Category Archives: QBO

Shall I be using class or location in QBO (QuickBooks Online)?

Class is a powerful feature available in QuickBooks Online (QBO). Although originated from QuickBooks Desktop accounting system, there is a slight difference in reporting.

How to use class in QuickBooks?

You may use the class as a departmental account. Set up marketing, R&D, production, etc. as a class; then, tag it to each income or expense account when creating an invoice or bill. The profit and loss report shows the income and expense breakdown by class once the transaction saved. QuickBooks class feature is a unique way of analysing the business account and less tedious in setting up compared to the sub-ledger method used by other accounting systems.

There are many other ways of using the class feature in QuickBooks:

  • A Law firm uses the class to allocate income and expense of each lawyer.
  • Use it to track the running cost of the sales team or vehicle.
  • Property management business uses the class feature to analyse the profitability of each property.
  • Or you may use the class to track local and overseas sales.

The class feature is flexible and is up to your imagination to apply it into your business account.

QBO class or location?
Location tag to header, whereas the class tag to detail.

Each transaction consists of a header and a detail section. For payment transaction, the payee and bank are part of the header section, whereas the accounts used at the bottom of the transaction are the detail section. Each of the expense account at the detail tagged to a class, and pick up by the Profit & Loss by Class report once transaction saved. But if you print the Balance Sheet by Class from QuickBooks Online, the amount paid from the bank account will group under the unassigned classification since there is no class field available at the header. 

QuickBooks Profit and Loss by Class report
QuickBooks Profit & Loss by Class

You may consider using a location feature, for branches or retail outlets, in QuickBooks Online instead of a class. The data entered will show in both Profit & Loss and Balance Sheet.

QuickBooks Profit and Loss by Location report
QuickBooks Profit and Loss by Location

The location field is at the transaction header section, which breaks down the accounts used in both the header and detail section. Location is a better choice for businesses that have multiple branches, but you cannot have multiple locations in one transaction (at this moment). You may have to get the supplier to change the way they bill or change the internal workflow if they bill you more than one branch in a single invoice.

QBO Balance Sheet by Location
QuickBooks Balance Sheet by Location

Technology is evolving, QuickBooks introduces new feature from time to time. Who knows? Maybe someday there might be a better way of using or reporting by class and location 🙂

Discuss with your QuickBooks consultant, sign up a demo or trial to test drive before you switch over from QuickBooks Desktop to QuickBooks Online.

QuickBooks Online Singapore | Is Location better than Class?

Software: QuickBooks Online Singapore ( QBO )

You can use either Class or Location feature in QBO (QuickBooks Online Singapore) to segregate your financial report. Although both class and location looks similar, they are different. You should consider carefully before using them.

Class:

When Classes are used, they get attached to the detail portion of transactions. They do not get associated with the header accounts. Therefore, since a P&L pulls information from the transaction detail, it can be customized by Class and be correct. However, a Balance Sheet by Class report will never be correct, since it pulls data from headers. (Remember, the Class data does not get saved with the header—actually, no where can a bank account, loan account, etc., all headers, cannot be linked to a Class.)

QBO assumes that all data pertains to just one company, so it will always provide just a single Balance Sheet, and not one split in Classes.

 

Location:

Accounts Payable, Accounts Receivable and Payroll transactions may have amounts in “Unspecified” because Bill Payment, Receive Payment and Paycheck transactions can’t be split by locations.

If you have either Bill Payment, Receive Payment or Payroll transactions that involve multiple locations, the transaction will reflect “Unspecified” and will either need to be split into transactions that only involve one location or correct the location with a journal entry.

https://qboe.custhelp.com/app/answers/detail/a_id/1242/kw/1242/r_id/103898

If you just need to segregate based on a per transaction basis, then you may consider using location. However, if you require to tag the detail lines of a transaction, then Class will be a better choice. That is, multiple classes per transaction (Do check the limitation in using either class or location).

Usually, I tend to use Class for project tracking, type of products/services, or region, etc. As I can tag different line items or account with a different class. The Location is more about tracking the multiple stores or departments. In some cases, both Class and Location are being used in a QBO company file.

Get a QuickBooks consultant if you are not sure which is a better solution for your business.