In Quickbook Enterprise when entering bills what happens if the class in the upper 'Bill' section of the entry does not match the class selected 'Expense' section?

Thank you for asking and genuinely learning about tracking classes on reported transactions, @ClaireRTF.

Tracking classes lets you mark transactions and line items. With this feature in QuickBooks Desktop Enterprise, you can pull up specified transaction reports, such as Balance Sheet reports for the asset, liability, and equity accounts used when saving a record like Accounts Payable for Bills and Accounts Receivable for Invoices.

Profit and Loss reports then let you see the posting of income and expenses. For this reason, expense categories used in the Bills' line item will show in that report.

With these aspects, you're correct about using Balance Sheet by Class and Profit and Loss by Class reports. We can't identify if the class in a transaction matches the Expense tab's class line item since its usage in QuickBooks isn't alike. That said, it's crucial reviewing the bill before saving them, ensuring you're tracking class transactions and categories in a line item accurately.

Because of the class usage difference in a transaction from the Expense section line item, there are no specific report/s that could identify errors if the classes do not match aside from opening each transaction like invoice, bill, check, expenses, etc. The targets and sources are the main factors we can't customize a report to identify errors if classes don't match.

I know you're hopeful to see this data since it's beneficial to track errors to correct them. I like you to check this article for more details: Understand reports. You'll want to add this resource to your bookmarks to see other insights about class tracking: Set up and use class tracking in QuickBooks Desktop.

Furthermore, I'm also adding this article to learn more about customizing transactions when you need to see some particular data: Customize reports.

Feel free to contact me here by tagging my name (@Jovychris_A) if you have other QuickBooks reporting and class tracking concerns. I'll make myself available anytime to help you more. Thanks for dropping by, Claire.

Can you please explain further about what the difference is between these two classes? I know that the bottom Class is what hits GL. Why do we need the Class in the Bill section? What do it do exactly? 

Let me explain the difference between the two classes and their roles in QuickBooks, MissB1. 

In QuickBooks Desktop, the Class in the upper Bill section and the Class selected in the Expense tab serve similar purposes but have slight differences in their functionality.
 

The Class in the upper Bill section allows you to assign a single class to the entire bill. This means that all the expenses included in the bill will be categorized under the same class. It provides a way to track and allocate expenses to different segments or projects of your business, allowing you to generate reports and analyze the financial performance by class.
 

On the other hand, the Class selected in the Expense tab of QuickBooks Desktop is used to assign a class to individual line items within the bill. This means that you can assign different classes to each expense line item within the same bill. This level of detail allows for more specific tracking and reporting of expenses by class. 

Additionally, the Class that hits the General Ledger (GL) is used in transactions like Invoices, Sales receipts, Estimates, Sales orders, Statement Charges, Refunds and credits, Checks, Credit card charges, Bills, Purchase orders, and Paychecks. This Class assignment affects the GL accounts associated with those transactions, allowing you to track income and expenses by class in your financial statements. 

Moreover, check out these articles below to find out more about classes usage and how to personalize reports in QuickBooks: 

• Set up and use class tracking in QuickBooks Desktop
• Filter, sort, or total reports by Class

Feel free to ask me if you have further questions about classes and reports in QuickBooks. I'm always willing to help you.

Thank you very much for getting back to me. I just tested. Here's what I found. If I add class to #1 and #2, the expense will hit GL. If I add class #1 alone without adding class to #2, the transaction won't show when I run BS and P&L, however if I add class to #2 without adding class to #1, the expense will still show when I run my report. 

My question is what's the purpose of Class#1 besides my class will show when I run BS report. I hope this is not too confusing. 

Your explanation of your concern is clear, MissB1. Classes help organize transactions to track specific segments, and I'll provide more details.

Class 1 is used for the entire transaction, tracking the credit card purchase/charge. It's designed to categorize the transaction as a whole and will be reflected in the report, detailing asset, liability, and equity account information (Balance Sheet).

On the other hand, Class 2 is for expenses and only categorizes line items, allowing you to select one for detailed reporting. This will then be shown in the expense section of the P&L report.

A general ledger (GL) consists of numbered accounts used to track financial transactions and prepare financial reports. Each account summarizes a specific type of asset, liability, equity, revenue, or expense. Thus, recording Classes 1 and 2.

Moreover, I recommend seeking advice from accounting professionals for an in-depth explanation of how these transactions are captured on financial statements. They can provide other views of the accounting side of your entries.

Here's an article as a guide when managing credit card accounts in the program: Set up, use, and pay credit card accounts.

Furthermore, this reference will assist you in balancing your accounts: Reconcile an account in QuickBooks Desktop.

You can always press the Reply button if you have more questions regarding reports or classes. I’ll get back to you as soon as I can. Have a wonderful day.