31 Aug Using Classes in QuickBooks to Track Financial Performance
Some businesses want to monitor their finances not only on company-wide level, but based on different dimensions of their business. Some track their financial statements based on profit or cost centers, departments, or even projects. This kind of reporting greatly helps the decision makers within the organization to determine which aspect of the business is profitable. In QuickBooks, you can use the Classes to tag your transactions to a specific profit center, cost center, department, or project. To define classes in QuickBooks, go to List > Class List, then press Ctrl+N.
You can even create subclasses if you want to break down your class in further level of detail. Once done, you may now tag your transactions with class. Let’s take a look at one example of expense recording below:
In this example, Equipment Rental and Maintenance was billed to our company amounting to 29,200. But in the details section of the transaction, we have identified that this pertains to expenses for two different projects, namely Project A and Project B. This allows us to classify the expense for a particular project.
Another example that we will take a look at is for recording of revenue. Consider the screenshot below:
In this transaction, we invoiced Customer XYZ for an installation service amounting to 20,000. This is assigned a class Project A, which means that the revenue is classified under this project.
Later on, when we generate financial reports, we can use Profit and Loss By Class to determine the performance of each projects (or class)
Is there anything you want to know more about QuickBooks? Let us know in the comments section below!