Transactions
Categorizing transactions
Assign transactions to ledger accounts to keep your books organized and accurate.
Categorizing transactions means assigning each bank transaction to the correct account in your chart of accounts. This is the core bookkeeping activity that turns raw bank data into meaningful financial records.
Why categorization matters
Uncategorized transactions cannot appear correctly in your financial reports. Until a transaction is assigned to an account:
- It will not show up in your income statement or balance sheet.
- Your VAT return may be incomplete.
- Your accountant cannot close the books for the period.
The dashboard shows a count of pending (uncategorized) transactions so you always know how much categorization work remains.
How to categorize a transaction
- Go to Accounting > Transactions.
- Use the Uncategorized only filter to see transactions that need attention.
- Click on a transaction to open its details.
- Select the appropriate ledger account for each transaction leg.
- Save the changes.
Tips for efficient categorization
- Work through transactions chronologically — Start with the oldest uncategorized transactions and work forward.
- Use the search filter — If you know a vendor name, search for all their transactions to categorize them in one batch.
- Check the AI suggestions — Financica may have already suggested an account. Review and accept if correct.
- Add descriptions — If a transaction's bank description is unclear, update it so your accountant understands the context.
Common categorization patterns
| Transaction type | Typical account |
|---|---|
| Office rent | Rent expense |
| Software subscription | IT expenses |
| Client payment received | Revenue / Sales |
| Salary payment | Payroll expense |
| Bank fees | Bank charges |
| VAT payment to authorities | VAT payable |
| Equipment purchase | Fixed assets |
Your specific account names will depend on your chart of accounts. If you are unsure which account to use, ask your accountant or check Understanding the chart of accounts.
Bulk categorization
If you have many similar transactions (for example, monthly payments to the same supplier), you can categorize them individually while building up patterns that the AI categorization engine will learn from. Over time, these recurring transactions will be suggested automatically.
See AI-powered categorization for details on how the suggestion engine works.