When you are using Open, all transactions will be auto-categorized under relevant accounts that have been created via ‘Collect & ‘Pay’. If you haven’t chosen any category, some of these may remain uncategorized. This means you don’t necessarily need to create manual accounting entries for everything.
However, when needed, you can edit most of these transactions via the ‘Transactions’ tab or while creating invoices/bills or transferring money.
Proper categorization helps you get proper & accurate accounting reports. This, in turn, lets you know where your business is heading.