Automatically categorize expenses in QuickBooks Online

Learn how to turn on auto-categorization for your expenses in QuickBooks Online.

In QuickBooks Online, you can turn on auto-categorize to save you time by automatically categorizing familiar expenses. We find categories based on vendors and categories you’ve used in the past. Based on your manual work, QuickBooks learns how to categorize certain expenses with a high degree of confidence and take tedious work off your plate.

What kinds of expenses we will or won’t auto-categorize

We define familiar expenses as expenses we recognize based on vendors or categories you’ve used before.

We won’t auto-categorize less familiar expenses, such as:

• Any money-in transactions
• Tricky expenses that are highly contextual (loans, owner's draw, transfers, check payments)
• Expenses that are categorized by rules you’ve created
• Expenses we don't have enough data on to categorize confidently (such as, you haven't used this vendor before or haven't categorized the expense before)

You’ll still need to manually categorize any other expenses in the For review tab.

How auto-categorize works with other automation features

QuickBooks offers additional automation features that help save you time. When auto-categorize is turned on while other automation features are enabled, their functions work in the following order:

1. Tricky and/or money-in transactions are excluded.
2. Any rules that match or categorize transactions trigger.
3. Auto-categorize applies to the remaining expenses, and we’ll categorize and add to the books anything that is high confidence.
4. Any remaining transactions are left for you to manually categorize.

Setup auto-categorization

1. Follow this link to complete the steps in product
2. If you see a “Save more time with auto-categorize” message, select See how it works.
3. On the next page, you’ll see an introduction to how QuickBooks will categorize your expenses. Select See a preview.
4. QuickBooks displays some expenses that are similar to ones you’ve categorized before, and show how we can categorize them for you. After your review, select Next.
5. If everything looks good, choose Yes, categorize familiar expenses for me. If you decide not to allow QuickBooks to auto-categorize your expenses, instead choose No, I’ll categorize everything.
6. Select Confirm.
7. If you selected Yes, then you can select Review our work, or Go to Bank transactions.

Review and edit auto-categorized expenses

While QuickBooks can auto-categorize expenses with a high rate of accuracy, you may still want to correct or change how certain transactions are categorized. To do this:

1. Follow this link to complete the steps in product
2. Select the Categorized tab.
3. Filter your transactions list for Auto-categorized.
4. Review the categorized expenses for accuracy. If any transactions need to be re-categorized, select the current category to choose a different one. Or, you can select Undo to remove the currently assigned category. This moves the expense back to the For review tab.

Manage auto-categorization

You can turn auto-categorization off or on at any time. To do this:

1. Follow this link to complete the steps in product
2. Select Settings ⚙ at the top of the transaction list.
3. Turn the Familiar expenses switch On or Off. Changing this setting won’t affect any expenses that we’ve already auto-categorized.