Categories
If you want to know where your money actually goes—whether it's rent, supplies, meals, or software—you need categories. Without them, your financial reports will be meaningless lists of transactions instead of useful insights about your spending and income patterns.
What are Categories?
Categories are labels that describe what each transaction is for—like "Office Supplies," "Advertising," or "Consulting Income." They organize your money by purpose rather than by account, letting you see patterns across all your transactions. Think of categories as answering the question: "What was this money for?"
Why Using Categories Matters
Categories transform raw transactions into meaningful financial insights.
Understanding categories lets you:
See exactly where your money goes each month
Generate accurate Profit & Loss reports for taxes
Identify spending patterns and find ways to save money
Track deductible business expenses by category
Make informed decisions about where to cut or invest
Without proper categories, you can't tell if you're spending $500 or $5,000 on marketing, and your tax reports will be incomplete or wrong.
Real-World Example
You spend $1,200 at an office supply store in January. You categorize it as "Office Supplies." Throughout the year, you track all office supply purchases this way. At tax time, you run a report and discover you spent $8,500 total on office supplies—a fully deductible business expense you can now claim with documentation.
Another example: You notice your "Meals & Entertainment" category shows $3,000 in spending last quarter. You realize you're overspending on client lunches and adjust your budget accordingly.
Where to Find Categories
Navigate to: Settings > Categories and Tags to view and manage all categories
Apply categories: When entering any transaction, click the Category dropdown
View spending and income by category in Reports