciliation. Digits reads the statement, matches transactions to the Ledger, and surfaces exceptions.
• Upload to Vault, Drag & Drop, or Email Files are stored in Vault. If the file is a bank or credit card statement PDF, Digits will try to start reconciliation. If it can’t find anything to reconcile, the file stays in Vault. CSV files uploaded this way are stored only; they do not import transactions.

In short: Use Ledger → Import Bank Transactions to add transactions. Use Accounting → Reconciliations to reconcile a statement.

Can I categorize based on the memo field?

No. Digits doesn't use fixed if-this-then-that rules, and the memo is a note for you—it isn't a signal the categorization AI reads.

Instead, categorization learns from each transaction line's description, the party, the amount, your chart of accounts, and how you've categorized similar transactions before.

The best way to "set a rule" is to correct a transaction. Digits applies what it learns to similar transactions, and your first month or two of corrections have the biggest impact on future categorization.

Why didn’t Digits learn from my category change for a connected app?

For transactions from connected apps such as Stripe, BILL, and Gusto, some activity is categorized using the account mappings configured for that connection.

If you change the category on an individual mapped transaction, your change applies only to that transaction. It does not update the connection’s account mapping, so future transactions of that type will continue to use the mapped account.

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Got a question or feedback? Our team is all ears—come say hello!

Contact Digits Support

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