Manage categories
Categories are where transactions land in reports. LeedBooks uses them to keep review, rules, and financial statements consistent.
What categories do
Categories decide how transactions appear in reports.
When a transaction is categorized correctly, it shows up in the right place on the Profit and Loss, Balance Sheet, Cash Flow, Trial Balance, and tax-related views.
The best category list is simple, clear, and consistent. Too many near-duplicate categories make reports harder to trust.
Use the normal categories most businesses need.
Review new categories only when transaction patterns justify them.
Avoid duplicates like Meals and Meals & Entertainment unless both are truly needed.
Standard categories
New businesses should start with a standard category set.
That usually includes core income, expenses, owner equity, bank accounts, credit cards, taxes, meals, software, advertising, contractors, professional fees, and other common business buckets.
Users should not have to build all of that from scratch.
Suggested categories
Suggested categories should be smart.
LeedBooks should only suggest a category when it sees evidence in transactions and the category does not already exist in a matching form. If the account already has Meals, it should not blindly suggest Meals and Entertainment unless there is a real reason to separate them.
Suggestions belong on the Categories page so they do not clutter the review queue.
Avoid duplicates
Duplicate categories create confusion.
Examples to watch for:
- Meals vs Meals and Entertainment.
- Auto vs Auto Expense.
- Software vs Subscriptions.
- Contractor Labor vs Contractors.
- Commission Income vs Commissions.
If two categories mean the same thing, keep one and use rules or aliases to make future activity land there.
When to add one
Add a new category when the business has a real reporting need.
Good reasons:
- A recurring expense needs separate tracking.
- A tax category should be clearer.
- A business line needs its own income bucket.
- Reports are easier to understand with the new category.
Weak reasons:
- One transaction looked unusual.
- The AI guessed a new label without checking existing categories.
- A bank description included a word that sounded category-like.
Understand transfer detection
Transfers are internal money movement. They should not inflate income or expenses.
Read transfer guide