How to Categorise Expenses Correctly in AskBiz
A practical guide to choosing the right category for each expense in AskBiz, why correct categorisation matters for reporting, and how to handle ambiguous cases.
Key Takeaways
- Choose the category that most accurately reflects the nature of the purchase, not the vendor name.
- Consistent categorisation over time makes the Category Breakdown bar genuinely useful for spotting spending trends.
- When unsure, use Other rather than picking an approximate category that will skew your reports.
Why Correct Categorisation Matters
Every expense you log in AskBiz is assigned to one of 14 categories. These categories are not just labels — they feed the Category Breakdown bar at the top of the Expenses tab, and they allow you to filter your expense list to see spending in a single category over any time period. If you routinely miscategorise expenses, the breakdown bar becomes misleading. For example, if you put your accountant's monthly invoice under Supplies instead of Professional Services, your Professional Services total will be understated, and you may not realise that external advisors represent a significant portion of your outgoings. Correct categorisation from the start saves effort later when you are reviewing spending or preparing financial summaries.
The Decision Rule: Nature Over Vendor
The most common mistake is categorising an expense based on who you paid rather than what you paid for. Amazon, for example, sells software subscriptions (Software/SaaS), physical goods (Supplies or Equipment), and logistics services (Shipping). A single vendor can span multiple categories depending on what was purchased. When choosing a category, ask yourself: what did I get in return for this payment? If you paid Amazon for AWS cloud hosting, the category is Software/SaaS. If you paid Amazon for a printer cartridge, the category is Supplies. If you paid Amazon for next-day courier delivery to a customer, the category is Shipping.
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Start for free →Setting the Category on the Manual Entry Form
When filling in the manual expense form, tap the Category field after entering the amount. A scrollable list of all 14 categories appears. Read through the options and select the one that best matches the nature of the purchase. The list is ordered roughly from highest-frequency categories (Rent/Lease, Payroll) at the top to lower-frequency ones (Taxes and Fees, Other) at the bottom. If none of the 14 categories fit precisely, choose Other. You can always filter on Other later to review and recategorise those entries when you have more context.
Correcting Miscategorised Expenses
To fix a category on an existing expense, find it in the expenses list — use the search bar or category chip filters to narrow down the list. Tap the expense row to open it in edit mode. Tap the Category field, choose the correct category, and tap Save. The Category Breakdown bar at the top of the Expenses tab updates immediately. If you have many miscategorised expenses from the past — for example, after importing historical data — work through them in batches by filtering on the wrong category using the category chips, then editing each entry.
Using the AI Receipt Scanner to Pre-fill Categories
When you scan a receipt, the AI suggests a category based on the vendor name and items listed. For well-known vendors and clear receipts, this suggestion is usually accurate. You should still review the category field on the review screen before confirming, especially for vendors that sell across multiple categories. If the AI consistently suggests the wrong category for a particular vendor, override it on the review screen each time. Developing the habit of checking the category field on every scan takes a few seconds and keeps your reporting clean.