Ambrook’s category tags (otherwise known as your income and expense categories) are designed to make tax season as easy as possible. Every category is tied to a particular Schedule F box underneath the hood, allowing you to hand over cleaner books to your CPAs.
Below are a couple steps you can take to minimize your accountant’s hours ahead of tax time as it relates to the Schedule F. For general bookkeeping tips, see this article.
Reviewing Your Categories
It’s natural for your list of categories to grow over the course of a year of using Ambrook, as your business grows and you realize you need a more detailed set of tags. As a result, it’s best practice for you (ideally with the help of your accountant) to complete a review and light cleanup of your Chart of Accounts prior to exporting your bookkeeping data.
How to get started:
Go to Categories (under the “Tags” section in Settings).
You’ll see a table that contains all of your category tags, complete with descriptions and the Schedule F box assignment (if applicable).
Scan the list of categories, section by section.
Look out for similar or duplicate categories. If you spot any, you can consolidate by returning to your Ledger, filtering to transactions with the category tag(s) you don’t want to keep, bulk retagging those transactions using the checkboxes, and returning to Settings to delete the now-unused category.
Look for errors, such as if a Cost of Goods Sold category should be filed under Operating Expenses. You can edit, rename, or remove categories by selecting the pencil icon next to it. Tip: Your Analytics tab is also a great place to catch mistakes, as the data is presented in visuals.
We recommend you have an accountant view this page and suggest changes to the Schedule F designations. Ambrook is a tool for staying organized, and we cannot guarantee that this taxonomy is foolproof.
Exporting Transactions
Now that your tags are clean and consolidated, you can export your data for analysis or tax prep purposes.
Instructions
Go to Export (under Settings).
Click the “Download” button next to the export titled “Transactions.”
This will provide you all of your Ambrook transactions in spreadsheet format, and columns including descriptions, amount totals, tags (and splits, if applicable), and the Schedule F designations for those amounts, as defined in the “Reviewing Your Categories” section.
To see totals of the Schedule F boxes, we recommend using a PivotTable on your spreadsheet with appropriate filters. This will transform the data from (potentially) hundreds of rows, into a clear, aggregated view of your expenses and income.