Our category picker gets a revamp
We’ve just released our new category picker and some new categories in the app. This update should make it easier to understand, view and change how your transactions (including bills & invoices) are defined.
- The way categories are presented
- There are now five types of categories instead of three
Why should I be interested?
The categorisation is an important element of your banking and accounting data. It impacts how we pull together your accounting reports and how this translates, for example, into your tax estimate. The correct categorisation ensures you’re able to view the latest and greatest financial performance of your business in real-time!
Do I have to re-categorise everything?
No. We automatically categorise all of your transactions as soon as they happen. It’s one of the ways we save you time, but your activities are unique to your business, so you may want to update some of the categorisations.
Can I customise my categories?
No. We’ve had a lot of requests for custom categories but we’re matching the set of categories defined by HMRC for Making Tax Digital (MTD). This, in turn will facilitate us in automating your MTD returns. In the meantime, a defined set of categories ensures everyone can understand them and is especially important for our users who have granted their Accountant data access, through our Accountant Hub. Additionally, don’t forget you can always add a photo to your transactions (we’d recommend adding a photo of the receipt for your records). Or you can add a note to describe the transaction further.
Will there be any more categories?
Yes. One of the improvements we’ve made is to add types of categories which tidies up the interface and enables us to add and improve categories. We’ll keep working on this and we’ll be releasing new categories soon!
Now there are five category types:
- Income: Money earned from the sales of products or services
- Cost: Spend to produce the goods or services sold (e.g. advertising, staff and premises costs).
- Asset: Something owned that carries an expected future benefit (e.g. cash or equipment).
- Liability: A debt or obligation that the business owes (e.g. a loan).
- Equity: Money invested in your business.
Which categories have been renamed?
“Essential costs” renamed to “Purchases”
“Essential costs” are goods purchased with the intention of selling to customers. In the accounting world they are commonly referred to as “Cost of sales”, but we always found that phrase alien. However, “Essential costs” is unhelpful as insurance might be essential but it’s not a cost of sales. We have therefore renamed “Essential costs” to “Purchases”.
“Personal transfer” renamed to “My investment”
“Personal transfer” is money that you have invested in your business. We’ve renamed this to “My investment” to make it clearer when to use this category.