At Altruic Advisors, we use “tags” in QuickBooks Online to sort and use data for our clients more effectively.
QuickBooks Online defines a tag as a customizable label that lets you track your money however you want, so you can get deeper insights into your business.
You can tag transactions such as invoices, expenses, and bills.
Tags don't impact your books.
Tags are a simple way for you to track and report on the info that matters most to you.
Tags are easy to create and manage in QBO. If you are the creative sort, you can even color code them. Tagging transactions gives you the ability to sort your financial data in many different ways. You can easily produce a Profit & Loss report for tags that will highlight or identify specific data without affecting your financial statements.
Tags can help manage your data in many different ways.
Sort Data Differently Than Your Financial Statements
Let’s say that you need to identify some specific transactions that are eligible for reimbursement. These transactions are spread throughout the year in various General Ledger accounts and class codes, which makes it difficult to pinpoint them on your financial statements. By tagging those transactions as “reimbursable” and then printing a Profit & Loss by Tag report, you can get a clean report of all reimbursable transactions - without affecting your financial statements.
Create More Levels of Categorization
In addition to GL accounts and class codes, tags can add one more level of categorization to your financial records. Consider a nonprofit organization that operates various animal programs. This organization has a GL account for Park Projects, and a class code for Animals. To further identify each type of animal, they use tags. This allows the organization to tag expenses – such as food or supplies – by the type of animal. They can quickly run a Profit & Loss by Tag report at any time and know the exact dollar amount spent on each type of animal.
Identify Transactions That Require Action
Tags can help you flag transactions that may need to be reviewed or require some further action. For example, when preparing your annual 1099s, you may find some questionable or non-reportable transactions. You can tag those transactions and create a detailed report of everything that needs attention.
How to Create Tags in QuickBooks Online
Tags are very easy to create in QuickBooks Online. You can find tags under the “Banking” option on your QBO sidebar. Here you can add a new tag, organize them by groups, or run a report.
You can also create tags directly on an invoice, expense or bill. You can enter existing tags into the “Tag” field, or simply click “Manage Tags” to create a new tag.
Tags are very easy to create and manage in QuickBooks Online. They are useful in sorting data, adding additional levels of customization, and identifying specific transactions. For busy nonprofit organizations, tags can be a great shortcut to finding the information you need. What other ways can you think of to use tags in QBO?