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userchasemesser
Level 2

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

Understanding the best set up for our business will be helpful so we can start to record revenue and expenses correctly, it needs to play a big part in creating financial statements that are similar to those we had from the previous accounting software Dynamics SL.
Solved
Best answer January 14, 2021

Best Answers
MaryLandT
Moderator

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

I can share some learning about the location and class feature in QuickBooks Online (QBO), userchasemesser.

 

You can split up your business into departments or different properties. Your stores are the locations while different departments within a store are your classes.

 

Here's an example:

 

  • Location: Three different business units within the business.
  • Classes: Income services and products provided within each unit.

In this example, the Locations could be consulting business, installation business, and retail sales. Classes could be the different services you provide and the products that you sell.

 

You need to know where a majority of your business income and expenses are coming from. Then, start tracking this important information using the Locations and Classes feature. 

 

Once they're turned on, you can setup correctly to see which area of the business is thriving, and which isn’t. Whenever you're ready, check these articles for instructions and detailed steps:

 

Let me know if you need additional information by commenting below. I'll be around to help categorize your business locations.

View solution in original post

Catherine_B
QuickBooks Team

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

It's good to hear back from you,  userchasemesser.

 

Yes, you have the option to use the Class tracking feature alone. The option to convert locations to classes is unavailable. You'll want to manually enter them as class and sub-class. Then, you can inactivate the list of locations you don't use. If you've used location instead of classes in your existing transactions, you can edit them since QuickBooks doesn't retroact. 

 

Let me show you how to inactivate a location: 

 

  1. Go to the Gear icon and select All lists.
  2. Click Locations.
  3. Under the ACTION column, click the drop-down.
  4. Select Make inactive.
  5. Click Yes to confirm.

Feel free to mention me if there's anything else that you need help with. Have a good one and stay safe!

View solution in original post

Adrian_A
Moderator

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

On behalf of Catherine_B, you're very much welcome, userchasemesser.

 

It's good to hear that the steps shared by my colleague help you to become prepared to make alterations.

 

If you have some How do I issues, feel free to visit our Help page. We have laid articles there that have detailed information to resolve your concerns.

 

Let us know if there's anything that I can help. Keep safe!

View solution in original post

9 Comments 9
MaryLandT
Moderator

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

I can share some learning about the location and class feature in QuickBooks Online (QBO), userchasemesser.

 

You can split up your business into departments or different properties. Your stores are the locations while different departments within a store are your classes.

 

Here's an example:

 

  • Location: Three different business units within the business.
  • Classes: Income services and products provided within each unit.

In this example, the Locations could be consulting business, installation business, and retail sales. Classes could be the different services you provide and the products that you sell.

 

You need to know where a majority of your business income and expenses are coming from. Then, start tracking this important information using the Locations and Classes feature. 

 

Once they're turned on, you can setup correctly to see which area of the business is thriving, and which isn’t. Whenever you're ready, check these articles for instructions and detailed steps:

 

Let me know if you need additional information by commenting below. I'll be around to help categorize your business locations.

userchasemesser
Level 2

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

Hi MaryLandT, 

Thank you so much for your feedback, so very helpful.

We are a 9 store company with three revenue based departments at each. 

My gut told me that setting up the each of the 9 stores as a location and the departments as three classes was the logical way to go, but after speaking to other QB  users and receiving their suggestion to use only classes and sub-classes for our set up, I thought that checking with the QBO online community might be helpful. So glad to have this resource!

I'm curious, is there a major difference (pros and cons) in the location+class versus class+sub-class set ups when it come to setting up and running reports? How about with booking revenues and expenses - the one item I see here is that expense allocations aren't really possible with the location+class set up, but a journal entry to reclass can remedy this.

Catherine_B
QuickBooks Team

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

Thanks for keeping us posted, userchasemesser.

 

We have reports ready sorted by class and location depending on how you assign your transactions. When you use the location tracking feature if you do business in multiple locations. Also, locations can only be assigned to an entire transaction. Class location tracking, on the other hand, lets you classify the items you sell which you can assign one to each row in the transaction. 

 

When you create expenses, checks, or bills, you still have the option to enter a class or location. Same thing with creating Journal entries. You can turn the feature on and see how it's being displayed on your transactions. 

 

Let me show you how: 

 

  1. Go to the Gear icon and select Account and settings.
  2. Under the Advanced menu, click the Categories section.
  3. Toggle to turn on classes and locations. Select your preference.
  4. Click Save and then Done

Then, you can try opening a sales form or expense transaction. The links shared by my colleague will help you identify which feature best fits your business settings. You'll also want to check out this link for more detail in running and customizing your report

 

Let us know if you need anything else. You take care and have a great day!

userchasemesser
Level 2

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

Hi Catherine B,

 

So appreciate the information you've provided.

I did find that using the location+class set up can be a little cumbersome when inputting bills, as only one location (store) is allowed per bill. A work around was, of course, to record a journal entry to make the allocation.

We don't ever allocate revenue between our stores.

 

If initially using a location+class setup results in a less than efficient process, with the need for too many allocating journal entries, is it at all possible to convert to a class+sub-class setup? Any insight is so valuable.

 

Thank you

Catherine_B
QuickBooks Team

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

It's good to hear back from you,  userchasemesser.

 

Yes, you have the option to use the Class tracking feature alone. The option to convert locations to classes is unavailable. You'll want to manually enter them as class and sub-class. Then, you can inactivate the list of locations you don't use. If you've used location instead of classes in your existing transactions, you can edit them since QuickBooks doesn't retroact. 

 

Let me show you how to inactivate a location: 

 

  1. Go to the Gear icon and select All lists.
  2. Click Locations.
  3. Under the ACTION column, click the drop-down.
  4. Select Make inactive.
  5. Click Yes to confirm.

Feel free to mention me if there's anything else that you need help with. Have a good one and stay safe!

userchasemesser
Level 2

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

Thank you Catherine B,

 

Great info! I now feel prepared to make the alterations if necessary.

Thanks for your fast reply. 

 

Best,

 

Adrian_A
Moderator

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

On behalf of Catherine_B, you're very much welcome, userchasemesser.

 

It's good to hear that the steps shared by my colleague help you to become prepared to make alterations.

 

If you have some How do I issues, feel free to visit our Help page. We have laid articles there that have detailed information to resolve your concerns.

 

Let us know if there's anything that I can help. Keep safe!

RCC23
Level 1

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

Catherine, thank you for the information as I’m suffering a similar issue.
However I’m converting from QBD to QBO and so have physical locations already set up as Classes. And no departmental sub-classes! I’m a technologist/DBA rather than an accountant so this is making me weep slightly. I’m sure my predecessors would have used locations had it been available to them in the past but that is all that classes are currently used for.
 Is it possible to convert my historical classes into locations during the migration phase and then actually introduce departments “properly”  as classes going forwards?

KlentB
QuickBooks Team

We are a new user, and have questions on setup-whether using locations and classes or classes and sub-classes is best for our multi-location, multi department business?

Hi there, RCC23.

 

I understand how convenient to directly convert your classes into locations so you can easily categorize your transactions. Currently, we're unable to do this during the migration process since they're different types of data.

 

Once you move your company file to the online version, you'll have set up your location list. You can start by turning the location tracking feature on. Here's how:

 

  1. Go to the Gear icon.
  2. Choose Account and settings.
  3. Select the Advanced tab.
  4. In the Categories section, click the Edit icon.
  5. Select the checkbox to track locations.
  6. Hit Save, then Done.

After that, follow these steps to add your locations:

 

  1. Go to the Gear icon
  2. Choose All lists.
  3. Select Locations.
  4. Click New, then add the name of the location you want to track.
  5. Hit Save and close.

To learn more about how location works in QuickBooks Online, you can read this article: Set up and use location tracking. I also encourage checking our Getting Started Guide to help set up your company and learn the product basics.

 

Keep me posted if you have any other concerns or further questions. Have a good one.

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