Categorization

Tax-Time-Saver (TTS) provides powerful tools for pre-categorization and categorization of transactions from bank and credit card statements. Here’s how each process works and how to make the most of these features:

1. Pre-Categorization During Import:

   • Pre-categorization occurs automatically based on the description keywords from the statements during the import process.

2. Re-Categorization Using Custom Rules:

   • Categorization can be refined after import by using the "Re-Categorize" function available in the "Bank Statements" menu.
   • This process applies user-defined rules to the transactions for a specific client.

Steps for Setting Up Categorization

a) Review Default Categories:

• Check if the default categories and their descriptions meet your needs by navigating to the "Categories" menu.
• If the default categories don’t fit your workflow, disable them and create your own categories.

b) Define Your Categories:

• You can create up to 50 general categories and 50 individual categories per client.
• Note that the descriptions of these categories will be used by the AI to categorize your transactions.
• Make sure the descriptions are short and precise, based on the typical information found in transaction descriptions on the statements.

c) Apply Categorization Rules:

• Go to the "Bank Transactions" tab for the selected client (ensure that the client is visible in the filter field).
• Click the "Re-Categorize" button.
• Here, you can define rules for the selected client by adding specific criteria for transactions that should be assigned to each category.
• You can continually update and expand these rules based on new transaction patterns you encounter.

d) Re-Categorize Transactions:

• After defining or updating the rules, click "Re-Categorize" to apply the new categories to the transactions.

Approaches to Categorization:

TTS allows for two main approaches to categorization:

1. Bulk Import and Review:

   • Import all bank statements for the client at once.
   • Review the transactions, identify those that are incorrectly categorized or uncategorized, and define re-categorization rules for them.
   • Run the "Re-Categorize" function and review the remaining transactions until the list of uncategorized transactions is empty.

2. Step-by-Step Import and Rule Definition:

   • Import the first few statements and define any missing rules based on the initial transactions.
   • Once the key rules are in place, import the remaining statements and supplement any additional re-categorization rules as needed.

Note: You can manually change the category of specific transactions if you prefer not to create a re-categorization rule for them

Important Information for QBO Exports:

• Note: If you want to use rules for a QBO file export, you must disable the default categories and define your own categories, specifying the QBO category for each custom category.

Final Notes:

By setting up clear categories and defining consistent rules, you can automate the process of categorizing transactions, making your workflow more efficient and your reporting more accurate.