I inherited some QB files to account for non-public custodial accounts. There are only two types of accounts, assets and liabilities. There's no equity account since they are custodial. There are accounts such as scholarships, clubs, and trusts. Under those accounts, there are "subaccounts" for scholarship recipients and club income/expenses (they are not actual income/expense accounts since they are part of the parent liability accounts, but they are named so and acting as income/expense accounts). However, they are set up as classes instead of actual subaccounts. Apparently it has been working okay this way for decades, however, there has been many errors as transactions were entered: "parent" accounts and classes mismatched often. I have two question: Does anybody see any reason why classes were used to account for subaccounts? If I want to change the subaccounts represented by the classes to true subaccounts, how should I approach? Should I reconstruct a new file from scratch by entering opening balances manually? Please advise!
Assigning classes to accounts keep track of account balances by department, or location, or any other meaningful break down of your business. Some company would want to use this process to organize their profits per class.
There's currently no option to change the classes to sub-accounts. It'd be best to create a new company file instead. This way, the current company file won't get messed up.