Categories

All BudgetBadger Business accounts are seeded with a default chart of accounts, with categories organized into eight groups:

1. Revenue — Revenue, Other Income, Refunds
2. Cost of Goods Sold — Direct Costs, Shipping & Fulfillment, Payment Processing
3. Sales & Marketing — Platform & Marketplace, Marketing & Advertising
4. Software & Tech — Software & Subscriptions, Research & Development
5. Labor & Contractors — Contractors & Consultants, Payroll & HR
6. General & Admin — Office & Admin, Accounting & Legal, Travel & Meals, Insurance, Other & Uncategorized
7. Non-Operating — Interest Expense/Income, Taxes
8. Excluded from P&L — Credit Card Payments, Transfers, Sales Tax Collected

You can edit the chart of accounts to add, rename, or remove groups and categories as needed to suit your business operations. There must always be at least one group for each transaction type (Revenue, COGS, Operating Expenses, Non-Operating, Excluded from P&L) in order to ensure your P&L is accurate and complete.

Click any category or group name to edit its details and click-and-hold a category chip or 6 dots at the top of the group box to re-position within the grid.

Depending on your industry, you will likely want to customize the chart of accounts to suit your business operations. Most businesses can start from the seeded chart of accounts and lean on a short list of common categories for the majority or revenue and expenses, and adjust as needed.

Below are some common starting points for different business types:

• Ecommerce / marketplace sellers — Revenue, Refunds, Direct Costs, Shipping & Fulfillment, Payment Processing, Platform & Marketplace, Marketing & Advertising.
• Service / trades — Revenue, Direct Costs (materials), Contractors & Consultants, Travel & Meals or Office & Admin (truck/tools), Insurance.
• SaaS / digital / consulting — Revenue, Software & Subscriptions, Contractors & Consultants, Marketing & Advertising, Payment Processing, Payroll & HR.

Start from these seeded groups; add custom categories only when a real recurring line is missing. Your P&L should have a handful of meaningful lines, not dozens of one-off categories. A common mistake is to clone every spreadsheet account into a custom category on day one, which can become difficult to automate and maintain over time.

See Service Business Setup and Ecommerce Seller Setup for more details.

Synced transactions are categorized by a mix of category rules, learned / AI signals from past corrections, and designated split categories (for platform integrations).

Below is the categorization priority for synced transactions:

1. Category rules you create on the Rules page or Transactions page.
2. Learned / AI categorization from merchant signals and your past category corrections.
3. BudgetBadger categorization engine that determines the appropriate category based on transaction details, including merchant name, memo, transaction type, etc.

Once you set up category rules and manually adjust transaction categories during the setup process, future data categorization will become significantly more hands off and automated. It is still prudent to regularly review your transactions on an ongoing basis to ensure accuracy of one-off transactions and reports that rely on this data.

Splitting a transaction allows you to allocation a single transaction amount across multiple categories when a single line covers mixed activity. For example, if a materials purchase appears in your bank data as one transaction, but includes both the materials cost and shipping fees, you can use this feature to split the transaction into its two component categories.

On the Transactions page, open the row actions menu (3 dots on the right side of a transaction row) and choose Split Transaction. You can create up to 10 lines.

Split amounts show a split icon on the transaction row on the Transactions page. You can edit or remove the split by clicking the split icon or navigating to the row actions menu again.

For ecommerce sellers, platform payout matching also creates allocation splits automatically (revenue vs fees) and automatically displays the split icon on the relevant rows on the Transactions page.

Refunds lives in the Revenue group (typically a negative/contra revenue line) for customer refunds, chargebacks, and processor reversals.

Platform fee and marketplace lines usually land in:

• Payment Processing (COGS) — card/processor fees
• Platform & Marketplace (Sales & Marketing) — marketplace commissions
• Marketing & Advertising — paid ads such as Etsy Ads when synced

When a platform payout is matched, BudgetBadger auto-splits the deposit into these categories based on your Integrations split preferences.

The Excluded from P&L group is an important group on your chart of accounts on the Categories page, since it keeps passthrough items, non-operational activity, and Balance Sheet movements from impacting your P&L report:

Below are definitions of the seeded categories in the Excluded from P&L group available on the Categories page:

• Transfers — money moved between your own accounts, e.g. checking to savings
• Credit Card Payments — paying the credit card bill from checking/savings account (avoids double-counting purchases already categorized on the card)
• Sales Tax Collected — tax collected from customers to remit to the government; not considered revenue or income

Make sure to use these categories whenever the cash movement is not operating income or expenses.