How to categorize transactions in QuickBooks Online

Introduction

In order to keep your finances in order, it's important to categorize your transactions in QuickBooks Online. This will make it easier to find the information you need when you're preparing your taxes. There are many different ways to categorize transactions, and the method that's best for you will depend on the way that you do business. In this article, we will discuss the 4 most common methods of how to categorize your transactions.

Methods to categorize transactions

1. By type of transaction

The first way to categorize your transactions is by type of transaction. This includes income, expenses, assets, and liabilities. Income can be categorized as either revenue or gains, and expenses can be categorized as either operating expenses or capital expenses. Assets can be classified as either current assets or fixed assets, and liabilities can be classified as either current liabilities or long-term liabilities.

2. By date

The second way to categorize your transactions is by date. This includes transactions that occurred in the current fiscal year, last fiscal year, and previous fiscal years. Transactions in the current fiscal year are categorized as current, those in the last fiscal year are categorized as past, and those in the previous fiscal years are categorized as historical.

3. By account

The third way to categorize your transactions is by account. This includes all of your accounts, both general and specific. Transactions can be categorized as either debits or credits, and they can be sorted by account number or name.

4. By class

The fourth way to categorize your transactions is by class. This includes all of your classes, both general and specific. Transactions can be categorized as either income, expenses, assets, or liabilities, and they can be sorted by class name or number.

Conclusion

Which method of categorizing transactions is best for you will depend on the way that you do business. However, the most common methods are by type of transaction, date, account, and class. By using one of these methods, you can keep your books in order and make it easier to find the information you need when preparing your taxes!