Tutorials
Creating Categories & Groups
Even before connecting your banking information and accounting software, it is recommended to set up your groups and categories. Learn how to do this through our guide.
September 23, 2025
3 min read
Categories
Before you start connecting your banking/accounting data, we recommend setting up your categories. They can be managed by navigating to the Categorization page.
By defining expense and income categories that reflect how your business operates, you’ll ensure that when you later connect your bank accounts or accounting data, every transaction is automatically sorted into the right place.
What you can do with categories and groups
- Add categories – Create new expense or income categories that match your business. While the description field is optional, adding a short description makes it easier for Compass AI to automatically categorize your transactions more accurately.
- Edit categories – Update category names or descriptions at any time to better reflect your business needs.
- Delete categories – Remove categories you no longer use. Keep in mind that once a category is deleted, it cannot be recovered.
- Create category groups – Groups help you organize related categories (e.g., "Marketing," "Operations," "Sales"). To add categories to a group, first create the group, then assign categories to it.
- Move categories between groups – If a category belongs in a different group, simply edit the category group and add the existing category. The category will automatically be removed from the old group and placed into the new one.
- Delete category groups – If a group is no longer needed, you can delete it. Be careful - deleting a group will also delete all the categories inside it.
Example: Setting up a “Marketing” group
Let’s say you want to keep track of your marketing expenses in more detail. Here’s how you could do it:
- Go to the Categorization page.
- Click Add Category Group and name it “Marketing.”
- Add categories inside this group, such as:
- Advertising – description: “Online ads, print ads, and paid promotions.”
- Events – description: “Conferences, trade shows, and event sponsorships.”
- Content – description: “Blog writing, video production, graphic design.”
- Save your changes.
Now, whenever Compass AI imports your transactions or accounting data, anything related to advertising, events, or content will be correctly categorized under one of those marketing categories.
💡 Pro tip: Well-structured categories make reporting, forecasting, and business context far more accurate and easier to interpret.
Once your categories and groups are set up, the next step is to connect your bank or accounting data. Compass AI will then automatically apply your category structure to all imported transactions, ensuring everything is organized correctly from the start.
After your data is connected, you can begin forecasting. Your forecasts will be built around the categories you’ve defined, giving you clear, accurate insights into your income and expenses.