Transaction Categorization

What is transaction categorization?

Transaction categorization involves classifying transactions in a bank statement into categories, such as credit cards, groceries, utilities, entertainment, investment, etc. In the bank statement document, the transaction categorization feature adds three fields to each row in the transaction line item: category, sub-category, and merchant. These fields provide a broad-level categorization of transactions.

• Category: The broad classification of a transaction like Credit, Debit, Transfers, etc.
• Sub-Category: Further classification under each category. For example, under Debit category, sub-categories could include Groceries, Restaurants, Entertainment, etc.
• Merchant: The specific seller or service provider involved in the transaction. The merchant will be different for each transaction description. For example, Amazon, PayPal, eBay, Starbucks, etc.

Why use transaction categorization?

• Transaction categorization is beneficial for gaining insights into the spending habits of the bank statement account.
• Listing fields such as categories, sub-categories, and merchants provide reviewers with a comprehensive overview of how a user's finances are distributed across different areas.
• This breakdown facilitates better analysis and tracking of cash flows in the account.

How to enable transaction categorization on bank statements

Steps:

1. To enable transaction categorization, set the additional parameter enable_category to true in the document type's Pre-processing settings. Append enable_category:true to the additional parameters field.

1. This will populate the category, subcategory, and merchant fields in the transaction tables of new documents or retried documents in that document type.
2. This categorization of transactions will take approximately 10 minutes after the processing of the document.
3. The status of the categorization will be shown in the key value field review screen as either of the following:
   1. not enabled
   2. pending
   3. enabled: Processing
   4. enabled: success
      
      
      
4. Only after the status is set as enabled: success the categories will be shown properly in the transaction tables.