You can filter QuickBooks reports in numerous ways to make them more meaningful. Assigning classes to transactions will improve those filtering capabilities.
If you’ve never taken a QuickBooks class on creating reports, it would definitely be worth your while. You create records and transactions in the software as a part of your daily workflow, but it’s your reports that tell you how well your business has done, what its current state is and how you might do in the future. It’s important that you know how to use them.
You’ve probably looked at the list of filters and customization options in QuickBooks, so you know how flexible they are — and how insightful they can be. But you may never have considered using Classes as an option.
Let’s look at how assigning Classes can help when you’re customizing reports. First, you need to make sure that your software is set up to accommodate them. Open the Edit menu and select Preferences. Click in the Accounting tab and then on the Company Preferences tab. Under CLASS, click in the box in front of Use class tracking for transactions to put a check mark there. If you’d like, click in the box in front of Prompt to assign classes.
Setting Preferences for class tracking (screen shots taken in QuickBooks 2013)
Now when you open a transaction form like an invoice, purchase order or bill, you’ll see a field near the top labeled Class.
Before you start assigning them, you’ll have to tell QuickBooks what Classes you want to use. You need to think about them in terms of reporting. How will you want to break down your reports to find out how different areas of your business are performing?
Let’s say you’re a contractor who does both new construction and remodeling. You also occasionally do repairs. Though you have multiple departments and locations, the most meaningful filter you can set up is the type of work each transaction relates to.
Note: QuickBooks does not let you create more than one type of filter, so think carefully about what you want to use here. There will be other ways you can pull out the data you need from reports.
To create Classes, open the Lists menu and select Class List. This dialog box opens:
Click New to create your Classes. You may want to learn how to use QuickBooks Classes by enrolling in a QuickBooks tutorial.
Click on the arrow next to Class at the bottom of the dialog box and select New. Enter the name of the class, like Remodel, then click OK. Continue until you’ve added all that you want in this initial batch. If you want to assign subclasses to your primary categories, check the box in front of Subclass of and then select the “parent” Class from the drop-down list.
Now open an invoice form. After you select the Customer, you’ll be able to choose a Class from the drop-down list.
Assigning a class in an invoice.