This article is for: admins and finance teams.
Categories tell you what your company spends money on, and they decide which ledger account each expense goes to in your accounting. Set them up once and each expense gets the ledger account your finance team needs, so there's less reclassifying at month end.
Categories and subcategories
Overview
- Factorial comes with a fixed list of categories that every company shares: Accommodation, Airlines, Car rental agencies, Fuel, Internet, Laundry, Meals, Office supplies, Other, Parking, Passport / Visa fees, Phone, Private transport, Public transport, Rail travel, Refreshments, Subscriptions, Taxis, Tolls, Training, Transport, Mileage and Per diem.
- You can't create categories, but you can rename them, turn them off, and add your own subcategories (for example Meals > Client meals). Categories are the same for the whole company; only their ledger accounts change per legal entity.
You need permission to manage category settings, and permission to manage ledger accounts to assign them.
How to use
- Go to Settings > Accounting and, under Account assignments, click Categories.
- To add a subcategory, click Add new subcategory (or Add subcategory on a category's ⋯ menu).
- Enter the Subcategory name.
- In Choose a parent category, pick the category it belongs to.
- Under Ledger account, choose the account for each legal entity (optional).
- Click Add. You'll see "Changes saved successfully", and the subcategory appears indented under its parent.
To manage what's there:
- Rename a category or change its ledger accounts: on its ⋯ menu, click Edit, change the name or the Ledger account for each legal entity, and save.
- Turn a category or subcategory off or on: use the switch on its row.
- Delete a subcategory: on its ⋯ menu, click Delete, then Ok. Categories can't be deleted, only turned off.
Link categories to ledger accounts
Overview
To link a category to your accounting, open its ⋯ menu, click Edit and choose the Ledger account for each legal entity. When someone creates or edits an expense, Factorial gives it the ledger account of its subcategory, or of its parent category if the subcategory has none. Your exports and accounting then use that account. Changes only affect new or edited expenses.
Tips and Best Practices
- Rename categories to the words your team uses, so people pick the right one first time.
- Add subcategories only where you need a different ledger account or a different rule (for example Meals > Client meals and Meals > Team meals).
- To make people always choose a subcategory, set the Subcategory field as mandatory in Expense form. See How do I choose what the expense form asks for?.
- Turn off categories your company never reimburses, so nobody can pick them.
- Related: How do I choose what the expense form asks for? · Currencies and taxes in Expenses · How do I check expenses against my expense policy?
Troubleshooting and FAQ
Troubleshooting
An employee can't find a category.
It may be turned off. Turn it on in Categories. Subcategories of Mileage and Per diem only appear on mileage and per diem expenses, not on regular expenses.
I can't turn off or rename Mileage, Per diem or Other.
That's expected: Mileage, Per diem and Other are always on and can't be renamed, because Factorial needs them for mileage expenses, per diems and expenses with no category.
I can't turn on a subcategory.
A subcategory can't be turned on while its parent category is off. Turn the parent category on first.
An employee can't save changes to an old expense.
Its category may have been turned off since. Ask them to choose an active category, or turn the category back on.
There are no ledger accounts to choose from.
Import your chart of accounts first, in Settings > Accounting. When you add a subcategory and a legal entity has no chart of accounts yet, you'll see Configure ledger accounts instead of a list.
FAQ
1. Can categories map to ledger accounts automatically?
Yes, once you link them. You link each category or subcategory to a ledger account once, per legal entity, and from then on every new or edited expense in it gets that account without anyone choosing it. Expenses that already exist don't change. See How do I make expense categories map automatically to ledger accounts?. To send expenses on to your accounting software, see How do I send expenses to my accounting software?
2. Can I create a new category?
No, the list of categories is fixed. Add a subcategory under the closest category instead, or rename a category.
3. Can I delete a category?
No, but you can turn it off. You can delete subcategories. Expenses that already use a deleted subcategory keep it.
4. If I change a category, what happens to past expenses?
Nothing. Category changes only apply to new expenses, and ledger account changes only to new or edited expenses: existing expenses and their exports don't change.
5. Can each legal entity have its own categories?
No. Categories are the same for the whole company. Each legal entity can have its own ledger accounts for them.
6. Is there another way to open the Categories settings?
Yes. In Settings > Expenses > Expense form, open the settings of the Category or Subcategory field and click Go to Categories settings.
7. Why do I see a Purchase ledger account and a Sale ledger account?
When a category's ledger account is split in two, you see Purchase ledger account and Sale ledger account instead of one Ledger account field. Pick an account for each legal entity in the fields shown.