QuickBooks users need to prepare and maintain their client’s data for the purpose of taxes.
Any inconsistencies with in side the information of a transaction may be further re-classified. In QuickBooks, the subsequent may be accomplished via means of the Reclassify Transactions Tool.
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The aim of the Reclassifying Transactions Tool is to correct any transactions that are incorrectly paired up with classes or accounts in a client’s book. The tool reclassifies income, Cost goods, expenses and balance sheet accounts.
How to Reclassify Accounts in QuickBooks Desktop?
In order to reclassify the proceedings in QuickBooks Desktop, you can go by selecting the fiscal year to review the transactions and reclassify the same.
Step 1: Selecting the Fiscal Year the Users need to Review
The following steps are mentioned to enlighten you on how to reclassify numerous transactions or if you have failed to update the fiscal year date range:
- For the first step, proceed to the “Accountant” menu.
- Now, you have to pick out the “Client Date Review” alternative from the screen.
- A window will appear, navigate the section of “Review Date range”.
- After scrolling the range, now pick the date range of the transactions to be reviewed.
- A message with “Review Basis” will appear on the window.
- Now, continue and select “Cash” or “Accrual” from the same.
- After the subsequent step, choose the “Modify Review” option.
- In the segment of “Account Balances“, search the Reclassify Transaction Tab.
- Hit on “Status” and drop-down option to set the status as “In Progress“.
- Press the “Close” button, once done with the following steps.
Step 2: To Review the Client’s Transactions
Here’s how to do it:
- From the “Accountant” menu, pick out the “Client Data Review” alternative.
- Now, select the “Reclassify Transaction“.
- After selecting the tab, from the “Accounts tab” click on the “View” drop-down menu.
- Proceed further by selecting your account type from the appeared window.
- On the right side, you will be able to see the transaction after you select the account to view its transactions.
- Now, you can choose the “Name” from the drop-down menu from the “Transactions” tab.
- Once done, pick out the transaction you wish to review.
- Now, you will be able to view the Transaction list.
Step 3: To Accordingly Reclassify the Transactions
Redirect the transactions to the right records in order to edit or re-enter.
- You can start by selecting a single transaction or choose the “Select all” option.
- For reclassifying the transaction via ways of means of account, tab on the “Account to” checkbox.
- Click on the record where you want to switch the transaction.
- Select the drop-down menu present next to the Account to option.
- If you wish to reclassify by class then choose the “Click to” checkbox.
- After this, for a new class the click on the drop-down menu next to Click to option.
- To complete, hit the “Reclassify” button.
How to Batch Reclassifying Transactions in QuickBooks Online?
In order to Reclassify transactions, you need to be vigilant enough to know what you want to reclassify in particular. After alteration of the transactions through a profit and loss report, you can use the tool to move the same into another account.
Reclassification of Transactions by Running Profit & Loss Report:
- The first step is to open your client’s “QuickBooks Online” company.
- Now, proceed to the “Accountant tool” icon.
- After selecting the icon, you need to press the “Reclassify Transaction” option.
- A window with Account types drop-down menu will appear.
- To view expenses and income, select “Profit and Loss” from the menu.
- You can carry out this step by selecting the “Balance sheet” option as well.
- Now, click and choose the account with the transaction you wish to modify.
- Use of the following filters can also be accessed:
- Class: click on “class tracking” if it does not appear.
- Type: filter by transaction type.
- Modify: filter by transactions you will be able to modify.
- Vendor/Customer: filter for a specific vendor or customer.
- For viewing the paid transactions, proceed by pressing the “Cash” option.
- For viewing both paid and unpaid transactions, proceed by hitting on the “Accrual” option.
- After the subsequent step, hit on the “Find Transactions“.
- You now need to select each box for the transaction you wish to change.
- Once done, click on “Reclassify“.
- Now to move the transactions, pick out the account from the drop-down menu or create a new one.
- As for the very last step, hit the “Apply” button.
Reclassification of Transactions via Way of Means of Location
- Start by logging in to your client’s “QuickBooks Online” company.
- Then go to the “Settings” option.
- Now, pick out the “Account and Settings” alternative.
- After a window will appear, from there proceed and press on the “Advanced” tab.
- From the “Advanced” tab window hit on the “Categories” option.
- After this, press “Edit“.
- Now after the subsequent step, move to the option naming “Track-locations“.
- You need to navigate to the “Location label” drop-down menu and select “Location“.
- Now, hit the “Save” option.
Number of Transactions you Can and Cannot Move
To relocate the transactions the tool i.e, Reclassify Transactions is used. However, a few sorts of transactions cannot be relocated due to the linking process with certain accounts.
Here is a list describing different types of transactions you can and can’t move:
- There will appear a limitation to changing the class or account of inventory because they are already linked to the asset inventory accounts.
- You will be blocked from being able to carry out any changes with the payment account, such as credit cards or the bank account.
- Users can, however, make changes with cash memos, classes for invoices, bills and cheques.
- The accounts are prohibited from any change.
- You can access the payroll transactions in QuickBooks Payroll without facing any complex glitches.
- There is room for change in the expense accounts for the respective, billable transactions.
- A restriction is there to not change the income-related transactions.
For reclassifying any account or concerned transaction, you can without a doubt proceed with the help of Reclassify Transactions Tool.
The following mentioned steps are provided for better grasping and to rectify and resolve any complications while using the tool.
If you are still facing any issues or have doubts concerning the transactions tool, you can get in touch with the Dancing Numbers helpdesk. The team members are skilled and are available at the earliest.
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Will the Reclassification Process Work with the Accounts Payable?
Unfortunately, the answer is No, the reclassification process does not support any change for the accounts payable or accounts receivable i.e, invoices and bills. The users will also be unable to change the type or record of transactions that are interrelated.
Can the Reclassify Transaction Tool Work for the Firm’s Transaction?
Yes, you can use the tool for each firm’s transactions in the QuickBooks Online Accountant Version.
Here’s how to do the same:
Remain on the firm’s page.
Next, go and choose the “Accountant Tools” option from the page.
Once done, hit on the “Reclassify Transactions” to end.
Is there a need to Follow up on the can and Cannot for the Movement of Transactions?
You are advised to browse all the respective information of can and cannot before carrying out the movement of any transactions. It will help the user to get clarity and skip common mistakes.