If you have various lines of business, QuickBooks provides easy- to-use features that will enhance your business reporting. Some of the most commonly under-utilized features are the Income Accounts, Class Tracking and Job Costing. Here are a few tips on when you should use these:
Income Accounts – the products you sell can be categorized and reported separately on your financial statements. Use this tool if you sell a variety of products and services but have no real separation of expenses. For example, a consultant may wish to track different types of consulting services provided. To track different sales lines, set up a variety of Income accounts in your Chart of Accounts and then point your different Products and Services items to the appropriate Income accounts. Run a Profit and Loss report and you will see your sales appearing on each Income line according to the products or services that you have sold.
Class Tracking – think Departmental accounting. This feature is best used when you have both different sales lines and specific expenses that are related to these sales. If you are using QuickBooks Online, you will need the Plus version to access Class Tracking. QuickBooks Desktop offers this feature in the Pro, Premier and Enterprise versions. Set up your Classes of business in the Class list, then when you enter transactions such as sales or expenses, assign each line of your transactions to the appropriate Class. To report on these Classes, run a Profit and Loss by Class report.
Job Costing – think Project accounting. If you are using QuickBooks Online, you will need the Plus version to access Job Costing reports. When entering expense transactions, you can assign purchases to various Customers (QuickBooks Desktop or Online), Jobs (QuickBooks Desktop) or Sub-Customers (QuickBooks Online). To report on job costs, there are a number of reports available in both software products. In QuickBooks Desktop, go to the Jobs, Time and Mileage section of the Reports menu. In QuickBooks Online, run an Income by Customer Summary report, found in the Review Sales area of the Reports menu, or run a Profit and Loss by Customer report, found in the Business Overview area. Note that to access detailed reports, it may be best to use the Items tab as opposed to the Accounts/Expenses tab to code your expense entries. If you wish to track payroll expenses to a job, you can only do this in QuickBooks Desktop at this time.
If you are interested in enhancing your reporting, why not contact BookSmarts today?