Categories vs. Tags: What's the Difference?

Categories and tags are powerful tools to help you organize your business finances. While they’re often used together, they serve different purposes — and using them strategically gives you better insights into your income, expenses, clients, projects, and more.

Think of it this way:

• Categories = what the money was for

• Tags = extra details like why, where, or for whom

This guide explains how they work and how to use them effectively.

📝 Real life examples

🍽️ Lunch with a Client on a Business Trip

You buy lunch for a client during a trip to Chicago.
How to track it:

• Category: Business:Meals

• Tags: Client A, Chicago Trip

Why it matters:
This setup lets you:

• Track all business meals in your Profit & Loss report

• Run reports or filter by Client A or Chicago Trip

🎤 Attending a Business Conference

You attend a marketing conference in San Diego and incur multiple expenses.

Categories:

• Airfare → Business:Travel

• Hotel → Business:Lodging

• Meals → Business:Meals

• Conference Fee → Business:Education

Tags: San Diego Conference, 2025 Marketing

Why it matters:
Even though the expenses fall under different categories, the tags help you view your total cost for the event — ideal for budgeting, tax deductions, or planning future trips.

🔍 Categories - what the money was for

Categories classify the type of transaction. They are required for every entry and used in most standard reports.

• Organized in a parent-child hierarchy, like Business:Travel or Income:Consulting

• Only one category can be assigned per transaction

• Used for budgeting, tax prep, and key reports like Profit & Loss

• Often auto-assigned by Quicken — or manually added and remembered for future transactions

💡 Tip: If a transaction isn’t categorized automatically, you can assign it manually — Quicken will remember your choice.

🏷️ Tags - add custom tracking

Tags provide extra context. Use them to track purpose, project, person, or event — across different categories.

• Optional, user-defined, and flexible

• You can apply multiple tags to the same transaction

• Great for tracking clients, projects, trips, reimbursements, hobbies, or shared expenses

• Easily searchable and filterable for custom insights

💡 Pro Tip: Use tags to run custom reports or group related expenses — without changing your core category setup.

📊 Quick reference categories vs. tags

📌 Best practices

• ✅ Use categories to classify every income and expense transaction

• 🏷️ Use tags to track projects, events, people, or shared goals

• 🔁 Be consistent — avoid variations like Client A vs. client a

• 📊 Use reports by tag for deeper analysis (like reimbursements, client costs, or event budgeting)