As someone who owns or manages a small business, you understand the complexities and problems behind maintaining a proper bookkeeping and accounting record. However, with the introduction of accounting software like QuickBooks, accounting and bookkeeping task have not only become easier to maintain but the innovative tools have helped organizations to develop and grow. Class tracking is yet another important tool QuickBooks has to offer.
What Is Class Tracking?
Class tracking allows you to create separate classes for managing transactions. This feature lets you manage account balances by department, office locations, the properties you own, or another relevant source.
If you have different segments in your business and you offer a number of products and services, you will find the class-tracking feature useful. You can define these segments and keep a close eye on them, while managing the account balances on receipts, bills, or invoices, separately. Moreover, different departments and segments of your business can use the class feature to report the account balances, respectively.
For example, if you own a clothing line and your shop is located at two different locations, you can manage both the accounts separately. A restaurant owner with restaurants in 5 different locations might use class tracking to keep track income and expenses by each restaurant location. Similarly, at the end of the accounting period, segment/department specific reports can be generated.
Class Tracking Reports
Apart from creating separate identities for different segments of your business, you can also get useful reports at the end of the year, which makes your job even easier. You can also create consolidated reports.
Profit And Loss By Class Report
This report includes subtotals for each type of expense, or income, from each classified segment, making it easier to see where the money is coming from and where is it going. When you use class reporting for the first time, the default set date range represents a fiscal year, but you can always change the date, which suits your business needs.
Profit And Loss Unclassified Report
Just as you may have created classes for the segments you need recorded, there might be other aspects of your business, left unclassified. The profit and loss unclassified report takes care of such unclassified items. It helps you conveniently identify the transactions, which have been left unclassified, making your job more easier, and keeping a strict accountability of everything coming in and going out.
Tips For Using QuickBooks Classes
Here are some general tips you can use:
- If you feel that, a certain department or segment cannot fit into the classes you have setup, set it to ‘other’, so that you can deliberately use it to classify transactions.
- Avoid using classes to track two different purposes of your business; for example, don’t create classes for tracking restaurant locations in addition to tracking partners.
- Be Persistent! Enter the class information into all the forms and registers, so you know the this information is valid and useful.
Class tracking can help you streamline the recording of business transactions and make your job easier, so you can concentrate and focus on the growth and development of your business.