This seems to have worked for me. Thanks! I hope I can explain it to the accountant! I did leave some "bread crumbs" in the Memo field of the four entries.

Hi Tori B,

Could you provide more context on how to add a class to a bill? I'm using Desktop Pro version. When I go to create a bill, I do not see the option to add a class to it. Is there a setting I need to turn on somewhere?

I have attached a screenshot of what I am seeing- I can add a class to the expense line, but if I don't assign the actual bill with a class, the Accounts Payable isn't hitting the class I want it to.

I appreciate any help!

Hey there, @b_jones. 

Thanks for reaching out to me and following along with the thread. I'm happy to help you out with adding class to your bills. 

You're correct with your thinking, you will need to turn on Class Tracking within your preferences to have the option to include a class on Bills. Let me show you how to turn on the setting below. 

1. From the File menu, choose Preferences. 
   • 
2. Click on the Accounting tab. Then, tap on the Company Preferences tab. 
3. Under the Class section, check off the Use class tracking for transactions box. 
   • 
4. Hit OK when you're ready. 

That's all there is to it. Now you should see the Class option available on your Bills screen. 

Please let me know if you have additional questions or concerns. I'll be here every step of the way. Feel free to @ my name any time. Take care! 

Hi Tori B,

This feature has been active on my account for some time now. I am able to code expenses to the class I want, but not the payable. I have attached an example of a bill where this happened. As you can see, the "Testing" expense has the class of "Taylor". The bill itself does not have a class so when this posts, the Payable to Teton Micro posts with no class. The journal entry in this case would look like this:

Account         Debit               Credit               Class

Testing           25.00                                       Taylor

Payable                                  25.00

Afterwards, when I run a Balance Sheet by class for Taylor it is imbalanced.

Hi @b_jones,

I appreciate your prompt reply and thank you for the details you included in your post.

The feature to assign a class to an entire bill transaction is available in QuickBooks Desktop (QBDT) Enterprise. You can consider upgrading to QBDT Enterprise if you need to have this feature available. 

Otherwise, you can assign the class you want to each line item on your bills. This way, the report you generate for this class will show the correct amounts. 

I'll leave this article with you: Filter, sort, or total reports by Class. It's a detailed guide on how you can customize reports in QBDT, in regards to classes. 

Feel free to drop a comment below if you have other questions about classes in QBDT. I'll handle them for you. 

I oversee the books for a non-profit using QB Desktop, and have clarified exactly how classes work in QBD.

Using Desktop Pro, you have to use Income and Expense (P&L) accounts in your transactions to affect your Class balances. If you use a Balance Sheet Account (bank acct, liability acct, etc) your transactions will not show on a Class report. This is because Classes are primarily for tracking flows of money via P&L transactions. (Apparently QB Enterprise users can run Class reports with Balance Sheet accounts, which can be useful. But non-profits cannot afford Enterprise, so that point is moot. :)

Therefore, to transfer a balance from one Class to another, my suggestion is to first create a special Income Account (or Expense Account if you prefer)--the one I made is called "4999 Fund Transfers". Then create a Journal Entry and use the special Fund Transfers account FOR BOTH THE DEBIT AND CREDIT. This way there is no change on the P&L--the income (or expense) is zero'd out. You DEBIT the Class you want to move the balance FROM, and you CREDIT the Class you want to move the money TO. Very simple. Memorize the Fund Transfer transaction so you won't have to remember which side to Debit and Credit. 

This also assumes you are not actually transferring money between bank accounts. If you have to do that as well, then Write a Check from one bank account using the Fund Transfers account (Income or Expense, doesn't matter), and then Deposit to the second bank account using that same Fund Transfers account. Again, this will zero out the P&L account, adjust the Classes as needed, and move the funds as well.

Hi I am having an issue with a check for utilities expense that was paid for by one class (e.g. Class A) that was an expense of the other class (e.g. Class B).  In the prior year we had the same issue and somehow corrected the issue with a GJ entry, that didn't work this year.  So this year we set up a Clearing Account  to balanced the unbalanced classes, which corrected the unbalanced classes and correctly reported the right utility expense per class.  The problem is the Clearing Account never zeroed out and shows up on the clsssed B/S of Class A as a positive balance, and Class B as a negative balance.  How do we get rid of the classed Clearing Accounts since when we try to reverse the transaction to get rid of the Clearing Account, it gives us the unbalanced classes again?

Hi there, TX6!

I understand that you need to correct the Balance Sheet by Class report. I'm here to help you.

The Balance Sheet by Class report shows the balance of each respective class. The reason why it's showing as a positive balance on Class A and negative on Class B is that when you create the journal entry with the clearing account, you also assigned a class to it. You'll want to edit the journal entry and remove the class from the debit clearing account.

This is how it looks like:

I've added an article you can check: What transactions are not supported by Balance Sheet by Class in QuickBooks Desktop?. This will show you what are the transactions that can cause unclassified or unbalanced on Balance Sheet by Class report.

The Clearing Account is used to move money from one account to another account. Here are some of the articles that can help you to properly the said account:

• Transfer and apply credit from one vendor to another in QuickBooks Desktop

• Transfer customer credit from one job to another in QuickBooks Desktop

Keep on posting here if you need more assistance. Take care!

Thank you for your help Alex V.  I was not able to remove the unbalanced class items that reappear after removing the clearing accounts with your suggestion.  Any other suggestions?

Thank you for your help Alex V.  I was not able to remove the unbalanced class items after removing the clearing accounts with your suggestion.  Any other suggestions?

Hi there, TX6. 

Your total assets should match your total liabilities on your Balance Sheet. If they don’t, we can help figure out how to fix it. Though, balance sheet reports can be tricky. It’s a good idea to ask your bookkeeper or accountant for help before you continue. If you don’t have one, we can help you find an accountant. 

Since you might have to edit transactions to fix this problem, you should make a backup before you continue. 

Step 1: Run the report in accrual basis

If you aren’t already, run the report in accrual basis.

1. From the Reports menu, select Company & Financial and then Balance Sheet Summary.
2. Select Customize Report.
3. On the Display tab, select Accrual under Report Basis.
4. Select OK.

If your balance sheet is out of balance in accrual basis, you should rebuild your company file first. If it's out of balance in cash basis only, or if it's still out of balance after a rebuild, continue to step 2. 

You can refer to this article for the detailed steps in step 2: Fix a Balance Sheet that's out of balance. 

'm also including a couple helpful links for you to check out: 

• Customize reports in QuickBooks Desktop
• Customize company and financial reports 
• Filter, sort or total reports by Class 

If you have any other questions, feel free to post here anytime. Thank you for your time and have a great day. Stay safe!

Thank you for your help! I figured I would respond to let everyone know- THIS!! This is how you do it, and it's really the only way possible within Desktop Pro. Unfortunately there is no easy way to do it- this method takes some time, especially initially to move all that you want moved, but it does work.

I have to move profit from one class to another class in the same account in QuickBoonks Online. Can anyone please help.

Your sugessted soultion works for me. Thank you.

Hello, I just had this issue recently but I have only been using Balance Sheets by Classes for one client that I took on over a year ago. I have done the same journal entry multiple times and this is the first time I have see the unbalance number at the bottom of my balance sheet. The solution per Quickbooks is to set up a wash account. This seems rediculous to me, you should be able to classify any entry but according to Quickbooks not for Journal entries and a whole list of other transactions. This should be fixed by Quickbooks. I have read other comments saying balance sheet by classes are not reliable.

I actually never use the "Write Checks" area and assign classes in all my registers by clicking on "Splits" or hitting Control S while entering the transaction.

Hi Tranette1,

The only way to transfer balances on classes is to reclass the transactions. This means you have to go through each of them and assign a different class.

Hope this helps.

If you need more help, feel free to go back to this thread.

This is such a basic accounting method. I do no not understand why QBO can not fix this. The work arounds are messy in my opinion.  And even with some of them, the reporting looks off unless you run the "right one" - Just doesn't make sense this simple function can not be completed.

I tried this and it does end up zeroing out the one Class and adding to the targeted Class. However, the targeted Class report shows three transactions and the source Class shows just one. Is this correct?

I've attached an image of a portion of the target class report.

Hi starfish1,

Changing the class of the transactions will only create one entry for each item or each transaction. You're not talking about categories (account), right? It's a different thing.

I addition, I recommend contacting our QuickBooks Desktop Support so they can take a look at your account to trace your transactions. They have the tools for that.

If there's anything that I can help from here, feel free to go back to this thread.

Thank you for this tip. I used your method and it does end up zeroing out the one Class and adding to the targeted Class. However, the targeted Class report shows three transactions and the source Class shows just one. Is this correct?

I've attached an image of a portion of the target class report.

Transferring Balances Between Classes (Funds or Projects)

So to reiterate the issue, you received donations over time for a project or fund (which you treat as a class in QBDT).  The project was completed with some leftover money.  You want to transfer this project (class) balance over to another project (class), but there does not appear to be a simple way to do this in QBDT.  (I agree there should be, but there does not appear to be.)  If you try to do this with a General Journal transaction, when you run the Balance Sheet by Class report, you will have an Unbalanced Classes line at the bottom with nonzero values which messes up the other figures in the report.  Some have said you have to go back and change the class for the multiple deposits but you don’t want to because some were used for the first project expenditures and some portion was leftover.  And besides, it would mess up reports for prior periods.  The problem seems to be QB does not seem to let you change the class of money in a single transaction. (I don’t believe you can do it in a Transfer transaction without creating Unbalanced Classes even though that was suggested.) I believe a good approach is to do two transactions as if they were independent to ”fool” QBDT.

Tranette had the key idea, but I believe her details were unnecessarily complicated.  Her first two transactions cancel one another out and serve no purpose.  Her transactions 3 and 4 are the key steps.

Basically, the logic is:

1. Write a check to move money out of the class (project or fund) that you want to take the funds from.
2. Make a deposit to move the same amount of money into the class (project or fund) that you want the funds to go into.

To do this, Tranette suggested using an expense account for one transaction and an income account for the other.  I don’t like that this would inflate your income and expenses, even though they would be in equal amounts and cancel one another out.  I chose to use a single expense account for both transactions. Try to choose a relevant account.

Tranette also suggested creating a wash asset account.  I felt his was an unnecessary complication and just used our general checking account or both transactions.  When I reconcile this account, I can see the two transactions which net to zero and can mark them both as cleared.

For convenience I created a new vendor “Wash Transfer Between Funds”.  So after creating the Wash Transfer vendor, the steps are:

1. On Banking menu, select Write Checks.
2. At the top of window choose the bank account you decided to use (e.g. my general checking account).
3. As Payee, choose the new Wash Vendor.
4. For Account, choose the expense account you decided to use.
5. Enter the Amount of money you want to change the class for.
6. Enter a Memo like Wash Transfer from Project X to Project Y.
7. Enter the Class as Project X = the class you want the money to come out of.
8. Memorize the transaction if desired as a template for future use.  I called this Wash Trfr Fds Check.
9. Save and Close.
10. On Banking menu, select Make Deposits.
11. At the top of window for Deposit To choose the bank account you decided to use (e.g. my general checking account).
12. For Received From, choose the new Wash Vendor.
13. For From Account, choose the expense account you decided to use.  (Yes, QBDT lets you deposit to an expense account.)
14. Enter a Memo like Wash Transfer from Project X to Project Y.
15. Enter the Class as Project Y = the class you want the money to go into.
16. Enter the Amount of money you want to change the class for.
17. Memorize the transaction if desired as a template for future use.  I called this Wash Trfr Fds Deposit.  (The use of similar names puts them together in the Memorized Transaction List for ease of finding when you want to use them.)
18. Save and Close.

Now, you will find two transactions in your bank register that cancel one another out as far as the asset account goes, but which changed the class of the money.  And you will have two transactions in that expense account which cancel one another account except for changing the class of the money.

Hello,

We create contra accounts to transfer funds between classes. We have a revenue account (our is 4017 Transfer in from other cost centres) and an expense account (8017 transfers to other cost centres) and we tag our appropriate class to each account. Our accountants understand that these offset each other. We do this as well for expensing classes with admin fees for instance: 8011 - contribution to administration and 4011 - admin recovery). It works well. I hope this helps. 

@TranetteThis post is a couple of years old now, so I'm wondering if your 4 step method still works for you? I just started using the quickbooks online version and trying to follow your instructions because I need to do exactly what you are talking about, but my drop downs don't seem to match your descriptions. Maybe you can private message me somehow and walk me thru it?