November 12, 2026 · 5 min read · NanoFora
How to categorize bank transactions correctly
A practical category list, the mistakes that distort profit, and rules for transfers, refunds and owner money.
Why categories matter
Every report — P&L, cash flow, tax figures — is only as good as the categories behind it.
A simple category set
Revenue, cost of sales, payroll, rent, software, marketing, travel, professional fees, bank charges, tax, and excluded (transfers, loans, owner money).
Five common mistakes
- Counting transfers between your own accounts as income.
- Recording loan receipts as revenue.
- Ignoring refunds, so revenue looks higher than it is.
- Mixing personal and business spending.
- Changing categories month to month, which breaks comparisons.
Rules that help
- Same counterparty, same category, unless there is a reason.
- Review anything uncertain instead of guessing.
- Keep the original statement as evidence.
NanoFora flags low-confidence items and requires explicit review before building a P&L draft from bank statements. See also AI bookkeeping.
- categorize bank transactions
- bookkeeping categories
- transaction categorization
- small business bookkeeping
Review your business records
Explore NanoFora’s financial analysis and review capabilities, or try the free financial calculators before uploading your records. Educational articles are not professional advice.
Start free