Are you using QuickBooks Online for your business but struggling to keep track of your expenses and income? Setting up classes in QuickBooks Online can provide an easy solution by allowing you to categorize transactions and monitor the performance of specific areas of your business. Whether you’re a small business owner or a freelancer, setting up classes can save you time, improve your financial reporting accuracy, and help with decision-making.
Classes are a powerful tool that allows you to track different aspects of your business, such as departments, locations, products & services, and projects. You can create classes in QuickBooks Online to match the way your business operates, and assign each transaction to a class based on where it belongs. For example, if you own a retail store with two locations, you can create two classes: “Location A” and “Location B.” Then, each time you enter a sale or an expense, you can select the corresponding class to make sure you’re tracking the revenue and expenses for each location separately.
Setting Up Classes in QuickBooks Online
Classes help you track different segments or locations of your business in QuickBooks Online.
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Step-by-Step Guide to Setting Up Classes in QuickBooks Online
To set up classes, go to the Gear icon, choose Account and Settings, click on Advanced, and then turn on the Class Tracking feature.
Setting Up Classes in QuickBooks Online
One of the most important aspects of managing a company’s finances is being able to track and categorize expenses and income. QuickBooks Online offers a powerful tool called “Classes” that allows you to easily segment transactions into different categories, giving you more control and visibility into your business’s financial performance. Here is a step by step guide on how to set up classes in QuickBooks Online:
Step 1: Enable the Class Tracking Feature
Before you can create classes, you need to enable the class tracking feature in QuickBooks Online. To do this, log in to your QuickBooks Online account, go to the “Settings” menu, and click on “Account and Settings.” From there, select the “Advanced” tab, and then click on “Categories.” Finally, check the box next to “Track classes” and click “Save.”
Step 2: Create Your Classes
Once you have enabled class tracking, you can create your classes. Classes are typically used to segment transactions by department, project, location, or any other category that is important to your business. To create a class, go to the “Settings” menu again, click on “All Lists,” and then select “Classes.” From there, click on “New” and then enter the name of your class. You can also assign a parent class if you want to create a hierarchy of classes. Hit “Save” when you are finished.
Step 3: Assign Classes to Your Transactions
Now that you have created your classes, you can start assigning them to your transactions. When you create a new transaction, you will see a drop-down menu labeled “Class” on the form. Simply select the appropriate class from the drop-down menu and save your transaction. You can also assign classes to existing transactions by editing them and selecting the appropriate class.
Step 4: Run Reports Using Classes
Finally, once you have assigned classes to your transactions, you can run reports that utilize this information. QuickBooks offers several built-in reports, such as the Profit and Loss by Class report, which will show you your income and expenses broken down by class. To run this report, go to the “Reports” menu, select “All Reports,” and then find “Profit and Loss by Class” under the “Business Overview” section. You can also customize reports to include class information by creating a new report and adding the “Class” column.
Conclusion
Setting up classes in QuickBooks Online is a powerful way to track and categorize your business’s finances. By following the four steps outlined above, you can easily create classes, assign them to transactions, and run reports that show you how your business is performing by class. Take the time to set up classes in QuickBooks Online, and you will have better insight into your finances and be better equipped to make informed business decisions.
FAQ
Question 1: What are classes in QuickBooks Online, and how are they beneficial?
Answer 1: Classes in QuickBooks Online refer to a feature that helps you track transactions relating to a particular category. They allow you to segregate financial information based on different business segments, departments, or product lines, and analyze reports based on each class.
This feature is highly beneficial for businesses with diverse operations or multiple locations, as it allows you to monitor financial performance and make informed decisions. You could create classes for various aspects of your business like location, product, service, employees, etc.
Question 2: How can I set up classes in QuickBooks Online?
Answer 2: Setting up classes in QuickBooks Online is a simple process. You can do it by following these steps:
- Select the Gear icon on the top right-hand side of the screen and click on Account and Settings.
- Under Advanced, select Categories.
- Toggle on the Categories option to activate the feature.
- Choose how you want to organize your categories based on class or location.
- Click on Save to apply the changes.
- You can then create classes by going to Lists under the Gear icon and selecting Class List. Then click on New Class and fill in the necessary details.
Question 3: Can I assign classes to transactions imported from my bank account?
Answer 3: Yes, you can assign classes to transactions imported from your bank account. For this, you need to create and activate classes before you import your bank transactions into QuickBooks Online. Once imported, go to the Banking section and choose the transaction you want to assign a class to. Click on the transaction to open it, and then select the correct class from the dropdown list under the Category/Match column.
Question 4: How do I edit or delete a class in QuickBooks Online?
Answer 4: To edit or delete a class in QuickBooks Online, follow these steps:
- Go to the Gear icon at the top right corner of the screen and then select Lists.
- Select Class List.
- Find the class you want to edit or delete and select the drop-down menu located on the right-hand side.
- If you want to edit the class, click on Edit. Edit the necessary details and click on Save.
- To delete a class, click on Delete and confirm the deletion.
Question 5: Can I add a class to a transaction that I have already entered in QuickBooks Online?
Answer 5: Yes, you can add a class to a transaction that you have already entered in QuickBooks Online. Go to the transaction and click on the Edit button. Select the correct class from the dropdown menu under the Category/Match column, and then click on Save.
Question 6: How can I run a report that shows transactions by class?
Answer 6: Running a report that shows transactions by class is easy. Here are the steps:
- Click on Reports on the left-hand navigation bar.
- Select the All Reports option.
- Under the Business Overview section, click on the one that says Profit and Loss by Class.
- You can then adjust the filters and customize the report based on your requirements.
Question 7: Can I import my class list from an Excel spreadsheet into QuickBooks Online?
Answer 7: Yes, you can import your class list from an Excel spreadsheet into QuickBooks Online. For this, you need to format your Excel file correctly and map the columns to the corresponding fields in QuickBooks Online. Follow the prompts in the import wizard to complete the process successfully.
Question 8: How many classes can I create in QuickBooks Online?
Answer 8: In QuickBooks Online, you can create a maximum of 40 classes. If you need to track more than 40 segments, you can consider using another method, such as location tracking.
Question 9: Can I use classes to track employee hours and paychecks?
Answer 9: No, classes cannot be used to track employee hours and paychecks in QuickBooks Online. For that, you need to use the Payroll feature and create timesheets for your employees.
Question 10: Can I assign more than one class to a transaction?
Answer 10: Yes, you can assign more than one class to a transaction. This is known as class tagging. To do this, go to the transaction you want to tag and click on the Category/Match column. Select the option to add a new class and then enter the needed details. Repeat the process to tag more classes to the same transaction.