Receipt categories that make sense (and the ones you can skip)

In short: Receipt categories are only worth the effort when each one answers a concrete question at the end: what is tax-deductible, what is a business expense, which warranty is still running. For most people 6 to 10 categories are enough, modelled on the accountant's chart of accounts or on the deductions in the tax return. Finer categories such as "Coffee" or "Parking" cost time and deliver nothing.

A category is a promise to your future self: "When you need this later, you will find it here." The trouble is that many categories are promises that are never called in. Nobody asks in December how much they spent on parking meters. But every self-employed person asks how much went on materials and how much on the vehicle.

This article shows how to choose receipt categories that cost little when you categorize and give back a lot when you evaluate, with suggestions for private individuals, self-employed people and the special case of a chart of accounts.

What do I need receipt categories for in the first place?

You need categories for exactly two things: adding up totals and finding receipts again. Everything else is decoration.

Totals means: how much did I spend on training this year, so I can put the figure in my tax return? How much on materials, so the accountant books it to the right account? Finding means: where is the receipt for the notebook, now that it has stopped working?

That gives you a rule for every category: if you cannot imagine who will ever ask for the total of this category or search in it specifically, drop it. This rule cuts most category lists in half.

Which categories make sense for private individuals?

For private individuals the categories follow from the tax return and from what carries a warranty. A suggestion that fits most people in Switzerland:

• Training: courses, textbooks, exam fees. A separate deduction in the tax return.
• Work-related expenses: commuting, meals away from home, work equipment. What exactly counts is covered in professional expenses in Switzerland.
• Health: doctor, dentist, glasses, medication. Medical costs are deductible above a threshold, and you need the receipts collected in one place.
• Donations: donation confirmations, usually just a few per year.
• Home: service charges, repairs, and for owners the maintenance of the property.
• Warranty: anything with a warranty, regardless of tax.
• Other: for short-term keeping until an exchange or refund.

That is seven categories. A supermarket receipt needs none of them and does not need to be kept at all. The dentist's bill of CHF 620 goes under Health, the CHF 1,200 course under Training. When you fill in the tax return you see the total per category and have the receipts to go with it. Which receipts the canton actually wants to see depends on its guidance; tax deductions in Switzerland gives an overview.

Which categories make sense for self-employed people?

For self-employed people the answer is simple: the categories your Treuhänder (the Swiss term for a trustee or accountant) or your accounting software knows as accounts. Anything you name differently has to be translated by someone later.

In Switzerland most small businesses follow the standard SME chart of accounts (Kontenrahmen KMU). For receipts, that typically results in these expense categories:

• Materials and goods: purchases that go directly into products or jobs.
• Rent and premises: office, workshop, storage, including service charges.
• Vehicle: fuel, servicing, insurance, parking fees.
• Travel and expenses: hotels, public transport, meals on business trips.
• Office and admin: stationery, postage, software subscriptions, phone.
• Marketing: website, advertisements, printed material.
• Training: courses and professional literature.
• Investments: equipment and machinery above a certain threshold that your accountant depreciates rather than deducts immediately.
• Private: receipts scanned by mistake or mixed purchases.

Nine categories are enough for most sole proprietorships. Example: you buy CHF 340 of screws and timber for a job (Materials), fill up the van for CHF 78 (Vehicle) and pay CHF 29 for a software subscription (Office). Three receipts, three categories, no debate. At year end the accountant receives a CSV list with category and amount and can book directly. What that list should look like is described in exporting receipts as CSV.

If you are unsure, ask your accountant for the ten accounts they post to most often for you, and use exactly those as your categories.

Which categories can you skip?

You can drop every category that is finer than the question you want it to answer. Typical examples:

The merchant is the most common mistake. A receipt from a department store can be stationery, tools or a private gift. The category has to describe the purpose. An app such as Belego extracts the merchant automatically anyway, and you can search by it without maintaining it as a category.

A second mistake is a category for the exception. If you have one receipt a year for "Gifts to clients", it belongs under Marketing with a note, not in its own category that stays empty for 364 days.

How do I categorize quickly and consistently in everyday life?

Categorizing becomes fast when the decision is made at the moment of scanning, not later. Right then the receipt is still connected to what you just bought. Three weeks later you first have to reconstruct what the CHF 46.90 at the hardware store was for.

A workflow that works:

1. Scan the receipt. Belego crops it, saves it as a PDF and extracts the amount, date, merchant and a suggested category. Anything it cannot read reliably stays blank.
2. Check or set the category. One tap, done. For mixed receipts choose the main category and record the private share in the note.
3. Once a week, go through the receipts without a category. If you scan consistently, there are few of them.

For receipts that fit two categories: the main purpose decides, the note completes. A laptop for CHF 1,890 that you use 80 percent for business goes under Investments with the note "20 percent private". The accountant sorts out the rest, precisely because the note is there. How all this fits into an organization system you can keep up is covered in how to organize receipts.

One more rule against perfectionism: a coarse category that is maintained consistently is worth more than a fine one that nobody sets after March. If you notice that you keep skipping a category, it is either unnecessary or badly named.

Frequently asked questions

How many receipt categories are ideal?

For private individuals usually 5 to 8, for self-employed people 8 to 12 depending on the chart of accounts. The upper limit is where you start to hesitate while scanning. If the decision takes longer than two seconds, there are too many categories or the names are unclear. Better to start with a few and add one once you have missed it three times.

Should I separate private and business receipts in one app?

Yes, at least through a Private category or a dedicated marker. When exporting for your accountant you filter the private receipts out. For receipts that contain both, such as a shop visit with stationery and groceries, choose the business category and write the private share in the note so the accountant can book it out.

Which expense categories fit bexio, Banana or CashCtrl?

Ideally the accounts you actually use in those tools, with the same names. Then the CSV list from the receipt app can be matched without renaming. Belego exports the category as a column in the CSV and the PDFs with date, merchant and amount in the file name, which works for importing or attaching in all three programs.

Do I have to sort receipts by category for my tax return?

Not necessarily, but it saves time. The tax authority wants to see receipts for specific deductions, such as training, medical costs or donations. If your categories match those deductions, you export per category and have the total and the receipts together. Without categories you search through a whole year of receipts in March.