Jennifer Cobb CPA, PLLC You can create “Classes” in both the Online Plus and Desktop versions of QuickBooks. In QuickBooks Online Plus, you have an additional option to create “Locations”. The Location feature is not available in Online Simple Start/Essentials or any Desktop versions of QuickBooks.
Both Class and Location tracking allow you to sort income and expense transactions based on meaningful categories. Categories may include identifiers such as physical location, property, business activity, or project. (See my previous blog of May 25th for useful reporting examples using class tracking.)
Location tracking seems self-explanatory at first glance, although you can use this feature to classify transactions by identifiers other than address/city/state/region (for example: by departments).
I learned a valuable lesson last week – the hard way. (Although, not extremely hard since there were very few transactions to be corrected by the time I figured out the error of my ways!)
I used the Location tracking feature in QuickBooks Online Plus to categorize income and expense transactions by physical store location. Then I needed to allocate a downloaded banking transaction to multiple locations. Oops…you CAN’T split a single transaction between LOCATIONS!!
I was able to create Classes for the locations and quickly re-classify existing transactions by the newly created Classes.
Tracking income and expenses by Class and/or Location is a VERY useful tool to analyze profit and loss from your business activities. It just so happens that Class tracking may be more efficient/useful for your business than Location tracking based on the above scenario.
Hopefully this reminder will prevent you from planning to use Location tracking when you are going to need to allocate single transactions to multiple categories.