How to categorise bank transactions fast
Updated 2026-08-19
Categorising line by line is the slowest possible approach and it is what most people do. A converted statement supports a much faster method, because descriptions repeat far more than they vary.
Sort, do not scroll
Sort the sheet by description. Identical and near-identical payees group together, and a year of transactions collapses into a few dozen distinct payees. Categorise each block once rather than each row individually.
Build a keyword rule table
Keep a second sheet of keyword and category pairs, then match against it. A short formula such as a nested lookup over the keyword list assigns most rows automatically, and the table gets better every time you use it.
The categories that actually matter
Precision beyond what you will act on is wasted effort. Most people need:
- Income, split by source if there is more than one
- Fixed committed costs such as rent, loans and insurance
- Variable operating costs such as fuel, materials and software
- Fees, interest and bank charges
- Transfers and owner draws, which are neither income nor expense
Review the uncategorised tail
There will always be a residue of one-off payments. Sort by amount and work down from the largest: the top twenty rows usually account for most of the value, and small one-offs rarely change a decision.