How Smoothy predicts expenses

Smoothy connects to your bank accounts through a service called Akahu, scans your recent transactions and looks for patterns: bills you pay every month, subscriptions, loan repayments, and other regular costs.

Costs that are considered recurring are tagged as ‘recurring expenses’, and patterns around amount, type of transaction and frequency are analysed to predict when that expense will next be due and how much it will be.

Some expenses are ‘fixed’ amounts (for example an automatic payment or Direct Debit that is exactly the same amount every time), and others are ‘variable’ recurring expenses, such as your power bill. When you see a ~ sign in front of an amount, it means it’s a variable recurring expense.

It’s important to understand that all Smoothy’s expense predictions are just that – predictions, and there is a chance they could be wrong if there are some unexpected patterns in your transaction data. Smoothy’s predictions get better every day, as you fine tune your account and exclude any that you don’t consider recurring expenses. Our thinking is, we’d rather highlight all the things we think are recurring expenses and let you exclude them if you don’t feel the same way – rather than us miss an expense that might then come as a surprise to you.

Here’s the journey your transactions take:

1. Your bank transactions
2. Group by service (e.g. all “Spark” payments together)
3. Filter out every day spending (groceries, cafes, etc.)
4. Check if expense is recurring, and if ‘fixed’ or ‘variable’ cost
5. Predict the next date
6. Predict the next amount
7. Show it in your Expenses list

Smoothy also checks for reasons something is not recurring:

• Stale: if there hasn’t been a payment in the last 3 months, Smoothy assumes you’ve stopped paying it
• Cancelled automatic payments: if 2 or more expected payment cycles have been missed for a direct debit, Smoothy assumes you’ve cancelled it

Excluding recurring expenses

If you see an expense in your list that you don’t consider a recurring expense, you can exclude transactions from that service provider from being considered recurring transactions. You can also undo this at any time if you change your mind.

• Mark a service provider as included – it will start showing up
• Mark a service provider as excluded – it will stop showing up

Summary

Smoothy’s prediction engine is designed to handle the messiness of real-world billing:

• Bills that arrive a day early or late get predicted on the right day anyway
• Price changes are handled by focusing on recent amounts
• One-off extra payments don’t throw off the schedule
• Cancelled services are automatically dropped after 3 months of inactivity
• You can always override any decision Smoothy makes