How to Structure Categories, Locations, and Departments

How to structure categories, locations, and departments

Three structures, three questions. Keeping them separate is the single most valuable structural decision you will make.

An asset has all three, set independently.

Categories carry the money

This is the part people miss. A category carries depreciation configuration — method, useful life, rate, residual value percentage, and MACRS property class.

Financial treatment is declared once per class of asset rather than per asset. An asset with no category has no depreciation configuration and therefore no net book value.

So the right question when designing categories is: do these things share a financial treatment?

Categories can also carry preventive maintenance rules that apply to every asset in them, including assets added later. One rule on "Fire Extinguishers" covers every extinguisher you will ever add. This is the highest-leverage thing categories do.

Filtering includes descendants

Filtering on a category returns everything beneath it — filtering "IT Equipment" returns the laptops under "IT Equipment → Portable → Laptops".

The same applies to locations. You never have to select every child.

Keep them apart

The failure mode is encoding one structure inside another.

Every time you combine two dimensions into one, you lose the ability to ask about either independently.

Depth

Two to four levels covers most organizations, for both categories and locations.

The test: if nobody will ever filter at a level, that level does not need to exist.

Depth you do not need costs you on every asset form, because someone has to pick the right leaf.

Start small

You do not need the finished structure before you add assets. Time to first asset matters more than a perfect taxonomy, and both hierarchies are easy to extend.

Start with the classes and places you actually have. Add depth when a filter you want to run is not possible.

Nothing is deleted

Categories, locations, and departments all archive rather than delete, so restructuring is reversible and history stays attributable.

Move the assets before archiving the structure they sit in.

Where custom fields fit

(Orbit and above)

When you need a dimension none of the three provide — a cost centre code, a compliance grade, a contract reference — use a custom field. They are filterable and are included in exports.

Do not build a custom field that duplicates your category tree.

A worked example

A facilities team across two sites:

Categories                Locations               Departments
HVAC                      Manchester              Facilities
 |-- Rooftop units         |-- Building A         Operations
 +-- Air handling          |    |-- Floor 1       Finance
Electrical                 |    +-- Floor 2       IT
 |-- Distribution          +-- Building B
 +-- Lighting             Leeds
IT Equipment               +-- Main Office
 +-- Portable

A rooftop unit is: category "Rooftop units", location "Manchester → Building A", department "Facilities". Each answers its own question, and none repeats another.

Related articles

• Categories, locations and departments explained
• Managing categories
• How to build a location hierarchy
• Managing departments
• Asset naming conventions
• Custom fields