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A
Amaank
January 30, 2020
Question

Splitting Expenses by Location

  • January 30, 2020
  • 1 reply
  • 0 views

Hello, 

 

I am setting up a new Quickbooks Online Plus account for a fitness company that i just purchased. The business has four separate locations that operate under the same legal entity. 

I know that QBO is able to track by location and classes. 

I am trying to understand if it possible to split an expense by each location. 

Examples of what I'm trying to do:

  • An admin expense for Office Supplies split evenly between the four locations 
  • An instructor expense that teaches at different locations during the month

I have been told I cannot split an expense by Location and should instead use Classes.

I was hoping to use 'Classes' to differentiate between different types of revenue sources eg. Revenue from Retail, Revenue from Group sessions etc. 

I also have instructors that go out and do private sessions  - and want to be able to allocate the revenue (and expense) by each location depending on which location the student is registered to. Again I am told that 'Private Sessions' Would need to be its own Class. 

 

Essentially I'm trying to create four separate month end P&Ls by location to determine the profitability of ea without creating four separate QBO accounts. 

I need to use Quickbooks online because my bookkeeper is not in site.

Am i being realistic?

 

Thanks for any guidance you may have. 

 

A. 

 

 

1 reply

A
AndréB12
January 30, 2020

Hey A,

 

It's great to see that you plan on using the full potential of our Classes and Locations feature. They offer an incredibly powerful way to categorize your transactions, and I'm confident they can be used to simplify this aspect of your business. This is certainly a realistic (albeit somewhat ambitious) use of this feature, as this is exactly what it was designed for. We'll have no problem setting this up, and I'll be happy to guide you through it. 

 

To start, you're absolutely right about using Classes. Locations are assigned per transaction, so to split a single between multiple operations would require a separate expense for each location. Classes are best for splitting up a single transaction. It's just a few easy steps to make sure the correct settings are enabled:

  1. Click on your Gear icon and select Account and Settings.
  2. Head to the Advanced tab.
  3. Under Categories check the box for Track classes and select One to each row in transaction under Assign classes.
  4. Click Save then Done.

With this, you'll be able to assign a class to all of your transactions. You can manage your class list at any time from the Gear icon > All lists > Classes. 

 

One thing to note with this method is that expenses will need to be split into individual lines for each class. This will allow you to record a single expense transaction affecting multiple classes. QuickBooks Online makes this part remarkably simple, so you won't even need a calculator! I'd recommend choosing Inclusive of Tax for the Amounts are field, as that'll help keep things consistent. By entering /4 after an amount, you can tell QuickBooks to divide it by four. As an example, here's how I would enter an expense on $123.45 to be split up:

  • 123.45/4
  • (Alternatively, as multiplication) 123.45*0.25

You can also assign a class to each employee in QuickBooks Online Standard Payroll.

 

Let me know if there's anything else I can help you with! 

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