It is happening again! I know you have heard me say “this is one of my favorite features”, but I am going to say it again, THIS is ONE of My FAVORITE Features. This tool saves oodles of time by circumventing opening every transaction and re-classing on an individual transaction basis. Reclassify Transactions in QuickBooks Online Accountant (QBOA) allows you to choose a group of transactions and re-class them into another account. The Reclassify Transactions tool works by searching a group of transactions based upon a sort from either a Balance Sheet or Profit and Loss view. This feature filters to one, or the other, but not both at the same time. Keep in mind you can reclassify from Balance Sheet to Profit and Loss or vise versa.
Here are some examples of my favorite uses of the Reclassify Transactions tool:
- A client has placed a group of transactions into and 'inappropriate' account. An example of this would be when a plumber purchased items to be used on a client's job but has posted these purchases to “supplies” and expensed them instead of posting them to “Cost of Goods Sold”. These purchases can be grabbed in one swoop, and “Reclassified” using this QBOA tool.
QBOA Reclassify tool
- In another example, a parent (or header) account was used instead of the sub-account. So this might not be a BIG deal, but why not fix it when it’s so easy to correct with this tool? The place I see this the most is for Auto Expenses. Often our clients will call all their vehicle-related expenses Auto Expense, when in reality part of these expenses are for gas, repairs, tags and occasionally you might even them spilling in a fixed-asset like a bed liner or trailer purchase.
- Loans are frequently difficult for clients to keep track of, and sometimes they get confused when choosing the correct loan for a payment. I can quickly look at the description of the loan payment if it’s a bank feed and decide which loan should be corrected, or looking at the bank statement or dollar amount to determine which loan should get credit for a particular payment.
Reclassify improper loan account
The super cool thing is if you find a better solution later there are no ill effects of moving the transactions and reclassifying them again, if needed.
To use this QBOA tool follow these simple steps:
- Open Accountant Tool box select Reclassify Transactions
Reclassify tool Step 1
- Choose date range and your view (Balance Sheet Accounts or Profit and Loss Accounts), then
- Select specific account to view transactions, now
- Choose the transactions to re-class,
- From the drop down menu choose the account to re-class the transactions to.
Reclassify tool Step 2
- When you have made your selections, click the blue Reclassify button, then the QBOA 'Reclassify Transactions' tool makes the changes in a snap.
So when your client assigns a transaction to the wrong account, or when you are reviewing their file at the end of the year and you recognize there is a better 'accounting' fit, QBOA Reclassify Transactions is a great time saving tool to make the needed corrections.
Note and Disclosure: As with many of the QBOA tools, their use must be evaluated in light of the financial reporting implications that their use may produce. Carefully consider each situation individually to determine applicability of use in light of any prior financial reporting and/or tax implications.