How DocuClipper Transaction Categorization Works

DocuClipper categorizes bank transactions with keyword rules, not machine learning: each transaction description is matched against the keywords in a category group, and when more than one keyword matches, the most specific match wins. You can use one of the two built-in groups - Small business for business books or Personal for household spending - a custom group you define, or a vendor CSV uploaded in bulk. Because the rules are transparent keywords, results are predictable and easy to correct.

Transaction categorization is available on every plan: Starter, Business, and Enterprise. You can override any auto-assigned category manually or in bulk from the Categorize view.

Why categorization is a step you trigger

Categorization does not run automatically when a statement finishes converting. Extraction, account/period detection, and reconciliation are done for you on every conversion, but categorization is a separate step you run when you need it - and that's deliberate:

• It's rule-driven, not a model. Because it matches your keywords rather than guessing from a trained model, you can predict and tune results - which is why you edit keywords instead of retraining anything.
• Not every workflow needs it. A bookkeeper exporting straight to QuickBooks may skip it entirely; auto-running it would just clutter the project.
• You control the scope. A lender or forensic accountant usually wants to load the full set of statements (and sometimes define a custom category set) first, then categorize once across everything - that gives better results than re-running after each statement.

When you add new statements to a project later, categorization does not re-run on its own - re-trigger it after loading new periods or changing your keywords. Transfers and recurring detection are separate triggered steps too; see Why Categorization, Transfers, and Recurring Don't Run Automatically.

Where do I find transaction categorization in DocuClipper?

Open a project, select the Bank/CC Transactions tab, then the Categorize sub-tab. The Group control on the left picks the category group; Categorize All Accounts on the right runs it.

Automatic categorization with the built-in groups

DocuClipper comes with two built-in category groups, each with keywords for common merchants and bank descriptions already filled in. Both are always in the Group menu, so you can switch between them at any time.

Small business uses the categories a business P&L or Schedule C uses:

Owner draws, owner contributions, taxes, loan payments and transfers each have their own category, so they never count as revenue or as an operating expense in your totals or reports. Approved pairs from transfer detection land in the same Transfer category.

Personal is the household budgeting set: Income, Groceries, Eating Out/Dining, Rent or Mortgage, Bills and Utilities, Transportation, Travel, Shopping/Retail, Entertainment, Healthcare, Insurance Premiums, Education, Debt Payments, Savings and Investments, and Miscellaneous.

When you sign up as an accountant, bookkeeper or business owner, the Categorize screen opens on Small business; otherwise it opens on Personal. Your choice in the Group menu is remembered in your browser.

To run automatic categorization:

1. Open the project's Categorize sub-tab.
2. In Group, pick Small business or Personal (or one of your own groups).
3. Click Categorize All Accounts.

DocuClipper matches each transaction's description against the group's keyword rules and assigns the category with the most specific matching keyword. Transactions that match no keyword stay Uncategorized; add a keyword for them or set their category by hand.

To stop a built-in keyword from applying to your account, open Edit Categories and click the x on it. Built-in groups can't be deleted, but you can rename or add categories in them, or copy one into a group of your own with Add category group… and Start From.

Adding and editing keywords

To customize which transactions land in which category:

1. Pick the category group in Group and click Edit Categories.
2. In the editor, find the category you want to adjust.
3. Type a new keyword and hit Enter to save it. Transactions whose description contains that keyword at the start of a word will be assigned to that category (see How a keyword matches).
4. Click Add New Category to create a new category, then add keywords to it.

How a keyword matches

A keyword must match at the start of a word in the description. It does not have to match the whole word, and matching ignores upper and lower case.

• gas matches "SHELL GAS STATION" and "GASBUDDY", but not "LAS VEGAS".
• chase matches "CHASE CREDIT CRD AUTOPAY", but not "PURCHASE".
• amazon mktp matches "AMAZON MKTPL*ZE8WR89", because the keyword only has to begin a word, not end one.

This keeps short keywords from catching unrelated merchants in the middle of a longer word. If you relied on a keyword matching inside a word (for example a store number glued to a name), add a keyword that starts where the word starts.

How overlapping keywords are resolved

A single transaction description can contain more than one category's keyword - for example "CHAMBERLAINS PROPERTY RENT" might match both a broad rent keyword and a specific chamberlains keyword. DocuClipper resolves these overlaps predictably:

• Most specific keyword wins. The category whose matched keyword is longest is assigned, so a precise keyword (chamberlains) beats a short, generic one (rent). When a transaction lands in the wrong category, add a longer, more distinctive keyword to the category you want.
• Your keywords beat the defaults. Keywords in your own category group take precedence over the built-in default vendor database.
• Results are stable. The winner is chosen deterministically, so editing or re-saving one rule never silently changes how unrelated transactions were categorized - re-running Categorize on the same statements and keywords always produces the same result.

The keyword that won is recorded alongside the transaction, so you can always see why a category was assigned: it's in the Matched keyword column of the Categorize transactions table, which you can also filter by. That column fills in from your rules and isn't typed into; to change what it shows, edit the category's keywords and run Categorize All Accounts again. To change a single transaction, pick a different category in its Category cell.

Reading the Category and Vendor Breakdown

The Category Breakdown totals your transactions by category, and the Vendor Breakdown totals them by the keyword that matched. Each has a table and a donut chart, and both show one direction of cash at a time:

• Money out shows spending, and is what the screen opens on whenever anything went out: each category's withdrawals and charges, as negative amounts, and its share of all money out.
• Money in shows deposits and credits, and each category's share of all money in.

Switch between them with the Money out / Money in control above the charts. The line next to it gives both totals for the account you have selected, and the centre of each donut shows the total its slices divide. A category with both deposits and charges - a vendor that also sent a refund, or transactions not categorized yet - appears on both sides with its own amount on each, so a refund never shrinks a category's spending. Hover over a slice to see its signed total and share, and click a row to filter the Transactions table below to that category or keyword.

The Uncategorized Transactions Detected banner counts the transactions with no category and gives their money in and money out separately.

Choosing which columns you see

Use the Columns menu at the right end of the Transactions toolbar to show or hide columns in the categorization grid. The Source column, which names the uploaded statement each transaction came from, is hidden by default to leave room for Description and Category. Turn it on from Columns when you need to trace a row back to its file. The grid remembers your column choices, widths, and order.

Updating uncategorized transactions

• Manual: Open the Category cell on a transaction row and select the correct category.
• Bulk: Select multiple transactions (or select all), then click Update Category and choose the category to apply.

Need a category that does not exist yet? Type its name in either picker and choose Create category "...". It is added to the category group you have selected, applied to the transaction (or kept in the bulk picker, ready for Update Category), and listed in every category picker from then on. Add keywords to it in Edit Categories if you want future transactions categorized into it automatically.

Creating a custom categorization group

1. Open the ⋮ menu next to Group and choose Add category group….
2. Name the group (e.g. "Client Expenses") and click Create group.
3. Open the group and click Edit Categories.
4. In the popup, enter a category name and click Add New Category. Repeat for each category.
5. Add keywords to each category and hit Enter to save.
6. Click Close when done.
7. Click Categorize All Accounts to apply the rules.

Uploading a vendor/category CSV

To build a whole categorization group at once, upload a vendor/category CSV instead of typing keywords one by one. Each row maps a vendor keyword to a category, and DocuClipper assigns that category to any transaction whose description contains the keyword at the start of a word (case-insensitive). A description that matches no keyword stays uncategorized. Shorter, distinctive keywords ("AMAZON", "UBER") match more transactions than long exact strings. It's the fastest way to categorize large statements or apply the same rules to every client.

Create the CSV with two columns - Vendor (the keyword to match, e.g. Amazon) and Category (the category to assign, e.g. Online Purchases). Add one row per keyword; multiple rows can share the same category. Save it as .csv.

Upload it:

1. Go to the Categorize page.
2. Open the ⋮ menu next to Group, choose Add category group… and enter a name for the group.
3. Pick the new group in Group, then click Edit Categories.
4. Click Upload CSV and pick your file - this opens the Import categories from CSV screen.
5. Map your columns to Vendor and Category when prompted.

Make sure the group is selected in Group, then click Categorize All Accounts to apply the rules. To adjust rules later, edit the CSV and re-upload, or open Edit Categories to add, correct, or delete keywords by hand - then re-run Categorize All Accounts. Keep separate groups for different transaction types or different clients.

Tips for effective categorization

• Use specific category names. "Gas" is more useful than "Auto".
• Add multiple keywords per category to improve match rates.
• Periodically review and update keywords as your transaction descriptions change.
• Use the manual override for any transaction the auto-categorization gets wrong.

Use cases

• Accountants and bookkeepers organizing client financial data
• Business owners analyzing expenses and payroll
• Tax professionals separating deductible expenses
• Forensic accountants investigating transaction patterns

For questions, contact support@docuclipper.com.

FAQs

Which plans include transaction categorization?

Transaction categorization is available on every plan: Starter, Business, and Enterprise.

How does DocuClipper decide which category a transaction belongs to?

Each transaction's description is matched against keywords in the active category group. The built-in Small business and Personal groups come with keywords for common merchants and bank descriptions; you can also add your own keywords or build custom groups. When a description matches more than one keyword, the most specific match (the longest matching keyword) wins, and your own keywords take precedence over the built-in defaults.

Can I edit a transaction's category after auto-categorization?

Yes. Pick a different category in a row's Category cell to change one transaction, or select multiple rows and use Update Category to apply a category in bulk.

Can I create my own categories instead of using the defaults?

Yes. Choose Add category group… from the ⋮ menu next to Group to create a custom group, then add categories and keywords inside it. Click Categorize All Accounts to apply your rules.

How do I categorize many vendors at once from a spreadsheet?

Use the vendor categorization CSV upload to add categories and keywords in bulk rather than typing them one by one in the editor.

Why do some transactions stay uncategorized?

Their descriptions did not match any keyword in the active group. Add more specific keywords to the relevant category, or update the transactions manually in their Category cell or with the bulk Update Category action.

Related

• Categorization, Transfers, Recurring, and Cashflow Overview
• Transfers Analysis
• Recurring Transactions Analysis
• Cashflow Analysis
• Transaction Categorization Software