How should you categorize transactions?

To manage your business, you need to be able to track where your income comes from and where your expenses go.

QuickBooks gives you several ways to categorize transactions. You can use just one method or all of them in combination. It saves you time in the long run if you consider this decision carefully at the outset.

• Assign transactions to income or expense accounts:
  • How should you track things you buy? Assign expense accounts on purchases.
  • How should you track things you sell? Use products and services to assign income accounts.
• What if you buy or sell things for separate parts of your business? Use locations.
• What if you buy or sell things for separate parts of your business in the same transaction? Use classes.