Create categories

Categories provide insight into your administration. Some categories are given to you as a gift by Daxto, for a reason. Others you create yourself, if you want. To do so, in the Menu, go to Environment → Settings → Choose settings → Categories.

Why categories?

Accounting is the art of making sense of value. The more value (stuff and money) that goes into your business, the more useful it is. Otherwise you will lose the overview. A number of categories are also simply mandatory.

You probably used to have a piggy bank. Companies have dozens of them. Despite those numbers, it's simple. Each category is a figuratively pink piggy bank, with a label on it, so we know what that piggy bank is for. That way you divide all the money that comes in, and take money out of the right piggy bank when you spend it. And so you keep an overview.

Default categories

Dutch law has set up some rules for corporate accounting. That way, bookkeeping is similar whether you sell refrigerators or have a spa resort. That's the reason that bookkeeping accounts often already have some main categories that you start with. These are often mandatory, or at least wise to have because financial professionals often use them.

Own categories

But those standard categories are really the minimum. Therefore, for a much better understanding, you often make some subcategories, extra piggy banks. You do this for yourself, as an entrepreneur, to further subdivide your finances into logical pieces. Categories you come across on your results report and your balance sheet report, that's where you see them. But where you fill and empty them is on invoices, in transactions and in your memorandum. This is how you indicate which amount is put into which piggy bank or taken out.

Practical example

Suppose you have a business selling and repairing pianos. You have a webshop and a number of stores in shopping streets, for example in Groningen and Utrecht. You can then lump all your revenues together in your bookkeeping, but it's smarter to gain insight into which revenues come in through which channel. If you keep track of the revenue for the webshop and the store premises, you can immediately see which of the three brings in the most revenue. That way you can decide whether you want to open an additional store in Utrecht or Groningen, or perhaps focus more on the webshop?

Concrete example

In the example below, the main category 'revenue' of the results is divided into the sales channels of the piano company. The web store appears to generate the most revenue.

But these amounts do not automatically appear in the 'piggy banks', i.e. the categories. To do this, you must specify on a sales invoice that, for example, one or more invoice lines must be booked on 'Utrecht store'. This can be done immediately when creating the invoice, or later. Until your annual statement, you can quickly change categories if you want.