What is transaction recategorization?

We’ve launched a new feature that gives you more control over your books—you can now update the category of your business transactions directly from the Transactions page.

Whether you’re cleaning up your records or adjusting how expenses are classified, this tool is designed to keep your financial data accurate and up to date.

What can you do?

• Click on a transaction in your dashboard
• View its current category
• Update it using the dropdown menu

It’s that simple! You’ll get a confirmation message letting you know if your change has any potential impact on your reports or quarterly tax estimates. 

You can also link invoices, write memos, and add attachments. 

How to recategorize transactions in your Collective dashboard

Here is a step-by-step guide to recategorizing transactions: 

1. Go to your Transactions page in your Collective dashboard

2. Click on a Transaction
3. View the current Category
4. Use the dropdown menu to select a new category

What happens when I make a change?

All category changes will go through a review process on our end. You’ll be notified if you need to make changes or review transactions. 

There are also in-app message features built into our system to help ensure that recategorizations will not have any potential negative implications. 

For example, when you make a change, you'll see an in-app alert asking, "Are you sure?"

This message is just a heads-up that your update could affect things like:

• Your quarterly tax estimates (QTEs)
• Any reports you’ve already downloaded
• How transactions appear in your financial summaries

These messages are there to keep you informed—not to overwhelm you. We’ll always flag anything important so you can make confident decisions. 

How will I know if transactions need review?

You’ll be notified in the dashboard if any of the changes made need your review in the Needs Review section at the top of your dashboard

1. Click on Review
2. A pop-up will appear where you can upload your receipt or invoice

3. Click Submit

We highly recommend adding invoices or receipts to your transactions. Some transactions might get extra attention from tax authorities. Make sure your expenses are reasonable, necessary and directly connected to your business, and backed up with proper documentation. Learn more.

You can also view review status under All Transactions. There are two pages where you can see transaction status:

1. Reviewed
2. Collective Reviewing

You can toggle between each tab in the upper left-hand corner. In this example, 0 items are pending Collective Review.

Reporting issues with a transaction

Our support team can help with this! We have a great Transaction Overview article in our Help Center that will walk you through how you can report an issue with a transaction. 

FAQs

What transactions can be updated?

You can recategorize transactions from the current calendar year. 

Transactions from past years (2024 and earlier) are locked to protect your prior tax filings and avoid the need for amended returns.

Why are past years locked?

Changing categories on older transactions could affect already-filed tax returns. To keep things clean and compliant, only current-year transactions are editable.

Can I edit transactions I already updated?

Yes! As long as the transactions are within the current calendar year, you can still edit them.

What categories are available?

We have a chart of accounts we’ve created as the foundation for your financial records.

It’s designed to help you easily understand your Profit & Loss and Balance Sheet reports—while also supporting accurate, tax-optimized reporting and expert analysis that can help you save money.

You can view all available categories along with examples of the types of transactions that typically fall under each one. This makes it easier to confidently categorize your activity and keep your books accurate.

Will this affect my reports or taxes?

Possibly—but only for the current year.

Here’s what to keep in mind:

• Downloaded reports may need to be refreshed if a category changes
• If your QTEs were based on the old categorization, you may see adjustments at year-end when you file your taxes

We’re here to help

If anything is unclear or you’re unsure how to categorize a transaction, reach out through the Message Center in your dashboard. Our team is happy to assist.