Organization Guide
How to Categorize Business Expenses
Good expense categories are the foundation of clean financial records. They make reports meaningful, tax prep straightforward, and audits survivable. This guide covers the standard IRS categories, how to build a custom taxonomy in Strong Arm, and how AI auto-categorization learns your patterns.
Strong Arm's default categories
Strong Arm pre-loads 14 categories that map to the most common Schedule C line items. Here are the 10 most relevant for independent contractors:
Creating custom categories
The default categories cover most contractors, but your business may have specific expense types that deserve their own category. Go to Categories → New Category and give it a name, color, and icon.
Good custom category names are specific and match how vendors appear on receipts:
Good
Too vague
AI tip: The more specific your category names, the better the AI matches future receipts. "AWS Hosting" will reliably catch Amazon Web Services charges; "Cloud" might not.
Frequently asked questions
How does Strong Arm's AI auto-categorization work?
When you upload a receipt, GPT-4o vision reads the vendor name and suggests a category based on the type of business. After you have 5 or more receipts, Strong Arm also learns from your history — if you've previously categorized "Shell" as "Fuel", future Shell receipts will default to Fuel automatically.
What happens if I delete a category?
Deleting a category does not delete the expenses assigned to it. Those expenses move to "Uncategorized" so no data is lost. You can then reassign them to a different category using the inline editor in the expense table.
Can I rename the default categories?
Yes. Click the pencil icon on any category in the Categories page to rename it, change its color, or swap its icon. Renaming a category updates all expenses assigned to it automatically.
How specific should my categories be?
More specific is better for tax purposes. "AWS Hosting" is more useful than "Cloud" because it maps directly to a line item your accountant can verify. Strong Arm's AI is better at matching future receipts to specific category names than generic ones.
Should I create separate categories for deductible and non-deductible expenses?
It depends on your workflow. Some contractors prefer a "Personal" category for non-deductible expenses that accidentally hit a business account. Others simply delete non-business expenses from Strong Arm. Either approach works — the key is consistency.
Related guides
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Strong Arm's 14 default categories cover most contractors out of the box. Add custom categories for your specific business in seconds — the AI learns them immediately.