QuickBooks 2011 – New Balance Sheet by Class Report – Part 1

QuickBooks 2011  offers a new advanced Balance Sheet by Class Report that differs from other QuickBooks reports because it gives users the option of selecting “Classes” (fund, location, profit center, or other category) as their column grouping.  This will enable QuickBooks users to perform divisional accounting with QuickBooks, which was previously impossible or required significant duplication of effort.

While this report has been one that has been requested by many QuickBooks users and the accounting professionals who support them, it is not without limitations and drawbacks, making this a report that will be able to be used by some companies and in some instances but not all.

QuickBooks calculates the class allocations for the report each time you run the report. Because of this, you must enter transactions in a very specific way. Follow these guidelines to ensure an accurate report. If you enter transactions differently, the report can produce unexpected results.

General Guidelines for Using the Balance Sheet by Class Report:

Verify/enable class tracking: From the QuickBooks Edit menu -> choose Preferences -> select Accounting -> and click on the Company Preferences tab.  Here you will want to make sure that the Use class tracking and Prompt to assign classes are checked – turned on.

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Set up/modify your Class List: From the Lists menu -> choose Classes, this displays a list of your current classes.

• If you are new to QuickBooks this list might be empty and you will need to create your list of classes.
• If you have been using QuickBooks for a long time there may be entries in the List window.

Be aware that transactions will have to be entered in a very specific manner and there are many data entry transactions that are not supported by the Balance Sheet by Class Report; which still cause additional data manipulation and work, for example:

• Each transaction can only have a single class.

If you enter one class on every transaction, you’ll avoid most unexpected results.
There are a few transactions where you can’t enter a class. In these cases, QuickBooks assigns the class based on the “original” transaction in the work flow.
Important: although you can enter multiple classes on certain transaction, it is NOT recommended that you do so.  If you do enter multiple classes you will see unexpected results in the report.

• Use standard work flows in QuickBooks

When entering transactions, use the windows and order suggested on the QuickBooks Home Page.  For example, standard workflows in QuickBooks include:

• Enter Bills -> Pay Bills
• Create Estimates -> Create Invoices -> Receive Payments -> Record Deposits
• Enter Time -> Pay Employees -> Pay Liabilities -> Process Payroll Forms

Right click on the image to enlarge it.

The biggest hurdle to using the Balance Sheet by Class Report is knowing which transactions are unsupported and learn how to solve the problems they produce.

• Journal entries with “unbalanced” classes.
• Paychecks allocated to multiple classes.
• Payroll liability payments.
• Sales Tax payments.
• Prepayments from customers entered in Receive Payments window.
• Discount entered in Receive Payments Window.
• Discounts entered in Pay Bills Window.
• Using multiple currencies.
• Pay bills with credit (with different classes).
• Use Funds Transfer window to transfer funds between classes.

View this video by Intuit demonstrating the Balance Sheet by Class Report in action.

Over the next few articles we’ll be discussing each of these unsupported transactions and how to work with them.

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