Setting up classes in QuickBooks Online allows you to categorize transactions and track expenses by departments, projects, or locations. This makes it easier to analyze your financial data and make business decisions based on the performance of each category. Whether you are a small business owner or an accountant assisting clients, understanding how to set up classes in QuickBooks Online is essential for proper financial management.
To set up classes, go to the Gear Icon and select Account and Settings. Click the Advanced tab and turn on the “Track classes” feature. You can then create new class categories and subcategories based on your business needs. For example, if you have a retail store with multiple locations, you might create classes for each store location and subcategories for each department within the store. The image below shows an example of how classes could be set up for a construction company.
By tracking classes, you can easily generate reports and track expenses for each category. This helps you understand which areas of your business are generating the most revenue and where you might need to cut expenses. In addition, if you have multiple clients, you can use classes to track each client’s financial data separately. This makes it easier to provide each client with customized financial reports that are tailored to their business needs.
Overall, setting up classes in QuickBooks Online is a simple but essential step for effective financial management. By taking the time to set up classes and track expenses accordingly, you can make better business decisions and keep your financial data organized and easy to analyze.
Setting Up Your Classes in QuickBooks Online
Categorize your products or services into classes for easier organization and accounting.
Creating New Classes in QuickBooks Online
Customize your classes by adding a name, description, and sub-classification to fit your business needs.
Assigning Classes to Your Transactions in QuickBooks Online
Easily assign classes to your transactions and run reports based on your classes for better financial insights.
What is Class Tracking in QuickBooks Online?
Class Tracking is a feature in QuickBooks Online that allows you to define and track different segments of your business. It is especially useful for businesses that have multiple departments or locations, or those that offer different types of products or services. By setting up classes, you can keep track of income and expenses for each segment separately, which makes it easier to analyze your business data and make informed decisions.
How to Set Up Classes in QuickBooks Online
Setting up classes in QuickBooks Online is a simple process. Here are the steps you need to follow:
1. Log in to your QuickBooks Online account.
2. Click on the gear icon in the upper-right corner of the screen.
3. Select “Account and Settings” from the drop-down menu.
4. Click on the “Advanced” tab.
5. In the “Categories” section, click on “Track Classes.”
6. Click on the “ON” button to enable class tracking.
7. You can now add your classes by clicking on the “New” button and entering the name and description of each class.
8. Once you have added all your classes, click on “Save.”
Your classes are now set up, and you can start using them to track income and expenses in QuickBooks Online.
How to Assign Classes to Transactions
After you have set up your classes in QuickBooks Online, you can assign them to transactions. Here’s how:
1. Create a new transaction in QuickBooks Online.
2. In the transaction window, you will see a “Class” field. Click on the drop-down arrow and select the appropriate class from the list.
3. Complete the rest of the transaction details as usual.
4. Click on “Save.”
The transaction is now assigned to the selected class. You can view reports by class to see the income and expenses associated with each segment of your business.
Benefits of Using Classes in QuickBooks Online
There are several benefits of using classes in QuickBooks Online. Here are some of the most important ones:
1. Improved accuracy: By using classes to track income and expenses, you can get a more accurate picture of the financial performance of each segment of your business.
2. Better decision-making: With detailed reports by class, you can make informed decisions about how to allocate resources and where to focus your efforts.
3. Simplified tax preparation: If you have to file separate tax returns for different segments of your business, classes can make it easier to ensure that each return is accurate.
4. Time-saving: With QuickBooks Online, you can automate the process of assigning classes to transactions. This saves you time and ensures that the process is consistent.
Overall, using classes in QuickBooks Online can help you run your business more efficiently and effectively.
Class Tracking is a powerful feature in QuickBooks Online that allows you to divide your business into segments and track income and expenses for each segment separately. By following the steps outlined in this article, you can set up classes in QuickBooks Online and start reaping the benefits of this feature. Whether you have multiple departments, locations, or product lines, class tracking can help you make informed decisions and run your business more efficiently.
Question 1: How do I set up classes in QuickBooks Online?
Answer: To set up classes in QuickBooks Online, you need to go to the gear icon on the top right corner and select “Account and Settings”. Then, click on “Advanced” and select “Categories”. From there, you can turn on classes and create them according to your business needs. Classes can help you to track expenses and revenue by location, department, product type, or any other relevant criteria.
Question 2: Can I assign multiple classes to a transaction in QuickBooks Online?
Answer: Yes, you can assign multiple classes to a transaction in QuickBooks Online. This can be useful when you have a transaction that applies to more than one category or location. To do this, simply select all the relevant classes when creating the transaction, and the system will divide the amounts accordingly based on the percentage you assign to each class.
Question 3: What is the difference between classes and locations in QuickBooks Online?
Answer: Classes and locations are both used to categorize transactions in QuickBooks Online, but they serve different purposes. Classes are used to track expenses and revenue by type of product, department, project, or any other relevant criteria. Locations are used to track expenses and revenue by physical location, such as store branches or warehouses.
Question 4: How do I add a new class in QuickBooks Online?
Answer: To add a new class in QuickBooks Online, go to the gear icon on the top right corner and select “All Lists”. Then, select “Classes” and click on “New”. Enter the name and any other relevant information about the class, and then save it. You can now assign this class to transactions in QuickBooks Online.
Question 5: Can I import classes into QuickBooks Online from a spreadsheet?
Answer: Yes, you can import classes into QuickBooks Online from a spreadsheet. To do this, go to the gear icon on the top right corner and select “Import Data”. Then, select “Classes” and follow the instructions to map your spreadsheet columns to the QuickBooks Online fields. Once you have reviewed and confirmed the data import, the system will create the new classes in QuickBooks Online.
Question 6: How many classes can I have in QuickBooks Online?
Answer: There is no limit to the number of classes you can have in QuickBooks Online. However, it’s important to keep in mind that having too many classes can make your chart of accounts more complex and difficult to manage. It’s recommended to keep your classes to a manageable number that reflects your business needs.
Question 7: Can I edit or delete a class in QuickBooks Online?
Answer: Yes, you can edit or delete a class in QuickBooks Online. To do this, go to the gear icon on the top right corner and select “All Lists”. Then, select “Classes” and click on the class you want to edit or delete. To edit the class, click on “Edit” and make the necessary changes. To delete the class, click on “Delete” and confirm the action. Note that if the class has been used in any transactions, you may need to edit or delete those transactions first.
Question 8: How do I assign a class to a transaction in QuickBooks Online?
Answer: To assign a class to a transaction in QuickBooks Online, simply select the appropriate class from the “Class” drop-down menu when creating the transaction. You can assign a class to any type of transaction, including sales, expenses, and invoices. Once you have saved the transaction, the system will automatically categorize it according to the assigned class.
Question 9: Can I run reports based on classes in QuickBooks Online?
Answer: Yes, you can run reports based on classes in QuickBooks Online. This can help you to analyze your business performance by department, product type, location, or any other relevant criteria. To run a report based on classes, go to the Reports menu and select the report you want to run. Then, select “Customize” and choose the “Classes” option under the “Rows/Columns” section. The report will now show the data broken down by class.
Question 10: Do I need to set up classes in QuickBooks Online?
Answer: No, you don’t necessarily need to set up classes in QuickBooks Online. Classes are an optional feature that can help you to better track your business transactions according to your specific needs. If your business is small or simple, you may not need to use classes at all. However, if your business has multiple locations, departments, or products, classes can be a useful tool to help you to analyze your financial data more accurately.