What are Categories and Departments?
Categories and departments are the two primary classification systems in Smartbills for organizing expenses. Categories describe what type of expense was incurred (such as Travel, Meals, or Office Supplies), while departments indicate which business unit or cost center the expense belongs to. Together, they provide the structure needed for accurate financial reporting and accounting integration.Categories
How Categories Work
Categories classify expenses by their nature or purpose. Every expense in Smartbills is assigned to a category, which determines how the expense is recorded in your accounting system. Categories are managed from Settings > Categories (/:slug/settings/categories).
When an expense is created, Smartbills may automatically suggest a category based on the vendor or the content of the receipt. The user can accept the suggestion or choose a different category manually.
Default Categories
Smartbills comes with a set of commonly used categories out of the box:Custom Categories
Administrators can create custom categories to match their organization’s chart of accounts. Custom categories support:- Custom name and description to clearly define the category for employees
- Accounting code mapping to link the category to a specific GL account number
- Tax treatment rules to flag categories that have special tax implications
- Active/inactive toggle to hide categories that are no longer in use without deleting historical data
Departments
How Departments Work
Departments represent your organizational structure, the teams, divisions, or cost centers that expenses are charged to. Departments are managed from Settings > Departments (/:slug/settings/departments).
When an expense is assigned to a department, it appears in that department’s spending reports and is allocated to the correct cost center in your accounting system.
Department Configuration
Each department can include:Accounting Integration
Both categories and departments map directly to your accounting chart of accounts. When you export expenses or sync with accounting software like QuickBooks or Xero:- Categories map to expense account codes (e.g., Travel maps to GL 6200)
- Departments map to cost centers, classes, or tracking categories
- This mapping ensures expenses land in the correct accounts without manual reclassification
Key Terminology
Roles Involved
Related Guides
Settings: Categories
How to create and manage categories in the web app
Settings: Departments
How to set up departments and assign managers
Categorize an Expense
Step-by-step guide to categorizing an expense
Expenses
Learn about the expense lifecycle