Overview

Expense Category Rules let your organization automatically code transactions based on conditions you define, saving time and reducing manual work. 

You can also choose to have Extend’s AI automatically select the category for the rule, using your organization’s past coding decisions and integration sync history.

This gives you two powerful automation options:

1. Rule-Based Coding (You Define the Category)
   You choose the exact expense category the rule applies when conditions are met.
2. AI-Powered Auto-Coding (Extend AI Selects the Category)
   Extend’s AI reviews your org’s historical coding behavior and automatically selects the category that best fits each transaction the rule applies to. You can always review or adjust the coding afterward.

Creating Rule-Based Coding 

With expense category rules, Owners, Admins, and full-visibility Bookkeepers can set conditions that automatically assign expense categories to transactions, such as:

• Funding source: Specific registered accounts or budgets
• Merchant category code (MCC): Categories like “Travel” or “Restaurants”
• Merchant name: Specific merchants such as "Amazon" or "Google"

Owners, Admins, and full-visibility Bookkeepers can create expense category rules by following these steps:

1. Hover over the settings icon at the top right corner of the main navigation and select Organization Settings. 
   
2. Open the Accounting Automation tab and select the New Rule button.
    

3. On the Create Expense Category Rule flyout, follow these steps:
   1. Name the rule. Enter a name that clearly describes the rule’s purpose, for example, "Travel Expenses for Sales Team".
   2. Define the rule criteria. Options for criteria include:
      1. Funding source: Select a specific account or budget. Leave this blank to apply the rule to all funding sources.
      2. Merchant category code: Choose a specific merchant category code, such as “Travel” or “Restaurants”. Leave this blank to apply the rule to all MCCs.
      3. Merchant name: Enter the merchant name, like "Amazon". Leave this blank to apply the rule to all merchants.
   3. Set the expense categories. Select one or more expense categories to apply when the defined criteria are met. Leave this blank if a category does not apply.
   4. Review your settings and click Create Rule at the bottom to activate the rule.

Viewing expense category rules

Owners, Admins, and full-visibility Bookkeepers can view their org’s expense category rules at any time from the Accounting Automation tab of the Organization Settings. 

Permitted users can update or deactivate expense category rules at any time. See Managing expense category rules to learn how. 

And check out Coding transactions with expense category rules to see how automatically coded transactions appear in Extend.

AI-Powered Expense Category Rules

AI-Powered Auto-Coding allows Extend to automatically choose the best expense category for the rule based on:

• Your organization’s historical coding behavior
• Coding decisions synced from QuickBooks Online or NetSuite
• Past patterns from similar transactions

This helps reduce guesswork, prevent mis-coding, and speed up reconciliation.

How AI Auto-Coding Works

When a transaction meets the rule’s criteria:

1. Extend evaluates past coding decisions made across your org
2. Predicts the most likely expense category
3. Applies that category automatically

You can always review or adjust the category later

How to Enable AI for a Rule

1. From the Home page select Settings
2. Navigate to the Rules & Workflow section and select Automation
3. Toggle on Expense Category Auto-Coding
4. Once enabled, Extend will automatically code transactions with the Account expense category.
5. Users can always review or adjust at any time. 

FAQ

Who can create rules?
Rules can be created and managed by the org Owner, Admins, and full-visibility Bookkeepers.

What if my organization doesn’t have any expense categories?
Before you an org can create expense category rules, they must first create expense categories. There are two ways the Owner, Admins, and Bookkeepers can create expense categories for their org: 1) manually from the Expense Category tab on the Organization Settings page, and 2) by connecting Extend to Quickbooks Online or Netsuite to import their existing category codes.

What if I need to update my Rule-Based expense category rule?
The Owner, Admins, and full-vis Bookkeepers can update a rule at any time. Once the rule is updated, it will apply to future transactions that meet the criteria.

I updated my expense category rule, but I need to fix the coding on my historical transactions, what can I do?
You can update the expense categories on historical transactions at any time.