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Level 2

Creating Sales Categories? (Wholesale, Retail, E-commerce)

How would I create different sales categories corresponding to for example different sales channels?  I know how to create custom GL accounts but it seems whenever I book sales through customer receipts it always just goes to the parent Merchandise Sales.

 

Related to this, how can I create contra and expense categories that I can also run through the customer receipt?  For example, e-commerce only discounts.

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Best answer January 05, 2019

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Level 15

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Don't make More Accounts. You don't need this micro-management.

 

You can use Customer Type; or Job Type, and run reports, such as Sales by Customer, Filtered on Wholesale.

 

You can use Class Tracking, such as P&L by Class, because everything you enter, including your own Spending, is also cross-referenced by Class = Wholesale, Retail, E-Commerce, as if that is Departments or Divisions, and operationally, you see P&L by Class = Column for each division, income over expense.

 

Yes, the Items controls the data flow to the accounting, and your tax form has One Line for income. Merchandise Sales is Fine. That's all you need.

 

Everything you list on a sales receipt or invoice is an Item. For discounts, you can use a Discount Type item, but that is a Calculating item. If you want to discount more than just the one item above it, you list the charge items, you use a Subtotal Item, then you list the Discount item. Link the discount item to one income account used only for Refunds/Write Offs, as the contra- account. This also matches your tax form = one line for "Returns/Allowances."

 

So, all you need are those two income accounts, really.

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16 Comments 16
Highlighted
Level 15

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Don't make More Accounts. You don't need this micro-management.

 

You can use Customer Type; or Job Type, and run reports, such as Sales by Customer, Filtered on Wholesale.

 

You can use Class Tracking, such as P&L by Class, because everything you enter, including your own Spending, is also cross-referenced by Class = Wholesale, Retail, E-Commerce, as if that is Departments or Divisions, and operationally, you see P&L by Class = Column for each division, income over expense.

 

Yes, the Items controls the data flow to the accounting, and your tax form has One Line for income. Merchandise Sales is Fine. That's all you need.

 

Everything you list on a sales receipt or invoice is an Item. For discounts, you can use a Discount Type item, but that is a Calculating item. If you want to discount more than just the one item above it, you list the charge items, you use a Subtotal Item, then you list the Discount item. Link the discount item to one income account used only for Refunds/Write Offs, as the contra- account. This also matches your tax form = one line for "Returns/Allowances."

 

So, all you need are those two income accounts, really.

View solution in original post

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Level 15
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Level 2

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Yes but I wanted to go back to creating separate accounts.  Reason I prefer separate accounts is to be able to see off the bat on P&L reports what breakdown of sales is, what breakdown of discounts is, etc.

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Level 15

Creating Sales Categories? (Wholesale, Retail, E-commerce)

What you are asking is Problematic. Let's review:

"Reason I prefer separate accounts is to be able to see off the bat on P&L reports what breakdown of sales is, what breakdown of discounts is, etc."

 

That's why you run P&L by Class. This gives you Columns. You don't need more Rows.

 

Your Tax form doesn't have more Rows.

 

"but I wanted to go back to creating separate accounts."

 

Let me give you an example from one of my clients, that has 9 coffee/grill locations, kiosks, inside the hospital, the court house, at the airport, etc. They also sell Online.

 

When they sell a bottle of Vanilla Flavoring from inventory, there is only the One Product, and it is linked to One account for Sales. It cannot flow data to different accounts because they sold it to Idaho or Utah or Virginia, or by Web or their Main Store Retail, or at a Wholesale Price point. It's the Same Bottle. What you are asking for is Additional Cross-reference Criteria.

 

It's a Sale. That is income. Done.

 

QB uses a Relational database. So, if you use these other Tracking and designations, and not More Accounts as Rows, you then can run reports, such as:

Sales by Customer Type (wholesale or distributor or FBA (fuflilled by Amazon) or their own other locations. Sales by Product (item) and by Class or Filtered on Class. Price Levels allow you to set the price as $100, but Wholesale customers automatically have a price point changed to $85, for instance, because that is a Function provided for. Not more Rows. And the Customer Name is set as Taxable or not, in the taxing agency, not more Items or more Rows, when you sell them the same Vanilla flavoring bottle.

 

The best reference for the chart of accounts is the Tax form you file. You want it Simple. For analysis, operation and activity reporting, you use More tools. Not more complexity to the account listing. When you buy a new car, you don't build it a new garage; you put it in the garage you already have. If you swapped one car for another, you don't need More garages.

 

"Off the bat" the P&L is more powerful if you don't micro-manage it, and use the more powerful reporting for sales and customer activities.

 

Another function, as long as this is Never Inventory, is to set up more Items. Example: QB Pro does not provide for Price Level per item. It only provides for % up and % down. So, if you wanted to establish Wholesale Price List and Retail Price List to the level of Per Item, and you only bought QB Pro, the Entry level program, then you would define and use more Items. Examples

 

Service item for Hourly Rate is $150 Regular, and $125 Governmental contracts, and $100 for Not For Profits. Then, you sell them their specific item, because you cannot use Price levels for that function in QB Pro.

 

But they all link to the Same income account. And you run reports on the item, the customer, the Class, etc, as many of the additional tools that help you analyze Business; the financial reports should not become cumbersome. I had a client with one COGS for each Product they sell; the Product-based reporting already takes care of this. I had a student come to class with a 14-page Chart of Accounts; one account named for each year, such as 2015 electricity and 2016 electricity. Guess what? Everything we enter also already has a Date on it. That's P&L, such as for All dates, columns by Year. You don't need more rows.

 

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Level 15

Creating Sales Categories? (Wholesale, Retail, E-commerce)

I will attach an example report for you.

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Level 15

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Here's another attachment, as P&L by Class.

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Level 15

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Here's a P&L by Class, from a Pro file before they learned Class tracking. You can see what happens when you micro-manage Accounts; look at all the Zeros. Then, look at where I highlighted for them the One Row for Payroll Expense is all they ever needed.

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Level 15

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Lastly, here is an attachment for Sales filtered only on Customer Type = Residential, as compared to All Sales by Item.

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Level 2

Creating Sales Categories? (Wholesale, Retail, E-commerce)

qbteachmt, thank you very much for your time and effort in explaining this to me and hopefully others wanting more analytical flexibility.  I think the tl:dr was this:

 

"That's why you run P&L by Class. This gives you Columns. You don't need more Rows."

 

You've made me a believer.  I need to explore and learn this part of QB of making classes of certain dimensions.  And the more I think about it the more analytics I can think of making with it.  Thanks again.

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Level 1

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Looks like this would not work on QBO - is that correct?  I don't see an option for Class in reports.

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Moderator

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Sending good vibes to you, bitterhousewife.

Allow me to help you pull up a report by Class via QuickBooks Online.

 

If you wish to pull up the Profit and Loss by Class report, you'll need to turn on this feature to have this option. This feature is only available in QuickBooks Online Plus.

 

Here's how:

 

  1. Click the Gear icon in the upper-right hand corner.
  2. Select Account and Settings.
  3. Go to the Advanced tab.
  4. Click the pencil icon for Categories.
  5. Check the boxes for Track classes and Warn me when a transaction isn’t assigned a class (if necessary).
  6. Choose whether you want One to each row in a transaction or One to the entire transaction.
  7. Click Save and Done.

You may find this article helpful: https://quickbooks.intuit.com/community/Help-Articles/How-to-set-up-and-use-class-and-location-track....

 

For additional help with QuickBooks, feel free to reach out to our Customer Care Team. You can get our most-up-to-date number here:

 

  1. Sign in to your QuickBooks Online Company.
  2. Click (?) Help at the upper right corner.
  3. At the bottom, click on Contact us.
  4. Type in your concern then hit Continue.

I hope this clears out and helps you activate class tracking. Feel free to keep me posted with any questions you might have.

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Level 1

Creating Sales Categories? (Wholesale, Retail, E-commerce)

That was very helpful!

 

Ok.  I see how to do that.  And I can change a transaction to reflect the new Class.  Is there a way to bulk change all the transactions for a customer to that class?

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Moderator

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Hi there, @bitterhousewife.

 

Thank you for the quick response. I'd be glad to help share a method to change the class in all customer's transactions in bulk.

 

You can easily manage mass transactions through Excel. What we can do is to use a third-party application in working with bulk transactions. This way, you can easily import then edit mass transactions via an Excel file.

 

You can browse our different options for third-party apps from the Apps Center. Just click Apps from the left navigation panel on your QuickBooks Online homepage or go to Apps.intuit.com. If you can't find what you need, you can try searching the web.

 

These resources should help to get you on the right track for editing your transactions. Stay in touch if you have any other questions in QuickBooks Online. I'll be happy to help you further. Wishing you and your business continued success.

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Level 1

Creating Sales Categories? (Wholesale, Retail, E-commerce)

Ugh.  Makes me want to go back to Xero.

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Level 1

Creating Sales Categories? (Wholesale, Retail, E-commerce)

I have never posted on these forums before but I've just seen this response and I am absolutely shocked. Rather than suggestion a solution or even post a response to the questions you have basically said don't 'micro manage'. Different accountants have different ways of creating management accounts. I am an accountant and I can think of many many of my clients who want this level of detail within their chart of accounts and hence management accounts for different reasons. I find your response actually quite disrespectful. The reason I found this thread is for the exact reason. If there is currently no way for QB Online to deal with this then just say so. Presumably QB developers will then see if there is or isn't a market need for such a function and act accordingly. I for one would encourage them to allow this functionality if it is currently not available.
Highlighted
Level 1

Creating Sales Categories? (Wholesale, Retail, E-commerce)

We solved this by moving back to Xero, where this is easy to do.

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