QuickBooks 2011: The Missing Manual

Categorizing with Classes

Classes are the only solution if you want to classify income and expenses by categories that span multiple accounts in your chart of accounts or multiple types of customers, jobs, and vendors. For example, classes help you categorize by business unit, department, location, partner, or consultant. They also come in handy for tracking the Allocation of Functional Expenses that nonprofit organizations have to show on financial statements. Not everyone needs classes, so don’t feel that you have to use them; the box on Do You Need Classes? can help you decide whether they’re right for you.

Tip

Before you decide to turn on classes, use QuickBooks without them for a few weeks or months. If it turns out that you can generate all the reports you need without classes, don’t burden yourself with another field to fill in. If you work without classes and then decide to use them after all, you can go back and edit past transactions to assign classes to them, or just start using classes at the beginning of a new fiscal period.

If you choose to work with classes, be sure to follow these guidelines to get the most out of them:

• Pick one use for classes. QuickBooks has only one list of classes, so every class should represent the same type of classification. Moreover, you can assign just one class to a transaction, so classes add only one additional way to categorize your transactions. For example, once you assign a class for a business unit to a transaction, there’s no way to ...