Are you accurately tracking your income and expenses?
Many users do not take full advantage of the countless features QuickBooks Online offers to help businesses track their income and expenses. Starting the new month, quarter, or year with fresh features at your disposal can make for an informative and potentially more profitable business. Why? It’s simple. Accurately tracking your income and expenses can lead to lowered costs and increased profit. Classes are just one of the features in QBO that can help you achieve this.
What are “Classes?”
Classes allow you to view income and expenses for individual revenue streams in a business and can be used on Profit & Loss statements. One caveat is that when you start a Class, every transaction in this category will need a Class.
Here are some specific examples of how to utilize Classes…
1. Businesses with distinct locations, e.g., offices, cities, or countries
In this situation, setting up Classes will allow you to track products and services in distinct locations.
2. Property management companies with separate rental units
Units in each building can be assigned to a Class. Rental properties often receive bills from suppliers that cover more than one unit. In this case, the ability to use Classes can be quite useful, as you can assign each line item on the bill to a different unit.
3. Businesses that offer different service lines or product lines
Classes can be used to track different types of services, e.g., a web developer who offers web design, web hosting, and consultations. Another example of this would be a photographer who offers portraits, wedding photography, and corporate materials. In this case, the photographer could set up Classes for each of these divisions. A third example would be a retailer who sells both clothing and shoes and might want to track the sales and purchases for each but separately.
4. A business that needs to track transactions by different sales representatives
QBO doesn’t specifically have sales representatives as a tracking mechanism. However, you can add a custom field if you are not using Classes for anything else. We usually recommend setting up a separate Class for the salesperson, as this allows you to see a Profit & Loss statement rather than just a list of their sales.
After setting up specific Classes, you can run reports with these customizations and view this info in the Business Overview Screen in QBO. Overall, keeping excellent records and being able to run these reports enables you to “run your business and not let your business run you.”
Have questions about QuickBooks Online? Or want to schedule a consultation? Feel free to contact our Business Services Team. Click here for contact information. Or click here to learn more about our Business Services.
Blog by Penny Snyder – Business Accountant
Learn more about Penny and the rest of the Storen Financial team here.