The class function in QuickBooks is one of my most favorite features. This simple additional step enables you to link your transactions to a specific event, department, donor, client, office, etc. You can then create reports to see how much you are spending per class. Why is this useful?
Well, let’s say that you are a photographer and you have 3 different events you have planned out throughout the year. We can create the classes in QuickBooks and call each event by name and date. (Wedding 2.14.14, Graduation 5.15.14, Anniversary 11.14.14). Each expense that you capture, you can also code according to class as viewed in the snapshot below:
You can also record your income according to the specific class as well. That way at the end of the event you could see exactly how much your income and expenses amounted to via the Profit & Loss by Class report.
For Non-Profits this function is especially useful for tracking expenses related to specific donors. It enables reports to be created efficiently when they are needed.
Another example would be a business that has different types of services and you’d like to code your expenses according to each service.
To set up classes, you’ll first have to go to the Accounting Preferences tab.
- To do this task, go to the Edit menu and click Preferences.
- In the Preferences window, click Accounting in the list on the left.
- Click the Company Preferences tab.
- Select use class tracking and click OK.
To create the classes you want to track:
- Go to the Lists menu and click Class List.
- Click Class at the bottom of the list and then click New.
- Enter a name for the new class.
If you want more detailed information, such as a breakdown on labor, set up a subclass.
To set up a subclass, select the Subclass of checkbox and enter the appropriate subclass name.
This feature is really fun to use as it breaks down our financial statements into a readable format so we can understand where we stand on our projects, events, grants, etc. It’s an additional step when categorizing expenses and income, but so worth it in my view as it expands the picture of what we’ve accomplished so far and what we may be able to accomplish in the future.