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How to utilize class along with department (location) for Quickbooks desktop

Using QB desktop version I am brainstorming to find the most efficient way to have the ability to utilize class as well as department/location.

For example:

Chart of Accounts-

Class:

Radio Station 1-

      Sales

            Meals & Entertainment

            Subcontractor Services

            Promotions

            Etc

      Engineering

            Same as above

      Programming

            Same as above

Radio Station 2-

       Same as above

 

and the list goes on and on....

 

5 stations are the classes, but we need departments as well with each normal chart of account for an accurate P&L.

 

I would greatly apprciate any suggestions.

Thanks!

 

1 Comment
Established Community Backer ***

Re: How to utilize class along with department (location) for Quickbooks desktop

The Chart of Accounts mostly needs to match the Tax Form this entity files. You don't need to Micro-manage Accounts, or reiterate them.

 

You don't have Both Class and Location, in Desktop. You can use Class and Subclass.

 

Meals and Entertainment seems like you mean Expense account, although Entertainment no longer applies to business expense per the TCJA Dec 2017.

 

You seem to have completely overlooked Items. Items are what you use for Operational Tracking purposes. They are what you make, sell, do, charge, buy, or buy and sell. They link to one, two, or even three accounts (in the example of inventory) and allow you to use Quantity, to track Cost compared to Sales, etc. They are how you avoid Micro-managing accounts.

 

Let's take One Example: Radio Advertising. I sell Advertising. I see my tax form for this tax entity type has One Line for Income. But for my operational purposes, I want to track and sell One time placement, or Weekly spot, or Sports Show Sponsorship or News Show Sponsorship; and I want to track by Station. A Bank signs a contract and the sale looks like this:

 

Sales items are Service item Type for the various Show Ads or placement; I can use qty, too, such as:

 

Service Item = Saturday Sports Show. Desription = Sponsorship for 30 second ads to run twice every Saturday at $x (rate); qty 16 = 8 week package. Amount calculates = total sale.

 

If that is partially one Station 1 and partially on Station 2, then I make that as two lines:

Service Item = Saturday Sports Show. Desription = Sponsorship for 30 second ads to run once on this station every Saturday at $x (rate); qty 8 = 8 week package. Amount calculates and Class tracking = Station 1.

Service Item = Saturday Sports Show. Desription = Sponsorship for 30 second ads to run once on this station every Saturday at $x (rate); qty 8 = 8 week package. Amount calculates and Class tracking = Station 2.

 

Now Sales reporting and P&L by Class will separate that sales and that income into Two Columns, per Class.

 

Subcontactor services can be two sided = something you pay for and charge back, such as a Recording for a commercial or a jingle you purchase or Royalties you pay for, and then charge to the customer as Billable. That means the Service item is linked to your expense account and your income account; the entry on the Purchase transaction is "job tracked" = allocated as direct for that customer, and Billable if you are passing the cost on. It is marked not billable, if it was part of what they contracted for, but you are incurring it as a direct cost to you for them, only (not your own sound library, for instance).  And on the purchase, you separately Class Track. Example"

Credit Card Charge to Staples.

Three lines:

Office Supplies expense, Class = station 1

Office Supplies expense, Class = station 2

Office Supplies expense, Class = Admin

= total paid to Staples for what you bought

 

For Accounts, think of "activity I need to track because it is part of the tax form reporting."

For Operations, think of "items, because I want to Name these, and they link to accounts for what I do as part of my business, not as part of being in business."

Examples:

You pay Rent as expenses tab entry. A Landlord Sells Rent, and that is a Service item linked to Income. A Wedding planner Rents a venue for your wedding, and charges that back to you (or it is not billable = in the contract fee) and they Job Track the Purchase entry.

 

Everyone uses Items to meet Operational needs.