Categorization assigns Transactions to the correct Ledger(s) in the Chart of Accounts, ensuring accurate financial reporting and compliance.
Accurate categorization is not just good bookkeeping—it’s a legal and financial necessity. Misclassified expenses can lead to tax complications, compliance issues, and financial misreporting. Yet, manual categorization is consistently reported as one of the most tedious responsibilities for Business owners.
At Asset, we’ve built a best-in-class categorization system that reduces the time and effort required to categorize Transactions, ensuring accuracy while allowing Business Owners to focus on running their companies.
Each Transaction that enters Asset follows a structured categorization pipeline to ensure it is correctly classified as part of a Journal Entry:
Transaction is Converted to a Journal Entry
Categorization Pipeline
The Journal Entry moves through a multi-step process to determine the appropriate category:
Transfers Detection - Was the Transaction a transfer between accounts?
Similarity-Based Categorization - Have we previously categorized a similar Transaction?
AI-Powered Categorization - What does AI predict the Transaction should be?
Uncategorized Transactions - If no match is found, the customer provides the correct category.
Business Review and Finalization
To support customizable workflows, Asset provides key attributes related to categorization:
Attribute | Description |
---|---|
Categorization Method | Indicates how the Journal Entry was categorized: transfer, similarity, AI, or manual. |
Reviewed Status | Tracks whether the categorization has been review: TRUE, or FALSE. |
Category | The Ledger ID assigned to the Journal Entry. |
These attributes allow Tenants to build workflows that ensure Transactions are properly categorized while maintaining flexibility based on Business needs.
To update the category of a Journal Entry, call the Update a Journal Entry endpoint with the following parameters and body:
Path Parameters:
Request Body:
Once updated, the new category will reflect in the application.