QuickBooks standard reports are important to understanding your company's historical information and its current financial health. However, the program also offers tools that can make your financial reports significantly more useful and helpful in managing your business.
QuickBooks offers two easy ways that let you identify data: classes and types.

  1. Classes are used in transactions. They are used to separate transactions that relate to different locations. A company may want to track departments or lines of business by using classes, for example, for new construction, remodeling, and overhead.

    QuickBooks comes with two reports specially designed for tracking class-based transactions: Profit & Loss by Class and Balance Sheet by Class (both can be found in the Reports menu, under Company & Financial). You can also filter other reports to include a class column. As an example, in the Profit and Loss by Class report, a column will be designated to that particular department or line of business, and will produce its own Profit and Loss Report within the total company report. This way, you can see the results of that section of the business independently of the rest of the operation.
  2. Types are assigned to individual customers, vendors, and jobs. Customer types will segregate groups by characteristics such as residential or commercial.

    Customer, vendor, and job types are typical classifications. Job types are especially useful and can track, for example, profitability and time spent on individual projects. Customer and vendor types can produce information, for example, for targeted mailings and reports. They are useful if you want to see your accounts receivable or accounts payable sorted by a particular type, such as accounts receivable or payable by commercial or residential business.

    Creating types is very similar to creating classes. Types do not appear on transactions such as invoices or bills; they're designed to the individual customer or vendor, and they're stored in the customer and vendor setup.

Classes and types can be used very effectively in your internal QuickBooks record keeping, but they require a good deal of thought and planning upfront to get accurate, meaningful reports.

Patrick Cosgrove is a senior accountant based out of our Buffalo, NY office.

Cheryl Prout is a partner based out of our Buffalo, NY office.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.

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