Personal or business, decide the lane first

Every row has two label boxes, personal and business. Decide which lane the row belongs in first, then the label, and the business book fills itself.

5 min Categorize Business

Your workbook may look different. If there is no brown band of buttons along the top, use the Money Mastery menu in the menu bar above your workbook. The names are a little different there: Categorize is Categorize Transactions, Reports is Clarity AI & Reports, Dashboard is Open Dashboard, and Start Here is Getting Started.

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Read the transcript

Hi again. Today a small decision that saves most labelling mistakes: personal or business, which lane does this row belong in.

Every row has two label boxes. Personal on the left. Business on the right. One row uses one box. You never fill both; if you try, the window clears the other one and tells you.

Here is Canva Pro, paid from your personal card. Ask what it was for. It runs the business.

So leave the personal box empty, click the business box, and choose Software from the list. The footer says Saved.

In the workbook, it is the same two columns, side by side on the account tab, an.

Once your personal and business workbooks are linked, something good happens. That Canva row moves to the business workbook by itself, with its date and the card it came from, onto a tab of rows that moved in. Your business profit is true, and the deduction keeps the date it happened.

The other way round works too: a personal purchase on the business card gets a p.

The special labels, a card payment or a transfer, sit in both lists, so a card p.

The question is not where it happened, and not what the merchant looks like. What was it for. Canva paid from your personal card is still business if it runs the business.

A row that moved keeps a note of where it came from, so the business workbook's P and L can show that the Canva charge was paid from the personal card, which is exactly what your accountant asks.

Decide the lane first, then the label. That is the whole rule. See you in the next one.

Hi again. Today a small decision that saves most labelling mistakes: personal or business, which lane does this row belong in.

Step by step

Every row has two label boxes

Personal on the left. Business on the right. One row uses one box. You never fill both; if you try, the window clears the other one and tells you.
Here is Canva Pro, paid from your personal card

Ask what it was for. It runs the business.
So leave the personal box empty, click the business box, and choose Software from the list

The footer says Saved.
In the workbook, it is the same two columns, side by side on the account tab, an
Once your personal and business workbooks are linked, something good happens

That Canva row moves to the business workbook by itself, with its date and the card it came from, onto a tab of rows that moved in. Your business profit is true, and the deduction keeps the date it happened.
The other way round works too: a personal purchase on the business card gets a p
The special labels, a card payment or a transfer, sit in both lists, so a card p

The idea behind it

The question is not where it happened, and not what the merchant looks like. What was it for. Canva paid from your personal card is still business if it runs the business.

Worth knowing

A row that moved keeps a note of where it came from, so the business workbook's P and L can show that the Canva charge was paid from the personal card, which is exactly what your accountant asks.

Remember

Decide the lane first, then the label. That is the whole rule. See you in the next one.

Up next, Chapter 3

Special labels