The most essential Pleo feature that you might not be making the most of
Look, the Pleo blog is not usually a place where you find a considerable amount on our product.
That’s not as weird as it sounds. As you probably know already – Pleo works pretty smoothly, it doesn’t need much explaining.
But categories (and subcategories) are something that are so useful for everyone when you get them right.
Want to know why they’re so important?
Just take a look at the recent transactions on my card. Don’t worry, it’s cool, we love transparency here at Pleo.
In amongst all the self-explanatory expenses (train tickets, software subscriptions), there are a couple that don’t immediately make sense.
Like this: £8.50 spent at Jimmy Jacks.
Doesn’t ring a bell, but maybe after a refresher on categories, I can take another look and solve the mystery.
Why Pleo categories matter
Categories, subcategories, tags and notes add real clarity to a purchase.
For the employee using the Pleo card, it’s a great chance to deliver – in one go – all of the information their company needs.
For a manager, subcategories and tags give the necessary context that explains why a purchase was made – meaning there’s no need for the “What on earth is Jimmy Jacks?” conversation.
And for the company’s bookkeepers, whether that’s an internal finance team or an external accountant, it’s perhaps even more critical.
Categorisation helps them to automatically apply nominal codes and tax rates to expenses when they’re exported.
That means that not only are end-of-month accounts a lot less tedious, but budgeting for future spend also becomes much more achievable.
How it works
Step one: Categories
Your Pleo card is a Mastercard – which has some significant advantages.
One of them is that Mastercard has set up nine categories that cover every conceivable business expense. When a Pleo card is used to make a purchase, our system automatically assigns it to a category based on the merchant.
These are going to be the same for every Pleo account.
• Equipment & hardware
• Marketing & advertising
• Meals & drinks
• Office expenses
• Phone & internet
The user can always amend the category on the Pleo app if needed. But in the vast majority of cases, it will be spot on.
Step Two: Subcategories
Admins can set up as many subcategories as they want, to properly sort expenses.
If the user has entered a subcategory before for the merchant, there’s a good chance our system will recognise it and apply the same subcategory.
But if it’s the first time a Pleo card has been used with that particular merchant, the user will need to manually choose the subcategory.
We appreciate that some admins really want to make subcategory selection mandatory.
But here at Pleo, we’re committed to making business spending as simple as possible for the person making the purchase.
If admins can streamline subcategories as much as possible, it won’t take much work to get employees properly using them.
Here are a few tips to make life easier for everyone.
Think of the user, not the accounts
Terminology that makes sense to a bookkeeper might be gobbledygook to an employee who just wants to top up their petrol.
So admins should leave any accounts jargon or codes out of the subcategory name.
Make it simple and remember that when you review purchases before exporting, you can amend any details as needed.
It’s not the place for an expense policy
As well as keeping the accounts info out of the name of the subcategory, there are other things that don’t need to be included.
Admins should try to avoid making it a list of rules about business spending.
The more the cardholder has to try to figure out, the less likely they’ll be to add a subcategory.
So think: Do you really need to include the per-person limit on a team dinner subcategory – or is there a better place to communicate that?
Don’t make it too long
When we look at the data for the subcategories that get used most often, they’re the most obvious ones.
“Parking”. “Postage”. “Ingredients”.
But even purchases that are a bit more complex can be kept short and to the point.
Tags and Notes can be added to flesh out the purchase details even more and ensure that it’s processed correctly by the accounts team.
Bonus: We’ve recently made it even easier to select a subcategory, with suggestions now appearing automatically under Category.
Swipe through the suggested subcategory “capsules” – if you see the one that matches your purchase, just tap it!
Step Three: Tags
Well-organised subcategories are one thing.
But to make Pleo an even smoother ride, admins and bookkeepers can set up tags. They can be implemented from Xero or e-conomic, or set up from scratch in Pleo.
Tags make it possible to track all sorts of financial dimensions related to business spending.
Whether that’s what project a purchase is related to, what team has bought something, or even which client it’s connected with.
Step Four: Notes
Notes are something that we encourage employees to focus on when they think about entering an expense into Pleo.
With so much categorisation happening automatically, a Note is where the user can add context in their own words. Things like what team members were there for a team dinner.
That won’t just help their line manager to get a fuller picture of the purchase.
It’ll also be so useful for the finance team reviewing the expense because they can ensure the categories and subcategories are all sorted in the right way, based on the information provided in the Note.
Back to that purchase I couldn’t remember…
So back to that £8.50 I spent at a merchant called Jimmy Jacks.
The receipt isn’t itemised. So without Pleo’s categorisation, I’d never figure out what that purchase was. More importantly, neither would my boss or our finance team.
It’s only when I see the Category, automatically chosen by Mastercard, that it starts to come together. It’s Food and Drink.
Still pretty basic though, so let’s take a look at subcategories.
Aha! When I snapped the receipt, I also registered the subcategory as “With customers”.
I didn’t add any Tags because there were none that apply – but if our finance team ever want to set them up, they can easily do so.
The final piece of the puzzle?
I added a Note to say that it was a coffee that I bought for our Pleo Hero Adam Castleton when I interviewed him for our blog.
So there you go, from an unfamiliar expense to a crystal clear picture, all thanks to a few seconds spent sorting categories on my Pleo app.