What is this page about: This page explains how Light's AI reads a receipt and picks a category, how to correct it when it gets one wrong, and how to steer the AI so it improves over time. It also covers how categories map to GL accounts, how custom categories work, and how submitted expenses get checked against company policy.
On this page
- How AI categorization works
- Reimbursement categories explained
- Reviewing and overriding a suggestion
- How GL accounts and tax codes get assigned
- Merchant recognition
- Guiding the AI
- Creating custom categories
- Policy checks on submission
- Splitting one expense across categories
- Related articles
Light's AI reads every receipt you submit, matches it to one of your company's reimbursement categories, and assigns the GL account and tax code automatically. Your team reviews the exceptions instead of coding every expense by hand.
How AI categorization works
When you submit a receipt, Light's AI works through it in five steps:
- Reads the receipt. It pulls the merchant name, line items, amounts, date, and location directly from the image or PDF.
- Identifies the merchant. It extracts the merchant name and website domain. When it recognizes the merchant, it adds a clean display name and logo automatically.
- Predicts the category. It matches the expense to one of your company's reimbursement categories, using the Context you've written for each category plus your country, user group, and cost center.
- Assigns the GL account and tax code. Whichever category it picks determines the GL account, and the tax code if one is set on that category.
- Shows its reasoning. For every value it fills in, it records why it chose that value and where on the receipt it found it.
If the AI can't confidently determine a value, it leaves the field blank rather than guessing. This applies to individual fields (like the amount or date) and to the category itself. If nothing matches well, no category is suggested and you pick one yourself.
Reimbursement categories explained
Categories in Light are your company's reimbursement categories, set up at Settings → Reimbursement category. Each one has:
- Category name: what the employee sees ("Travel", "Meals & Dining")
- GL account: where expenses in this category post
- Tax code (optional): the tax code applied to expenses in this category
- Context (optional, 200 characters max): a description that guides the AI when it's matching receipts to this category
- Entities: which of your company entities the category applies to
Alongside the category, the AI also assigns one or more spending tags, covering things like travel, meals, IT hardware, software subscriptions, and training. A single expense can carry several tags at once if it spans more than one area.
You can add categories specific to your business at any time. See Creating custom categories below.
Reviewing and overriding a suggestion
After you upload a receipt, Light parses it and pre-fills a draft expense with the suggested category, merchant, amount, date, and description.
If the suggestion is right: submit the expense as it is.
If the suggestion is wrong:
- Open the draft expense and select the category field.
- Browse or search the available categories.
- Select the correct one.
- To help the AI get it right next time, add guidance to that category's Context field at Settings → Reimbursement category.
The AI takes its steer from the Context written on each category, so that is where a lasting improvement comes from. Update the Context and every later receipt is matched against the new wording.
How GL accounts and tax codes get assigned
Each reimbursement category maps to exactly one GL account and, optionally, one tax code. For example:
- Travel → 6100 Travel Expenses
- Meals → 6200 Meals & Entertainment
When you categorize an expense, Light assigns the GL account based on the category and shows it on the expense record, so your finance team can see which account the expense will post to. You can override the GL account on the expense line if needed.
Merchant recognition
Light's AI extracts the merchant name and website domain directly from the receipt. When it finds a domain, it enriches the merchant with a clean display name and logo.
If the AI can't determine the merchant from the receipt, the field is left blank and you fill it in manually.
Guiding the AI
You steer the AI in three ways:
- Category Context. Describe what belongs in each category at Settings → Reimbursement category. The AI checks this every time it matches a receipt to a category.
- AI prompting and Agents. Company-level instructions for the AI assistant, set at Settings → AI prompting and Settings → Agents, applied every time a receipt is parsed.
- User context. The AI factors in your country, user groups, and cost center when it interprets receipts and matches categories.
Creating custom categories
For anything specific to your business:
-
Go to Settings → Reimbursement category.
-
Click Add category and fill in:
- Category name (e.g. "Contractor Services")
- GL account: where expenses post
- Tax code (optional)
- Context (optional, 200 characters max): what belongs here, used by the AI when categorizing
- Entities: which company entities this applies to
-
The AI includes the new category the next time it parses a receipt.
Policy checks on submission
When you submit an expense report, the Expense Submission workflow runs an AI review against your company's policies, configured at Settings → Guardrails → Policy:
- Compliant: the report is approved automatically.
- Non-compliant: the report goes to the inbox for a person to review.
See Expense Policies for how to configure policies.
Splitting one expense across categories
Some expenses span more than one category. A lunch that also covers office supplies is a common example.
Light lets you split the expense across line items, and each line can have its own category and GL account.
For a one-off expense with no obvious home, choose the closest match, or ask an admin to create a custom category for it.
Related articles
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