I am working with a client that has different lines of business under one LLC. She asked me how she could see metrics for each line of business to see where her profit was coming from. QuickBooks Online has a feature (a few actually, depending on your subscription level) that allows for that type of tracking. In this blog, I will cover some examples of how you can track different lines of business, product lines, property locations, etc. We’ll also take a look a couple of sample reports using this tracking.
*Disclaimer: this is NOT my client’s example or data because, you know….PRIVACY!
How to Use QuickBooks Online to Track Multiple Lines of Business, Locations, and Product Lines
1. Using Classes for Different Lines of Business
If your company operates multiple lines of business, such as residential and commercial, the Classes feature is your go-to tool in QuickBooks Online. Classes allow you to categorize transactions, income, and expenses by each line of business, giving you a detailed view of the financial performance for each category.
Benefits of Tracking by Classes:
– Separate profit and loss reports for each line of business.
– Easily analyze profitability and expenses for each business category.
– Identify which business line is driving growth or needs attention.
2. Tracking Multiple Locations with Locations Feature
If you operate your business in different physical locations, the Locations feature can be incredibly useful. It works similarly to classes, allowing you to generate reports based on different locations.
Advantages of Location Tracking:
– Allows detailed sales and expenses reporting by location.
– Compare the performance of different locations to identify top performers or areas that need improvement.
– Generate separate profit and loss statements for each location.
3. Using Classes or Locations for Product Lines
If you’re managing multiple product lines, like a bakery offering cakes, pastries, and beverages, QuickBooks gives you the flexibility to track product lines using Classes or Locations, depending on your preference. You can create different classes for each product line or assign product categories to various locations (though class tracking is usually more convenient for product lines).
Why This Matters:
– You can monitor the profitability of each product line.
– It becomes easier to allocate expenses correctly and see which products are driving revenue.
– Reports can be filtered by product line to help in decision-making and strategic planning.
4. Custom Tags for Additional Tracking
If your business needs to track something unique that doesn’t fit into classes or locations, QuickBooks Online also offers Custom Tags. This feature provides flexibility, allowing you to categorize transactions beyond standard class and location labels. This is what I used for my client because she has QuickBooks Simple Start and doesn’t have access to classes or Locations.
How Tags Enhance Reporting:
– Tags let you slice and dice data in a completely customized way.
– You can generate Tagged Transactions reports to analyze trends by any unique identifier you set up.
Here are a couple of examples of how reporting could look like for a business using this functionality:
This is an example of tracking by location: You can see income and expenses for each location
Other Important Articles: Bookkeeping for Real Estate Investors
Conclusion: Simplify Your Business Management with QuickBooks Online
Tracking multiple lines of business, locations, or product lines doesn’t have to be complicated. With QuickBooks Online’s powerful features like Classes, Locations, and Tags, you can easily organize, track, and analyze your business performance across these different segments. Whether you’re managing a single store with multiple product lines or overseeing a multi-location empire, QuickBooks gives you the flexibility to monitor and grow your business with confidence.
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