Expense and Income Classification Explained!
What is Expense and Income classification?🌙
Let’s get straight to the point. Expense and income classification is the placement of income and expenses within categories that you can understand and recognize. Take this transaction for example. Here we have a client that has a Planet Fitness gym membership expense.
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We know that Micheal (Lets call him Micheal) was charged for his Planet Fitness Gym Membership. However, what we also know is that Mike does other things to take care of himself such as Spa Sessions, and Meditation Classes.
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What we could do is categorize these purchases into something that would illustrate where money is being spent. Let’s call it “Health & Wellness”
Theres more we can do though. We know that this is health and wellness activity, but each of the places he goes to are different. In this case we can show that he went to Planet Fitness, a Spa Session, and took a Meditation class. All these different businesses he spent money with can be shown as well. Giving us a better picture of where his money is being spent when taking care of himself.
Now imagine this same principle applied to hundreds of transactions. As you can see, this level of organazing can be very powerful.
Getting paid is essentially the same. We can app
You can apply this same concept to people and businesses that pay you as well!
be appbusinesses in general, but different vendors as well!