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Introduction to categories in Products and Services

Category is a means of classifying products and services you sell to customers which makes accounting for inventory easier. Categorizing what you sell can help you better understand sales volume and who’s buying what.

You can also search for items by category, saving you time when completing transaction form.

Set up categories

  1. On the left menu, select Sales > Product and Services.
  2. Select the More dropdown on the upper right, then Manage Categories.
  3. Select New category on the upper right.

You can also create a category when setting up (or editing) an item or service by selecting Add New on the category drop down.

Edit or delete a category

  1. Select the Gear Icon in the upper right.
  2. Under the Lists section, select All Lists
  3. Select Product Categories.
  4. In the list, select Edit on the category you want to edit.
    You can alter the category name, its place in the hierarchy (moving it to the top level, or under and sub-category), or delete it by using the Remove button.

If you remove a category, or subcategory, items that are within it will be either moved up one sub-category level or reclassified as Uncategorized.

Categories FAQ's

Can an item be classified in more than one category/subcategory?

No, items can only have one categorization. Note, however, that products that are placed in a subcategory also “live” in the parent category.

What happens if I already have sub-items?

If you are migrating from QuickBooks Pro/Premier, or have sub-items set up in QuickBooks Online, then any items or sub-items that have child items will be converted into categories (and we will maintain the hierarchy). Any sub-items (that have their own sub-items) that have been used within transactions will now be converted into stand-alone items and we will create a Category that will house any lower level sub-items.
Note: Not applicable to all Australian Users.

Are categories displayed on transaction forms (like invoices)?

Transaction forms display the full name of items and services (including categories). When you add an item or service to a transaction form, you can search by that item/service name, SKU, or category to add it to the form.

Can I use categories within transaction forms?

No. Categories are used to categorize sellable or purchasable items, they are not intended to be used on transactions. However, when adding items to your transactions, you can still search for those items by categories.

Can I reassign products and services to categories however I please?

Yes. Categories are meant to ease your processes. You can assign and reassign them however you want, to best suit your needs.

What happens if I delete a category or subcategory?

 When you delete a subcategory, any items or services within it “walk up” one level to their parent category or subcategory. When you delete a top-level category, all the products and services within it are reclassified as “uncategorized”.

Will using categories have an impact on the reports I run?

No. Reports are not impacted by category use.

Will using categories have an impact on my accounting?

No. While categories are great for gaining a better understanding of your sales,and make it easier for you and your employees to manage record keeping, they don’t directly impact your bottom line accounting.

Why does my products and services list look different?

We removed the sub-item indentations from the products and services list to make it easier to read. Additionally, QuickBooks displays line items with category information. If you want, you can also filter by one or more categories, so that only those are shown.

I see a category with “deleted” in the name. What does that mean?

When you switch from sub-items to Categories, inactive parent items appear with “deleted” in the category name. If you don't want to use it, you can easily remove it.

  1. Select the Gear icon.
  2. In the Lists section, select Products and Services.
  3. Select More dropdown, then choose Manage categories.
  4. In the Action column, select the drop-down arrow and choose Remove.

If you want to continue using it, simply rename by selecting Edit instead of Remove. Enter the new name, then select Save.

Can I import/export categories?

Yes, you can import categories the same way you import products and service via Excel. For instance if you specify an item as: Men’s Clothing: Pants in the import data file, we will create a category named Men’s Clothing and an item called Pants.
US only: See Import or export list data in QuickBooks Online

I don’t see the ability to use categories in my QuickBooks Online company. Why is that?

We’re releasing the categories function in stages. Those who use sub-items now get the opportunity to opt in earlier than others. After the opt in period, we’ll turn the function on for everyone.