Categories and classes have their place in QuickBooks Online transactions. Tags provide another way to track your financial data.
QuickBooks Online is an excellent tool for creating, storing, and sending sales and purchase forms and building comprehensive customer and vendor profiles. However, to get the most out of this web-based accounting application, you should use its classification tools to view related transactions as groups and learn how well specific parts of your business are working.
The newest tool for this task is Tags—customizable labels that let you monitor whatever you want, for whatever elements of your business you want to keep track of. You could discover how much you’re making and spending on different jobs. You could also track your interrelated transactions, such as ad campaigns, sales reps, and project managers. You’ll create and store tags as groups to view on one page. You can add them anytime and even run specialized reports on them. They’re highly flexible tools that help you analyze your business uniquely.
How Are They Different?
You may have used tags in other applications. In QuickBooks Online, tags differ from the other classification tools. You assign categories to transactions mainly for tax purposes (how much you spent on utilities, advertising, or deductible meals). Classes help separate groups of income and expenses for budgeting, job costing, and other related expenditures. Locations let you monitor income, costs, and assets by geographic location.
Tags, on the other hand, are unlimited. You can track virtually any related set of transactions with them.
How Do You Create Tags?
Before creating tags, you have to make a Group to assign them to. Click the gear icon at the top right and select Tags under Lists. It will take you to the Tags home page. Choose New and then click on Tag Group. A vertical pane should slide out from the right. Enter a Group name and a color. Click Save. To add a tag in the Tag name field, click Add.
Once you’ve made a group, you can start adding tags.
Keep adding tags until you have all that you need. You can always add more later. When you’re finished adding, click Done. Your new group will be listed back on the Tags home page.
How Do You Use Tags In Transactions?
Tags don’t have an impact on your accounting books. They only give you information on lists and reports.
Let’s say you’re running a small clothing store. You want to see which of your employees sells the most and which seasons have the most sales. You could create two groups: Employees and Clothing seasons. You want to make sales receipts to compare by-employee and seasonal sales.
Click on New in the upper left corner and choose Sales Receipt under Customer. Enter the Customer name or + Add new. You can also leave it blank since it’s not needed here. Look at the date. Click in the Tags field to view your options. Choose the employee and the season. You can assign as many tags as possible to a transaction; you can only assign one for each group. You can then complete the rest of the receipt and save it. You may add tags to any transaction that contains a field for them.
You may add tags to any transaction that contains a field for them.
Returning to the Tags home page, you’ll see that each tag you assigned contains an entry for one transaction in the Transaction column. Click Run report for a Profit and Loss by Tag Group report. You can also find this report when you click on Reports in the toolbar. Additionally, you can find the Transaction List by Tag Group report there. You may return to the Tags home page anytime to view your groups, tags, and related transactions in the list.
What If You Don’t Want To Track Tags?
If you don’t plan to use tags, or at least not immediately, you can set the tag field to off on your transactions. Click the gear icon at the top right, then select Account and Settings. Click the Sales tab in the toolbar. At the bottom of the first section, Sales form content, you’ll find Tags. Click on it, then toggle the on/off button until the green area disappears. Click Save. Click on the Expenses tab and turn off the line that reads the Show Tags field on expense and purchase forms. Click Save again.
Make Use of QuickBooks Online’s Classification Tools
As we said earlier, QuickBooks Online works excellently in creating records and transactions and running reports. But you’ll understand how powerful it is at connecting related data by using classes, categories, locations, and tags. Are you still trying to learn about the differences between these tools and how you would use them to get the information you need? Let’s schedule a session to review them and answer your other questions about QuickBooks Online.
