Business Categorization

Now that you've connected your data sources with Hurdlr's Expense Tracking API, you're ready to start leveraging all of the Expense Tracking features that Hurdlr has to offer, including Business & Tax Categorization.

1. How it works

Through Hurdlr's Plaid or MX integration, your user's transactions are pulled into Hurdlr as soon as Plaid makes them available. All of those transactions are then run through Hurdlr's proprietary algorithms, which leverage the user's business type, accountant best practices, and the behavior of similar businesses within the Hurdlr app's 700k+ users. The expense transactions are then categorized in three primary ways:

a) Business Categories: Hurdlr uses categories specific to the user's business, which a non-accountant business owner can understand. For example, an Uber driver's expense might be categorized as "Car Wash".

b) Tax Categories: All expenses are also mapped to a tax category, which ultimately maps to specific line items on the 1040 Schedule C, 1065, and 1120S.

c) Deduction Confidence: Based on the user's business type and many other factors, Hurdlr's algorithms predict whether any given expense is deductible.

2. Getting the user's expenses

First, you should retrieve a list of the user's expenses. Be sure to include that user's access_token in the headers.

curl \
  --request GET \
  --url https://sandbox.hurdlr.com/rest/v5/expenses/expenses?lastUpdatedDate=1970-01-01 \
  --header 'Authorization: Bearer ${access_token}' \
  --header 'Content-Type: application/json' \

📘

lastUpdatedDate

On any given endpoint, if you populate the lastUpdatedDate URI parameter, the Hurdlr API will only return the records that have been updated since that date/time. Since users often have many transactions, to optimize performance we recommend setting lastUpdatedDate to the last time that you initiated the same GET request; if this is your first request on behalf of a given user, simply pass in "1970-01-01". The response will contain a lastUpdatedDate, which we recommend you store in your DB, so that you can use that as an input parameter on your subsequent requests.

The response from GET /expenses contains an array of the user's expenses:

{
  "data": [
    {
      "id": 1118496,
      "type": "PENDING",
      "date": "2020-08-27 00:00:00.000",
      "amount": 500.39,
      "categoryId": 13325612,
      "personalCategoryId": 233391,
      "confidence": "QUESTIONABLE",
      "vendorName": "United Airlines",
      "vendorId": 237791,
      "businessId": null,
      "clientId": null,
      "description": "",
      "apiExpenseId": "VDAx5DKlNLhad1r5p6bQtk58X1kwrbC9ddPyK",
      "apiName": "PLAID",
      "apiAccountNo": "0000",
      "apiAccountName": "Plaid Checking",
      "apiInstitutionId": "ins_127989",
      "plaidItemAccountId": 120693,
      "bankDescription": "UNITED AIRLINES X234X CHARGE",
      "lastUpdatedDate": "2020-08-27T01:09:17.000Z"
    }
  ],
  "lastUpdatedDate": "2021-09-01T15:37:40.107Z"
}

On each expense, you may find the following attributes to be of particular interest:

Additionally, several attributes to help you or your user identify a bank transaction are listed below:

3. Identifying a transaction's business categorization

On each expense transaction, you will see a categoryId field, which maps to one of Hurdlr's business-specific expense categories. To pull a user's business expense categories, you can make the following GET call. Be sure to include that user's access_token in the headers.

curl \
  --request GET \
  --url https://sandbox.hurdlr.com/rest/v5/expenses/categories?lastUpdatedDate=1970-01-01 \
  --header 'Authorization: Bearer ${access_token}' \
  --header 'Content-Type: application/json' \

The response from GET /expenseCategories contains an array of the user's expense categories:

{
  data: [
    {
      "id": 1,
      "name": "Accounting / Tax",
      "taxCategory": {
        "id": 11,
        "name": "LEGAL_AND_PROFESSIONAL_SERVICES",
        "displayName": "Legal and Professional Services",
        "form1040SchedCLineNumber": "17",
        "form1040SchedCDisplayName": "Legal and Professional Services",
        "form1065LineNumber": "20",
        "form1065DisplayName": "Other deductions (attach statement)",
        "form1120SSLineNumber": "19",
        "form1120SDisplayName": "Other deductions (attach statement)",
        "t2125LineNumber": "8860",
        "t2125DisplayName": "Professional fees (includes legal and accounting fees)",
      },
      "hasChilds": false,
      "parentCategoryId": 70,
      "status": "ACTIVE",
      "lastUpdatedDate": "2021-08-13T22:14:23.000Z"
    }
 ],
 "lastUpdatedDate": "2021-08-27T15:37:40.107Z"
}

On each business expense category, you may find the following attributes to be of particular interest:

The name of each expense category is specific to the user's business type, which will make sense to a non-accountant business owner. For example, an Uber Driver will have an expense category of "Car Wash". Of course, the Hurdlr API also takes care of mapping that to the proper tax categories, without the user having to think about that.

4. Classifying expense transactions

Pending expenses, i.e. expenses with type == "PENDING", are expense transactions that your user has not yet approved. Once they have been approved, they will be included in all the tax estimates, financial reporting, and other features that the Hurdlr API offers.

You should update the following fields on an expense object when approving a pending expense:

To approve the pending expense, simply POST the updated expense's JSON object to the /expense endpoint:

curl \
  --request POST \
  --url https://sandbox.hurdlr.com/rest/v5/expenses/expense \
  --header 'Authorization: Bearer ${access_token}' \
  --header 'Content-Type: application/json' \
  --data '{
    "expense": {
      "id": 1118496,
      "type": "BUSINESS",
      "businessId": 416080,
      "clientId": 805609,
      "date": "2020-08-27 00:00:00.000",
      "amount": 500.39,
      "categoryId": 13325612,
      "personalCategoryId": "233391",
      "vendorId": 237791,
      "description": "Flight to meet with Bill Tanner"
    }
  }'

Of course, users can make mistakes or change their mind, and the Hurdlr API makes it easy for you to allow those updates. To update a classified expense, simply update the expense's JSON object again as needed, and POST it to the /expense endpoint like we did above.