Cost categories that keep a year tidy

Why category lists drift

A category list decays in three predictable ways, and all three feel sensible at the time.

1. 1Splitting. "Maintenance" becomes "Plumbing" and "Electrical" because one month had a lot of plumbing. Now the annual maintenance figure requires you to remember that a split happened, and in which month.
2. 2Renaming. "Consumables" becomes "Supplies" because somebody preferred the word. Nothing breaks visibly; a year-on-year comparison silently shows a category appearing and another disappearing.
3. 3Improvising. A cost does not fit, so a new category is created for it at the moment of capture, by whoever is capturing. Six months later there are four categories with one entry each and one of them is called "Misc 2".

The cost is not aesthetic. A drifting list means you cannot answer "is maintenance worse this year than last?" without an afternoon of manual reclassification — which is exactly the question a year of careful capture was supposed to make easy.

A small, stable set

The right number of categories is the smallest number where every cost has one obvious home and nobody hesitates. For a let property that is usually ten to a dozen:

• Cleaning — turnovers, deep cleans, premiums.
• Linen and laundry — hire, laundering, replacement stock.
• Consumables — everything a guest uses up.
• Utilities and council charges.
• Repairs and maintenance — reactive work, servicing, safety checks.
• Furnishings and equipment — replacements and additions.
• Insurance, licences and compliance.
• Marketing and listing costs — photography, direct-booking tooling, advertising.
• Software and subscriptions.
• Professional fees.
• Property finance or rent, depending on how the property is held.

Resist the urge to add depth at the start. If you need detail inside a category later, a tag or a note on the cost gives it to you without breaking the comparison a category split would.

Naming rules that survive a year

• Name by what the money bought, not who supplied it. "Cleaning", not "Brightwell". Suppliers change; the category should not.
• Avoid words that mean different things to different people. "Sundries", "General", "Other" and "Misc" are where information goes to be lost.
• One concept per category. "Repairs and cleaning" forces an arbitrary choice on every mixed invoice.
• Do not encode the property or the period in the name. That is what the property and date fields are for.
• Keep the plural and the capitalisation consistent, because two categories that differ only in case will eventually both exist.

Then write a one-line definition for each category, including an example and a counter-example. It takes twenty minutes, and it is the thing that lets you hand capture to somebody else without the list drifting.

Where to put the awkward ones

A repair that is really an improvement

Replacing a broken oven with the same model is a repair. Replacing a working kitchen is not. The distinction matters for how the cost is treated at year end, so keep improvements out of Repairs and maintenance and put them in Furnishings and equipment — then let your accountant decide what follows. Do not make that call inside a category name.

A split purchase

One receipt, two categories — a shop containing cleaning products and a replacement kettle. Split it at capture into two lines against the same receipt. A split you make in the moment is accurate; one you make at year end is a guess with a confident face.

A cost covering several properties or months

Split it by a written rule — equal shares, bedroom count, nights sold — at capture, and spread anything annual across the months it covers. An insurance premium landing whole in one month makes that month look terrible and eleven others look better than they were.

Refunds, credits and deposits

A refund belongs in the category it reverses, as a negative, not in a category called "Refunds". A deposit you hold and later return was never a cost. A deposit you retain against damage is revenue, and it needs a line that says so, or the month will look mysteriously good.

Things you paid for personally

Capture them anyway, in the right category, flagged as personally paid. Leaving them out understates the cost of running the property and overstates the return, which is the one error the whole exercise exists to prevent.

Tag to the property and the stay

A category answers "what kind of cost is this?". Two other fields answer the questions that actually change decisions.

The property, because a portfolio total cannot tell you which property is expensive. And the stay, where one applies, because that is what turns a pile of cleaning costs into a cost per turnover and a cost per night — the numbers you price against.

Not every cost has a stay. Council charges and insurance belong to the property and the period, not to a guest. Forcing them onto a stay produces a tidy-looking figure that is wrong. Costs against the property and the stay.

A worked example: one messy receipt

A single shop, one receipt, covering two properties and three categories. Split at capture, it takes a minute. Left whole, it is wrong in three places for a year.

Note the kettle. It is not a repair and it is not a consumable, and putting it in either would make one of those categories mean something slightly different from what it meant last month.

Reviewing the list, twice a year

Twice a year, spend half an hour on the list itself rather than on the costs in it:

1. 1Find every category with fewer than a handful of entries. Either it is not a real category, or costs that belong in it are going somewhere else.
2. 2Read everything in the catch-all bucket. Anything appearing three times is a category you are missing; everything else confirms the bucket is doing its job.
3. 3Check for near-duplicates — two names for the same thing, created by two people.
4. 4Re-read the one-line definitions and fix the ones that no longer describe what you actually put there.
5. 5Make any changes at a year boundary, and write down the date you made them.

That last point is the whole discipline. Changing a list is fine; changing it in the middle of a year without recording it is what makes a year impossible to read.

The checklist