QuickBooks offers a feature called Classes that allows you to group items and transactions to suit the reporting you want to do. Think of this feature as a way for business practices to be “classified.” To use classes, the function mentioned in the Accounting section of the Preferences window must be allowed.
Why Should you Configure Classes?
Some of the reasons why classes can be configured include:
- Divisional or departmental reporting.
- Reporting by the enterprise’s form (perhaps you have both retail and wholesale businesses under your company umbrella).
- They are reporting if you have more than one workplace, by the venue.
For a single reason, you can use classes; otherwise, the function won’t work correctly. You may use classes, for instance, to divide the organization into locations or departments, but don’t try to do both.
QuickBooks service adds a class field to your transaction windows when you allow classes. You can allocate one of them to that field after you build your classes.
What advantages would class monitoring have?
Without having to build special QBO accounts, ClassClass offers a way to differentiate the business lines. The class enables you to independently display profitability for each operation line, removing manual manipulation of reports to take the data out.
To build a class, from the QuickBooks tool menu bar, select Lists. | Class List to display a Class List window. (Remember that to access the Class Lists menu item, you must allow Classes in Preferences.) To add a new class, press Ctrl-N. In the New Class tab, fill in the name of the ClassClass. To add another class, click Next, or if you are done, click OK.
Creating a class called Overhead is a smart idea. When there is no relation to one of your entire groups, you can sort transactions logically.
Using a Class in a Transaction
Each transaction window provides a class entry field when you enter transactions. A Class field at the top (next to the Customer: Job field) is added to the invoice form to allow you to allocate the invoice to a class. It is more useful, however, to connect a class to each line of the invoice object. You must configure your invoice forms to include classes as a column to achieve this.
When you add the Class column, add it to the screen form, but not the written form. It doesn’t matter to the clients (and it’s none of their business anyway).
Reporting by Class
For classes, there are two types of reports you can run:
- Reports on all classes
- Individual class reports
Follow these necessary steps to report on a single class:
- Open the list of classes and pick the ClassClass that you want to report to.
- To open the Quick Report on the ClassClass, press ctrl-q.
You may adjust the date range or configure the report as necessary when the Class Quick Report appears. To see a report that uses all classes, open the Classes tab, and then press the Reports button at the list window’s bottom. Select All Class Reports and then pick either Benefit & Loss By Class or Graphs. An Income & Expenditures Graph or a Budget against an Actual Graph is given in the Graphs menu item.
Except that each Class uses a different column, the Profit as well as Loss By Class report is similar to a regular Profit & Loss report. For your company, the Totals column delivers the usual P&L details. A graph for Income & Expenses sorted by ClassClass may also be shown, or one that compares the budget against actual figures sorted by ClassClass.
Customizing Other Reports for Class Reporting
It is also possible to configure many of the reports you run daily to report class details (aging reports). To add all, any, or one ClassClass to the information, use the Filters tab.
What classes should be:
There should be both income and cost transactions associated with the categories you use for class monitoring. There should be large permanent categories that define distinct divisions, unique cost centers, or specific business lines (i.e., customer types, product types, etc.).
What classes should not be:
Granular temporary categories should not be included, such as a conference attended (track these in projects). Classes should also not be departments that do not produce money, i.e., ads, admin, etc. Those types of departments should be recorded in roll-up accounts in the accounts table.
The above blog helped you set up QuickBooks Class. After buying QuickBooks, you can take advantage of this feature immediately. In QuickBooks, class monitoring makes your accounting simpler and saves you time.