Classes are the only solution
if you want to classify income and expenses by categories that span multiple
accounts in your chart of accounts or multiple types of customers, jobs, and
vendors. For example, classes help you categorize by business unit, department,
location, partner, or consultant. They also come in handy for tracking the
Allocation of Functional Expenses that nonprofit
organizations have to show on financial
statements. Not everyone needs classes, so don’t feel that you have to use them;
Tip: Before you decide to turn on classes, use
QuickBooks without them for a few weeks or months. If it turns out that you can
generate all the reports you need without classes, don’t burden yourself with another
field to fill in. If you work without classes and then decide to use them after
all, you can go back and edit past transactions to assign classes to them, or
just start using classes at the beginning of a new fiscal period.
If you choose to work with
classes, be sure to follow these guidelines to get the most out of them:
• Pick one use for classes. QuickBooks has only one list of classes, so every class should
represent the same type of classification. Moreover, you can assign just one
class to a transaction, so classes add only one additional way to categorize your
transactions. For example, once you assign a class for a business unit to a transaction,
there’s no way to assign another class—to identify the office branch, say—to
the same transaction.
• Use classes consistently. Make sure to use classes
on every transaction. Otherwise, your
class-based reports won’t be accurate.
Tip: QuickBooks can remind you to enter a class
for a transaction if you forget. Choose Edit➝ Preferences➝Accounting, click the Company Preferences
tab, and then turn on the “Prompt to assign classes” checkbox. That way, if you
try to save a transaction without an entry in the Class field, QuickBooks gives
you a chance to add the class (or save the transaction without one).
• Create a catch-all class. Set up a class like Other
so that you can still classify transactions even if they don’t fit into any of
the specific classes you’ve defined.
Here’s how to set up
classes:
1. Turn on the
class-tracking feature. First, you need to check
whether class tracking is turned on. To do that, in the main QuickBooks menu
bar, click Lists. If the class-tracking feature is turned off, you won’t see
the Class List command in the menu.
To turn on class tracking,
you need to be a QuickBooks administrator, because classes affect everyone in
your organization who uses the program. (If you aren’t a QuickBooks
administrator, you’ll have to convince someone who is to turn on classes.) To
do so, choose Edit➝Preferences➝Accounting, click the Company Preferences tab, and then turn on
the “Use class tracking” checkbox. When you do, QuickBooks automatically turns
on the “Prompt to assign classes” checkbox; turn it off if you don’t want to be
reminded to assign classes. Click OK to close the Preferences window.
2. In the main QuickBooks
menu bar, choose Lists➝Class List.
The Class List window
opens. chapter 6: setting up other
quickbooks lists 137 ╉Price Levels
3. In the Class List
window, press Ctrl+N (or click Class and then choose New on the drop-down
menu). The New Class dialog box opens.
4. In the Class Name box,
type the name of the class. If you want to create a
class that’s the subclasses to a parent (to set up subclasses for each region
within a business unit, say), turn on the “Subclass of ” checkbox. Then, in the
drop-down list, choose the parent class you want.
Tip: You can create all of your classes at once
by filling in the fields for one class and then clicking Next to create another
one.
5. Click Next to create
another class, or click OK to close the New Class dialog box. If you realize you need another class while working on a
transaction, you can create an entry by choosing <Add New> in the Class drop-down
list, as you can see in Figure 6-2.
Figure 6-2:╇ After you turn on class tracking, every
transaction you create includes a Class field. To assign a class to a
transaction, choose one of the classes from the drop-down list or choose <Add New>.
Price Levels
Whether you give your
favorite customers price breaks or increase other customers’ charges because
they keep asking for “just one more thing,” you can apply discounts and markups
when you create invoices. But remembering who gets discounts and what
percentage you apply is tough when you have a lot of customers, and it’s bad form
to mark up a favorite customer’s prices by mistake. Say hello to QuickBooks’
Price Level List.
When you define price
levels and assign them to customers, QuickBooks takes care of adjusting the
prices on every invoice you create. You can also apply a price level to
specific lines on invoices to mark up or discount individual items. •‰Price Levels
Creating a Price
Level
To create a price level, do
the following:
1. If the Price Level
preference isn’t already on, turn it on. If QuickBooks’ Price Level
preference is turned off, you won’t see the Price Level List command in the
Lists menu. To turn it on, choose Edit➝Preferences➝Sales & Customers, and then click the Company Preferences tab.
Turn on the “Use price levels” checkbox, and then click OK.
2. Choose Lists➝Price Level List. The Price Level List window
opens.
3. In the Price Level List
window, press Ctrl+N or click Price Level➝New. The New Price Level dialog
box, shown in Figure 6-3, opens.
4. In the Price Level Name
box, type a name for the level. If you have a fixed set of
discounts, you might name the various levels by the percentage, like Discount
10 and Discount 20, for example. An alternative is to name them by their
purpose, like Customer Loyalty or User Group Discount. That way, it’s easy to
change the discount amount without changing the price level’s name.
5. In the “This price
level will” box, choose “increase” or “decrease” based on whether you want the
price level to mark up or discount items, and then enter the percentage. In QuickBooks Pro, the Price Level Type box is automatically set
to Fixed % because you can create price levels only with fixed-percentage
increases or decreases, which (not surprisingly) increase or decrease prices by
a fixed percentage.
Figure 6-3:╇ Think of fixed-percentage price levels as
standard discounts or markups. For example, you can create a price level called
Extras to boost prices by 20 percent. Then, assign that price level in the
customer record for every nitpicker you work for. (Although price level names
don’t appear on your customer invoices, it’s still a good idea to choose names
that are meaningful without being rude.) Price Levels
In QuickBooks Premier and
Enterprise, you can create price levels that apply to individual items in your
Item List. To do that, in the Price Level Type dropdown list shown in Figure
6-3, choose Per Item. The New Price Level dialog box then displays a table
containing all your items. In the Custom Price column, type the price for an
item at that price level. For example, suppose you sell calendars to retail
stores for $5 each. The Standard Price column would show 5.00 for the calendar
item. If you’re creating a price level for nonprofit organizations, you could
type 3.50 in the item’s Custom Price
cell so that a nonprofit would pay only $3.50 for a calendar.
If you want to apply
percentages to several items in the list, there’s a shortcut for calculating
custom prices: Turn on the checkboxes for the items that use the same
percentage increase or decrease. Then, in the “Adjust price of marked items to
be” box, type the percentage, and in the drop-down list next to it, choose
“lower” or “higher”. You can then use the “than its” drop-down list to tell QuickBooks
to calculate the price level based on the standard price, the cost, or the current
custom price. When you click the Adjust button, QuickBooks fills in the Custom
Price cells for the marked items with the new custom prices. To apply different
percentages to another set of items, clear any checkmarks and then select the
next set of items and repeat the steps to define the percentage adjustment.
Note: If you work with more than one currency and
use QuickBooks Premier or Enterprise, you can create price levels for
individual items to set their prices in different currencies. Here’s how: In
the New Price Level dialog box, choose the currency in the Currency drop-down
list. Then, in the Custom Price cell, type the price for the item in the
foreign currency. After that, when you add the item to an invoice, choose the currency
price level in the Rate drop-down list and QuickBooks recalculates the price.
6. For percentage price
levels, in the “Round up to nearest” drop-down list, choose the type of
rounding you want to apply. The “Round up to nearest”
feature is handy if the percentages you apply result in fractions of pennies or
amounts too small to bother with. This setting lets you round discounts to
pennies, nickels, dimes, quarters, 50 cents, and even whole dollars (if you really hate making change).
7. Click OK to close the
New Price Level dialog box. To create another price
level, repeat steps 3–7.
Note: You can’t create price levels on the fly
while you’re creating an invoice. The easiest solution to a missing price level
is to adjust the price on the invoice manually. Then, after the invoice is
done, add the price level to your Price Level List. ╉╉Customer and Vendor
Profile Lists
Applying Price Levels
You can apply price levels
to invoices in two ways:
• Applying a price level to a customer record tells QuickBooks to automatically adjust all the prices on a new
invoice for that customer by that price level percentage .
• You can apply a price level to line items in an invoice whether or not a customer has a standard price level. To do so, in
the Create Invoices dialog box, click an item’s Rate cell, click the down arrow
that appears, and then choose the price level you want from the drop-down list.
POWER USERS’
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