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Tagging Guidelines & Best Practices
Tagging Guidelines & Best Practices

Understanding best practices with the tagging process will allow for more organized cash flow analysis, reporting, and forecasting

David Taylor avatar
Written by David Taylor
Updated over a week ago

Why Are Tags Important?

Tagging helps users create bucketed cash flow categories (AR, AP, Taxes, Payroll, etc.) that can be used in analysis, reporting, and forecasting. It's crucial that users take some time identifying the cash flow categories that they'd like to report and forecast on in Trovata. With that direction, users will have a better understanding of the tags they should build out.

What Are Tags?

Tags are unique identifiers created by users to identify specific transactions within a period of time, historically, or going forward, based on specific criteria.

How Do I Decide What to Tag?

Tag structures often differ between industries and business types, but we recommend to start with a simple hierarchy where each child tag is mapped to a parent “cash category” tag. It’s helpful to work backwards, review your current reporting, and think about these questions:

  • Are there specific reports that your team is manually pulling together based on specific transaction types?

  • Are you manually tracking activity?

  • Is management trying to understand relationships with specific vendors or customers?

General Tagging Guidelines

  • Transactions that are important for detailed reporting should be tagged on a granular level. Transactions that you'd like to capture in reports, but are not needed in extreme detail can be looped into an "Other" type tag

  • You can have an unlimited amount of tags

  • Tag names are required and have no character limit. Tag descriptions are not required.

  • Child Tags are related subcomponents of Parent Tags. They also organize transaction data into the most granular level of detail - sometimes only including one transaction

  • Parent Tags are created to consolidate similar tags into a larger cash category. In other words, they are simply a group of Child Tags (and may exclude some tags as well)

  • There is no limit to the amount of Parent-Child layers you can create, but generally it's best to keep it simple with two to three layers

Top 5 Tagging Best Practices

1- Tag Hierarchy

Tags are built in a hierarchical structure, made of Child Tags, Parent Tags, Grandparent Tags, etc. Child Tags organize transaction data into the most granular level of detail, and can be made up of multiple strings of data. Parent Tags are created to consolidate Child Tags into a larger cash category. In other words, they are simply a group, or subtotal, of Child Tags. See the example hierarchy below:

2 - Tag Naming and Formatting Conventions

When it comes to naming tags, you want to make sure that their content and nature are easily identifiable.

  • Parent Tags that are a sum of one or more Child Tags should indicate that they are a total. In the example above, the Parent Tag (AR - Total) consists of two Child Tags (AR - Other and AR - Top 5 Customers).

  • Users can also indicate a total using special characters, such as using a " * " or " $ " in front of the tag name. This also makes it easier to find these tags when utilizing the Analysis, Reporting, Reconciliation, and Forecasting modules.

  • Parent Tags are built by using one or more [Tag / IS / "Tag Name"] property/operator/value combinations.

  • Using dashes (-) is a way to help keep tag names organized, concise, and consistent across the board.

3 - Creating “Other” Buckets (I.e. Top 5 AR and AR - Other)

Users can capture multiple slices of data (i.e. high value customers and/or vendors) within one tag by leveraging OR statements, instead of being forced to tag all unique transactions separately. To save time on tagging these large buckets of transactions, it’s recommended to first tag your top 5 customers/vendors (this number is just a suggestion, it can be any number) and then make an “Other” bucket for the rest of your AR/AP. This AR - Other tag, for example, would filter for any account(s) that house AR transactions/inflows and would exclude the Top 5 Customers tag using the [Tag / IS NOT / "Tag Name"] property/operator/value combination. It would also exclude any other tags that include transactions that flow into those accounts that aren’t actually AR (i.e. Lockbox Deposits, AMEX, Book Transfers, and ZBAs). In this way, instead of tagging every AR transaction, you can work backwards to capture an AR - Other total.

4 - Untagged Transaction Process Flow / Audit of Untagged Transactions

Using the “Untagged” column section in the Transactions module is the most efficient way to keep track of the transactions that haven’t yet been categorized. Note that tags can be created in this column section which will update the untagged transaction count accordingly after saving.

5 - Zero Balance, Sweeps, Intercompany, Transfers and Funding Tags

All ZBA, Sweep, Intercompany, Transfers, and Funding transactions should be tagged and in some cases excluded from other Parent Tags to ensure they aren’t impacting the true totals of other tags (i.e AR/AP). Keep in mind that all institutions will provide different description details which can impact the tagging logic when creating these types of tags.

  • Zero Balance Account (ZBA) Tags are tags typically identified by typing "ZBA", "Zero Bal", or "Zero Balance" in the search bar.

  • Sweep Tags are tags typically identified by typing "Sweep" in the search bar.

  • Intercompany (IC) Tags are tags typically identified by typing "Intercompany", "Pooling", or "Offset" in the search bar.

  • Funding Tags are tags typically identified by typing "Funding" in the search bar.

Commonly Tagged Transaction Categories

Generally speaking, there is no one-size-fits-all approach to structuring tags, since every company has a unique way of identifying their cash flow activity. That said, we've shared an example tag structure in this linked article that can be molded to your specific business.

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