In QBO how can I set up 4 lines of businesses (LOBs)? 3 of the 4 LOBs are revenue generating and forth just to book overhead (OH) exp. Plan to allocate OH to 3 LOBs.
In QBO how can I set up 4 lines of businesses (LOBs)? 3 of
the 4 LOBs are revenue generating products. Forth LOB will be just to book
overhead expenses. I plan to allocate overhead expense every month-end to the other 3
LOBs. I've read that setting up classes may be the best way to go? How to
allocate the overhead expenses from one class to another? For e.g., I have booked factory overhead to LOB X then at month end want to allocate to LOB A,B,C based on number of products sold - how can that be achieved?
You're right about setting classes when it comes to tracking your transactions per line of business. However, if you have different businesses with separate taxes, you may need to have one subscription per business.
If you have the same taxes for one entity, then you can use classes to track income, expenses, or profitability by business segment. When it’s time to run reports, you have a clear picture of each segment’s financial health. Then, you can use this info to set a budget goal for each class.
Re: In QBO how can I set up 4 lines of businesses (LOBs)? 3 of the 4 LOBs are revenue generating ...
@Anonymous Thanks so much for your response! Very Helpful.
Any idea how I can allocate expenses from one class to another? For example, I have a class set up for overhead (i.e., all factory overhead expenses are booked there). I would like to allocate those factory overhead expenses to other classes at month-end. E.g., a vendor is paid $6 which is booked to Class A and at month-end that $6 is re-allocated equally to Class B, C and D.
Allow me to join this conversation and provide you with some details about allocating expenses from one class to another.
The best way to distribute amounts from one class to another is to edit the transaction created. You also have the option to make a journal entry to remove the expense from the main class and apply it to the same accounts with the appropriate classes.
Here are the resources that you can check out for complete details about these processes: