Understanding Supplier and Purchasing Categories

Overview

OmniPATH features a sophisticated categorisation system that gives you detailed visibility into your spending behaviours without impacting your accounting practices. This article explains how categories work and why they're essential for effective spend management.

What are purchasing categories?

Purchasing categories are granular classifications that provide deeper insight into what your organisation buys and from whom. Unlike traditional GL codes alone, our category system offers:

Over 100 pre-configured purchase categories covering all common business expenses
Detailed spending analysis beyond basic accounting classifications
Flexible reporting that shows exactly where your money goes
Operational insights that help identify cost-saving opportunities

How categories work with GL codes

The Two-Tier System

OmniPATH uses a smart two-tier approach:

Tier 1: Purchase Categories (100+ options)

Specific classifications like "Office Furniture", "Cloud Software Subscriptions", "Games Rooms"
Granular detail for operational analysis
Business-focused language that operations teams understand

Tier 2: GL Codes (26+ standard codes)

Financial classifications for accounting purposes
Multiple categories can map to a single GL code
Maintains compliance with your chart of accounts

Complete Flexibility

Here's the key advantage: Each category or group of categories can tie to a single GL code, giving you:

Operational detail for day-to-day management
Financial accuracy for accounting compliance
No impact on your existing accounting practices
Better reporting that serves both operations and finance teams

Example: How it works in practice

Let's say you purchase various items that all fall under GL Code 461 (Printing & Stationery):

Purchase Categories might include:

Business Cards
Envelopes
Printer Paper
Branded Stationery
Marketing Brochures
Office Forms

In your reports:

Finance view: All expenses roll up to GL 461
Operations view: See exactly how much spent on each category
Strategic insight: Identify which stationery items consume the most budget

This granularity helps you make informed decisions without changing your accounting structure.

The preset GL codes

OmniPATH comes pre-configured with these GL codes, each supporting multiple purchase categories:

Cost of Sales

310 - Cost of Goods Sold: Direct costs of products/services sold
630 - Inventory: Stock and inventory purchases

Sales & Marketing

400 - Advertising & Marketing: All promotional activities

Professional Services

401 - Audit & Accountancy Fees: Financial and audit services
412 - Consulting: Business consulting and advisory
441 - Legal Expenses: Legal services and fees

Facilities & Operations

408 - Cleaning: Cleaning services and supplies
445 - Light, Power, Heating: Utilities
465 - Rates: Property rates and taxes
469 - Rent: Property rental costs
473 - Repairs & Maintenance: Facility upkeep

Office & Administration

461 - Printing & Stationery: Office supplies
463 - IT Software and Consumables: Technology costs
710 - Office Equipment: Office furniture and equipment
720 - Computer Equipment: IT hardware

Transport & Logistics

425 - Postage, Freight & Courier: Shipping and delivery
449 - Motor Vehicle Expenses: Vehicle costs
493 - Travel - National: Domestic travel expenses

Communication & Entertainment

489 - Telephone & Internet: Communication costs
420 - Entertainment - 100% Business: Fully deductible client entertainment
424 - Entertainment - 0%: Non-deductible entertainment

People & HR

477 - Salaries: Payroll and compensation
480 - Staff Training: Employee development

Financial & General

404 - Bank Fees: Banking charges
433 - Insurance: All insurance policies
429 - General Expenses: Miscellaneous costs

How to review and update categories

Reviewing your categories

Navigate to Settings > Organisation Settings > Supplier Categories in your OmniPATH dashboard
Review the list of 100+ pre-configured categories
Check the GL code mappings for each category
Identify any categories that need adjustment
There are 48 GL Codes listed in total so there are more to choose from if you need to

Updating category mappings

If you need to change which GL code a category maps to:

Click the category name you want to update
Choose the new GL code from the dropdown
Save your changes
The update applies to future transactions only (unless the data is output again from the system)

Adding Custom Categories

If our 100+ categories don't cover a specific need:

Click '+' button in the top right hand corner
Name your category (use clear, business-friendly language)
Select the appropriate GL code it should map to
Add a description to help users understand when to use it
Save and the category becomes available immediately

Why this matters

For operations teams

Granular visibility into spending patterns
Identify cost-saving opportunities at a detailed level
Better budget planning based on actual category spending
Supplier performance analysis by category

For finance teams

Accurate GL coding automatically maintained
Clean data export to accounting systems
Audit trail showing category-to-GL mappings
Compliance with chart of accounts

For leadership

Strategic insights into organisational spending
Benchmark spending across categories
Data-driven decisions on vendor consolidation
Clear reporting that bridges operations and finance

The bottom line

Categories are a powerful feature that enhances your financial visibility without disrupting your accounting practices. They provide the operational detail your business needs to manage spending effectively, while seamlessly integrating with your existing chart of accounts.

Key takeaway: Think of GL codes as the "what it is for accounting" and categories as "what it actually is for your business." Together, they give you the best of both worlds.

Need Help?

If you need assistance with:

Reviewing your category mappings
Creating custom categories
Understanding which category to use
Setting up category-based reporting

Contact our support team and we'll help you optimise your categorisation system for your specific needs.

Experience procurement automation that's loved by operations and trusted by finance.