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Thought Leadership from the Leaders in Virtual Accounting and Bookkeeping Services
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16, January
2019

Accounting Tips: Understand Differences Between Divisions and Classes

The ability to sort accounting transactions by user-defined divisions and classes in QuickBooks is a great way to track and analyze what areas of your business are the most profitable. Unfortunately, many businesses and accounting specialists aren’t taking full advantage of this option because they don’t clearly understand the difference between divisions and classes and how to use them. Hopefully the following examples will clear up some of the confusion.

Using Divisions in QuickBooks

If you want your accounting or outsourced bookkeeping and controller services to provide separate profit and loss reports for different areas of your business, creating divisions will allow them to do that. Here are examples of divisions setups in QuickBooks for different industry models:

  • Accounting Services: Payroll, Accounts Payable, Billing, Full Service
  • Mechanical Contractor: Residential Service, Commercial Service, New Construction
  • Construction Contractor: Bathrooms, Kitchens, Whole House, Repairs

As you can see with the mechanical contractor example, how you choose to divide your services is totally up to you and may be different from one business to another. By selecting a division when creating an invoice, the revenue from the invoice will be appropriately tagged for that division. Select a division when entering a vendor bill to log costs of materials or services specific to that task. With this process in place, a business can then run Division Profit & Loss Reports, showing the income, costs and gross profit on distinct roles within the company.

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31, October
2018

Avoid Common Accounting Mistakes that Can Cost Your Company Big

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17, October
2018

Cash or Accrual Accounting: How to Decide and What Happens if You Change Your Mind?

The accounting method you choose to use can determine you show a profit in a given year. This directly affects your.

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11, May
2018

Profits vs. Profitability: Why You Need to Track Profit Margins

You don’t need an MBA to know there are two basic ways to increase your profits: increase revenues or reduce costs..

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28, February
2018

How to Scale Internal Controls as Your Company Grows

Too many businesses never think about internal controls until they start losing efficiency, investors demand it, or.

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31, January
2018

Top 10 Payroll Mistakes You're Probably Making

Do you count gift cards given to employees as cash payments? Have a system for easy reimbursement for taxes when an.

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14, December
2017

How to Scale Your Multi-Generational Business

Keeping the family business thriving through the generations is living the dream. From small local companies to vast.

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