> ## Documentation Index
> Fetch the complete documentation index at: https://docs.arcuserp.com/llms.txt
> Use this file to discover all available pages before exploring further.
# Categorization Rules
> Use Categorization Rules settings to review GL auto-categorization, create priority rules, accept suggested rules, manage MCC defaults, review vendor suggestions, and audit how transactions were categorized.
Categorization Rules help Arcus choose GL accounts for imported and reviewed
financial activity. Treat them as accounting controls. Test rules before bulk
applying them to history.
## Open Categorization Rules
1. Open **Settings**.
2. Choose **Entity Settings**.
3. Open the **System** group.
4. Choose **Categorization Rules**.
## Read The KPI Cards
The cards at the top give accounting a quick health check.
* **Active Rules**: rules currently eligible to categorize transactions.
* **Suggestions**: rule ideas Arcus detected from recent manual overrides.
* **Vendor Signals**: merchants that look like repeat vendors and may need vendor accounts.
* **Average Confidence**: recent confidence score from the audit trail.
Low confidence does not mean the system is broken. It means accounting should
review recent categorization decisions and tune the rule set.
## Rules Tab
Rules are priority-based. Arcus checks the highest-priority rule first, then
continues down the list until it finds a match.
A rule usually includes:
* Name and description.
* One or more conditions, such as merchant, text, amount range, MCC, or resource type.
* One or more GL actions.
* Active or disabled state.
* System flag when the rule is protected.
Use row actions to edit, test, bulk apply, disable, enable, or delete a custom
rule. System rules can be disabled when allowed, but they cannot be deleted.
## Create A Rule
1. Click **New Rule**.
2. Enter a name that explains the accounting purpose.
3. Add conditions that are specific enough to avoid accidental matches.
4. Choose the GL account action.
5. Save the rule.
6. Test the rule against history.
7. Move the rule priority if it should run before or after another rule.
**Rule priority matters**
A broad rule near the top can capture activity that should have matched a more
specific rule below it. Keep broad fallback rules lower in the list.
## Test A Rule
Use **Test** before applying a rule broadly. Testing shows how the rule behaves
against historical activity without changing those records.
Review:
* Number of matches.
* Merchant and description patterns.
* Amount range.
* Suggested GL account.
* Any records that should not be included.
If the test catches too much, tighten the condition before enabling or bulk
applying the rule.
## Bulk Apply
Bulk apply updates historical eligible records that match the rule. Use it only
after the rule has been reviewed.
Before bulk apply:
1. Test the rule.
2. Review the sample matches.
3. Confirm the accounting period policy allows the change.
4. Confirm the GL account is correct.
5. Run the bulk apply only for the intended scope.
6. Review the audit trail afterward.
## Suggested Rules
Suggested Rules appear when Arcus sees repeated manual overrides for the same
merchant or pattern. Accepting a suggestion creates an active rule.
Use suggestions as a starting point, not an automatic approval. Review the
merchant name, suggested GL account, override count, first seen date, and last
seen date before accepting.
## MCC Defaults
MCC Defaults map merchant category codes to default GL accounts. They are useful
when a bank transaction has a clear MCC but no specific vendor rule yet.
Use MCC defaults for broad category handling. Use explicit rules for merchants
that need their own accounting treatment.
## Vendor Suggestions
Vendor Suggestions identify recurring merchants that may deserve vendor accounts.
From this tab, accounting can create a vendor or dismiss the suggestion.
Create a vendor when the merchant should appear in AP, vendor reporting, or
future bill and payment workflows. Dismiss a suggestion when the merchant should
stay as bank activity only.
## Audit Trail
The Audit Trail shows how recent resources were categorized. Use filters for
resource type, source, and date range.
Sources can include:
* Rules engine.
* MCC default.
* User override.
* Suggestion-based categorization.
Audit rows help answer why a transaction landed on a GL account and whether the
team should adjust a rule.
## Common Blocks
* **Rule did not match**: check rule priority, active state, condition values, and whether another rule matched first.
* **Rule matched too much**: add more specific conditions or lower the priority.
* **Bulk apply is risky**: test against history and review period controls before applying.
* **Suggestion looks wrong**: dismiss it or create a narrower rule manually.
* **MCC default is too broad**: use an explicit merchant rule instead.
* **Vendor suggestion should not become AP vendor**: dismiss the signal and leave it as bank activity.
## Related Articles
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