How to Categorize Bank Transactions in Excel

1. Prepare the source and scope

Import transactions.csv into a new worksheet with headers in row 1. Leave the source columns in their original order for the formulas below. Review the data dictionary before choosing the reporting period. Keep identifiers as text and convert numeric columns explicitly. Save a working copy so you can return to the original fixture.

2. Build the calculation

Create a merchant-to-category mapping on a separate sheet. Use an exact lookup for each description, then review unmatched merchants before summarizing. The supplied category column is the expected answer.

=VLOOKUP(C2,Mapping!$A$2:$B$8,2,FALSE)

3. Reconcile and interpret the output

The expected check is reviewed categories: 5 categories. The example has Income, Rent, Software, Supplies and Fees. Maintain a review queue for new counterparties. If your result differs, inspect the selected rows, data types and date filters before changing the formula.

4. Adapt the workflow to a recurring report

Replace the sample with a copy of your own source, retaining the same column meanings and units. Extend bounded ranges to include new rows, refresh PivotTables where used, and compare the result to an independent source total. Record the reporting period and any exclusions beside the output. A merchant name alone may not determine tax treatment or accounting classification.