Glossary · Accounting tools
Categorization
Also said as
transaction categorizationauto-categorizationexpense categorization
Categorization is when the software decides what a transaction was for — office supplies, meals, travel — and files it into your books automatically.
Why it matters to your business
It's the headline AI feature in accounting tools, and the accuracy claims matter: one vendor advertises 95% accuracy while bookkeeper field testing measures roughly half on novel transactions.
The catch · what vendors don't say
Accuracy numbers are measured on the vendor's terms — ask what happens on unusual transactions, because that's where the gap between marketing and reality shows.
