Headings and categories are used to help you organize your financial information. You must first create your headings before creating your categories.
Headings define the general types of activities that generate income or spend money in your PTO. Headings are used to organize your financial information for ease of understanding, especially on your monthly reports, but you do not report activity against Headings. You do not budget at the Heading level; it is merely an
organizational tool.
Categories define the specific activities that generate income or spend money in
your PTO. Categories are used to group your individual financial transactions so
you can analyze activity and make informed decisions. Categories are grouped
under Headings. You budget at the Category level, not the Heading level (see
Chapter 3). You report every financial transaction against one or more category
Examples of Categories:
Auction
Parent group insurance
Teacher welcome back lunch
If a category has both income and expenses - we recommend only setting it up once. For example, your auction has both income and expenses associated with it. You can put both withdrawals and deposits against the auction category which is under the Fundraising Income heading. That way all your auction related data is in one place. The same is true for an expense category that might have some income. We recommend setting it up just once in the expense section.
Finally - when creating names for your categories make sure to be descriptive so you are sure to assign the right one when entering transactions.
