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How do I know which category to use for my expenses?
I’m still not sure which category to use. What should I do?
Can I change the category of a purchase I’ve already entered?
Troubleshooting
Related topics

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Categorising your purchases

The basis of any accounting system is the nominal ledger. QuickFile comes preloaded with a full set of nominal ledgers that are used to categorise the day-to-day transactions you make in your business. In QuickFile we refer to these ledgers as Nominal Categories, and you choose one in the Category box on each line of a purchase.

This guide gives you some simple rules for choosing a category, shows you how to get a recommendation from QuickFile, and explains how to change the category of a purchase you’ve already saved.

Prefer to watch?

Prefer a video walkthrough? Watch our How to Categorise Purchases in QuickFile tutorial on the QuickFile Help Guides YouTube channel.

How do I know which category to use for my expenses?

Categorising purchases can be tricky if you’re new to bookkeeping. Fortunately, there are a few simple rules that will keep you on the right track.

Items you resell or use to deliver your service

Use General Purchases for items you buy to resell, or that you use up to make your product or carry out your service, such as materials or ingredients. If you’d rather be more specific, you can add your own nominal account.

Items you paid for with your own money

Paying with personal funds doesn’t change the purchase category: it changes how the payment is recorded. Choose the category for what you bought, then in Payment Details set Paid From to the account that funded it:

Sole traders: the Proprietor Drawings Account.
Limited companies: the Directors’ Loan Account (assuming the director made the purchase).

Food and drink

Food purchases should rarely be claimed as a business expense. Day-to-day items such as tea, coffee and milk for the workplace can go under Refreshments / Staff Welfare. If the food is resold in your business or is an ingredient (for example in a catering business), use General Purchases.

Professional services

Agency, accounting and legal fees can go under Professional Fees. If you want to keep them apart, there are also separate categories for Audit and Accountancy Fees, Legal Fees and Consultancy Fees.

Payments that aren’t purchases

Practically everything you buy for your business should be recorded as a purchase, either manually or from bank tagging. Some outgoings are not purchases, though, and should be tagged from the bank instead. Click Tag Me on the bank transaction and choose the matching option:

Payment	Tag Me option
Tax payments (VAT, PAYE, Corporation Tax)	Tax payment to HMRC (e.g. VAT, PAYE or Corporation Tax)
Salary payments and drawings	Salary or other drawings
Payments to clear a credit card	Bank transfer between accounts
Loan and mortgage repayments	Something else not on this list, then choose the nominal account

Assets

Some categories record a purchase as an asset rather than an expense. Common asset purchases include computers, tools (for construction businesses), motor vehicles and furniture. In the Category list, asset categories end in [Asset], for example:

Furniture and Fixtures [Asset]
Motor Vehicles [Asset]
Office Equipment [Asset]
Plant and Machinery [Asset]
Stock [Asset]

Tip: You can type in the Category box to filter the list, or click its arrow to see every category.

Please note: Whether an item is an asset or an expense can depend on its value and how long it will last. If you’re unsure, check with your accountant.

I’m still not sure which category to use. What should I do?

When you enter a purchase, the Help me Choose a Category button above the line items lets you search more than 100 helpers that we’ve added for common items.

Open the purchase you’re entering (for example, click Log a purchase on your dashboard).
Click Help me Choose a Category above the line items.
In Enter a description of the purchase, start typing what you bought, then click the closest suggestion.
Check the Recommended Category and the Explanation, then click Update purchase form. The category is added to the purchase line.
Enter the description and amount for the line, then save the purchase as usual.

Tip: Search with a short, general word (for example “computer”, “fuel” or “insurance”). If nothing appears, try a different word, or click Can’t find a match? for a few quick rules and a link to the community forum.

If you still can’t find what you’re looking for, you can always make a post on our community forum. Our forum is frequented by accountants and bookkeepers who may be able to help.

In most cases one of the existing nominal categories will be suitable for your purchase, but you can also add your own nominal account if you can’t find a suitable match.

Important: Be careful not to add too many nominal accounts, as this will create extra work for your accountant at the year end.

Can I change the category of a purchase I’ve already entered?

Yes. In most cases you can go back and change the category of a purchase you’ve already saved.

Change one purchase

Open the purchase from the Purchases menu.
Click Modify.
Choose the new category in the Category box on the line you want to change.
Click Save Details.

Change several purchases at once

If you need to correct the same mistake on several purchases, or on purchases in a locked period, use the bulk re-coding tool:

Go to Reports > Chart of accounts.
Click View next to the category the purchases were posted to.
Tick the entries you want to move, then click Move to new code.
In Re-code postings, choose the correct Category, then click Save.

The entries on the ledgers are updated, along with the purchases they belong to.

Please note: Re-code postings only lets you move purchase entries to other purchase and expense categories: asset categories aren’t in its list. To move entries into an asset category, or to move a group of entries in one step, you can use a simple journal instead (Reports > Journals > Create Journal).

Troubleshooting

Help me Choose a Category doesn’t suggest anything

The helper only suggests matches for the words you type. Try a shorter or more general word (for example “refreshments” rather than “coffee”), or click Can’t find a match? for some quick rules. You can also ask on the community forum.

I can’t find a Staff Refreshments category

Tea, coffee and milk for the workplace go under Refreshments / Staff Welfare.

I can’t move entries into an asset category with Move to new code

Re-code postings doesn’t list asset categories. Change the category on each purchase with Modify, or move the entries with a journal (Reports > Journals > Create Journal).

I paid for a business item with my personal card

Record the purchase with the normal category for the item, then set Paid From in Payment Details to the Proprietor Drawings Account (sole traders) or the Directors’ Loan Account (limited companies).