Using Category Rules to automatically categorize transactions

A Category Rule automatically categorizes newly imported transactions for you! Category rules are checked against your transactions (after your Filters) and will re-categorize any transactions that have been automatically categorized from the bank feed 🎉

How category rules work

Category Rules let PocketSmith do the heavy lifting 💪🏽 for you when it comes to getting your transactions categorized. With Category Rules, you're able to set up your PocketSmith account to automatically categorize transactions just the way you like. This means less time spent manually categorizing your transactions - yay!

Category Rules work by matching a transaction's merchant name to the merchant keywords belonging to a Category Rule. If a transaction's merchant name has text in it that match the Category Rules'  merchant keywords, then that transaction will be assigned to the appropriate category.

Example:

Bridie shops at Betty's Liquor store for wine. She wants all her Betty's Liquor transactions to be automatically assigned to her 🍻 Drinks category. The trouble is, each time a new transaction comes in from Betty's Liquor, it often comes in with different details in the merchant name, such as, a different time, date, or card information etc. 

When Bridie sets a Category Rule for Betty's Liquor, she needs to pick out the best merchant keywords from the transaction in order for the Category Rule to be successful each time a new transaction comes in. In this case, the common merchant keyword for Bridie's transactions at Betty's Liquor is 'Bettys'.

Creating category rules and editing merchant keywords

There are a few different places around PocketSmith where a Category Rule can be created for a transaction and where you can add a transaction's specific merchant keywords to a category rule. 

We recommend applying your category rules from the Categorize transactions page or when editing a transaction because you can simultaneously edit the merchant keywords for that transaction.

Based on the example above with Bridie's Betty's Liquor purchase, Bridie can adjust the merchant keywords so that it just contained 'Bettys'.

Creating a category rule and editing merchant keywords from the Categorize transactions page

When categorizing transactions from the Categorize transactions page, you can add merchant keywords to a Category Rule so that similar future transactions are automatically categorized.

1. Head to  Categorize Transactions ( Manage > Categorize Transactions)
2. Assign a category to the transaction
3. Tick the checkbox for Make this a Category Rule

4. Edit the merchant keyword so that it will match future transactions

   

   
   
5. Click  Save & continue

Creating a category rule and editing merchant keywords when editing a transaction

When editing a transaction from the Transactions page, you can add merchant keywords to a category rule so that similar future transactions are automatically categorized.

1. Navigate to the transaction you would like to categorize on the Transactions page 
2. Click on the transaction and select a category from the category dropdown
3. Tick the checkbox to  Make this a Category Rule
4. Edit the merchant keyword so that it will match future transactions, then click Save

Adding to a Category Rule from the Transactions page

When categorizing transactions from the Transactions page, you can create a category rule for transactions so that similar future transactions are automatically categorized too. However, you'll need to head to your Settings to edit the category rule's merchant keywords.

1. Head to the Transactions page 
2. Select all the transactions you want to categorize to the same category
3. Click on the Category menu item in the toolbar 
4. Click the checkbox beside  Make this a Category Rule

5. Select a Category from the dropdown menu to categorize the transactions and create separate category rules for each set of merchant keywords

   

   
   
6. The category will be applied to the selected transactions, and the rules will apply to any future transactions that match the merchant names in your selection

7. Following this, it's really important to edit your merchant keywords for the newly created category rule, as the merchant keywords may need to be refined to broaden the category rule's application.

   Learn how to do this here: Editing merchant keywords

Editing or deleting a category rule

To improve the Category Rules performance so that they automatically categorize more transactions, you will want to edit the merchant keywords or the order of your Category Rules. 

The following user guide explains how to edit your Category Rules:  Editing category rules.

For steps on deleting Category Rules, please see: Deleting a Category Rule.

Ordering and how category rules are applied

How PocketSmith applies your filters to your transactions

When transactions are imported into PocketSmith they are checked against your ordered list of category rules for matches. When there is a match, the actions are applied to that transaction, and the transaction is then removed from further category rules checks.  Here is a breakdown of the process: 

1. All newly imported transactions are gathered
2. The first category rule checks this group of transactions for any matches
3. If there is a match with any transactions, those transactions are removed from the group and the category rule is applied
4. The next category rule then checks against the remaining transactions (none of which will have any matches from previously applied category rules)

Ordering your category rules to improve how they are applied

It's best to set up your category rules so that highly specific rules are given higher priority at the top of your category rules list, with more general rules given a lower rank. This means that the more specific category rules will be applied to matching transactions before more general ones.

Changing the order of category rules 

1. Head to Manage >  Category Rules, Saved Searches and Filters

   

   
   
2. Select Category rules from the left menu

3. Click and drag the handles on the left of a rule to change the order

   

   
   

Applying a category rule to past transactions

When you create a new category rule, it won’t run the rule against any existing categorized transactions - only against uncategorized transactions and new transactions that are imported to PocketSmith in the future. 

However, you can force a category rule to run against your existing transactions!

1. Head to Category rules, saved searches and filters ( Manage > Category Rules, Saved Searches and Filters)
2. Ensure Category rules is selected in the left menu
3. Navigate to the category rule you're looking for, click the three-dot menu, and select Edit

4. At the bottom of the list of merchant keywords, you'll see a section  Apply category rule to all matching transactions. This section will only show if there are transactions that match your category rule but are assigned to a different category, or, are currently uncategorized.Tick the checkbox  Manually apply this category rule to all transactions containing the above merchant keywords > Apply category rule > OK

   

The difference between Category Rules and Filters

Category Rules work by automatically categorizing your transactions purely based on the merchant (or keywords within the merchant), of a transaction. Filters, on the other hand, can categorize your transactions based on multiple criteria, such as Merchant keyword + amount + specific account. 

Filters can also apply changes to transactions other than just assigning a category.

Filters can:

• Add a label
• Change the merchant name
• Delete a transaction
• Mark a transaction with the transfer icon
• Assign a category

For more detail on using Filters please see  Everything you need to know about filters.