Whether you are running a small business, or holds a large entrepreneur, expenses are the inevitable part of your business. One of the key aspects of running the successful business is the proper categorization of expenses. Expense category in QuickBooks significantly enhances the expense category by properly categorizing the different platform fess properly. It enhances the transparency and profitability. It not only saves time but also reduces the chances of error. So, if you are looking to learn how to categorize expenses in QuickBooks, go through this post carefully.
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What Do You Mean by Expense Category in QuickBooks?
Expenses are the costs of running the operations in business. In simple terms, it is the amount spent by the business to acquire something. They contains the daily transactions, cost of buying something, staff wages, losses from investments. Anyone can make an expense in business, but having a proper track of expenses is mandatory.
Business category in QuickBooks is likely to track and keep record different transactions. You can put marketing costs, supplies, travel expenses and other expenses in this category. Having a well accurate and updated business expenses will help in the growth of your businesses.
In QuickBooks, categories are the secret weapon to classify the businesses products and services correctly. We can assume category as a digital label that helps you in tracking and organizing the sales more efficiently and effectively.
Categories in QuickBooks online are important as they help in:
• Income Categorization
• Transaction Tagging
• Expense tracking
• Category-specific Attachments
• Filtering transactions by category
• Subcategories management
How to categorize expenses in QuickBooks?
Categorizing the expenses in business is important as they helps in maintaining the accurate financial records. You can categorize the expenses in QuickBooks either manually or by using the receipt capture feature.
Manual categorization of Expenses in QuickBooks
Categorizing the expenses in QuickBooks manually is important as they provide the comprehensive overview of the company’s financial activities. They can effectively track their spending patterns, cost saving opportunities. The accurate categorization will allow the businesses to take the well informed decision by facilitating the budgeting and forecasting.
The steps that will help you in categorizing the expenses in QuickBooks are:
• Log into your QuickBooks account by using your credentials.
• After that, click on the Expenses tab on the left panel.
• Now, click on the vendor and then choose the Expenses option.
• Now, put a tick mark on the date column for the transactions you wish to categorize.
• Click on the drop-down arrow and choose the categorized selected option.
• Lastly, pick a category and press the Apply button.
In case the transactions are downloaded from the bank, you can categorize them by using the steps mentioned below:
• Click on the banking at the left panel and look for the expenses you wish to categorize.
• Put a tick mark on the date column and choose the category.
• Lastly, press the Save button to make the changes.
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Using the Receipt Capture Feature
This feature will allow the categorization of expenses by automatically extracting the expense details. This feature simplifies the expense tracking and classification process. The steps that will guide you through the process include:
• Take a photo of the receipt and upload it to QuickBooks.
• QuickBooks will automatically extract information such as date, vendor, and amount.
The automatic extracting feature will reduce the manual process, which further reduces the risk of human error.
How to Add New Expense Categories in QuickBooks Online?
Adding a new expense in QuickBooks online is an important part. The steps that will help you in adding the expenses in QuickBooks online include:
1. Log into your QuickBooks account account using the admin credentials.
2. Now, click on the “Accounting” button at the top menu bar and then pick the “Charts of accounts” option.
3. In the charts of accounts, choose the “new” option.
4. Select “expense” or other expenses for the type of account in the newly prompted window.
5. Click on the “detail type” and provide the name of the expense and provide the necessary details.
6. Lastly, press the Save button to add the expense in QuickBooks online.
How to Edit Expense Categories in QuickBooks Online?
At times, you need to edit the expense categories in QuickBooks online. By simply following the steps below, you can change/ edit the expenses in QuickBooks online.
• Open your QuickBooks account using the admin credentials and open the charts of accounts.
• Now, look for the expense category in which you wish to make changes.
• Thereafter, click on the drop-down button beside the Run report.
• Further, click on the edit button and make changes in the expense category.
• Lastly, press the SAVE button when all editing is done.
How to create a New Expense Category in QuickBooks Online?
Categories in QuickBooks are more than just digital labels. Whenever you create a new expense category in QuickBooks online, you will encounter the following fields:
• Name of the category
• Decide whether the category is active or not
• Set it as a subcategory in the drop-down
The steps to add a new expense category in QuickBooks are a breeze. The steps that will help you in creating a new expense category include:
• Log into the QuickBooks online account and then navigate to the charts of accounts page. To ensure the smooth process, make sure you switch to the business account.
• In the company, click on the Gear icon and then select charts of accounts.
• Now, on the transaction page, click on the New button to open the account window.
• Further, click on the account type drop-down and choose the expenses option.
• Now, from the detail type, choose the category you wish to add and enter a new name for the new account.
• Provide the necessary details and the description.
• Lastly, press the Save button to add the new expense category.
Conclusion
Categories are the game changers for the QuickBooks online. They bring you clarity by correctly grouping the products and services in the sales reports. No matter how big or small your business is, tracking expenses is important to keep your business healthy and in good shape.
Good expense tracking will help you identify the area of loss in your business. Hopefully, this blog provides the right information about the expense category in QuickBooks. However, if you still have any doubts or need expert advice, don’t hesitate to call our experts at +1-844-248-9739.
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