QuickBooks Online Tags: Ultimate Guide to Uses & Limitations

Tags In QuickBooks Online.

Are you wondering how to use QuickBooks Online tags to organize your business bookkeeping? This guide breaks down exactly how tags work, how they compare to classes, and their biggest limitations

Given a profound understanding, users can leverage tags for sophisticated purposes including the classification of transactions and the generation of insightful reports.

 

How Do QuickBooks Online Tags Compare to Other Categorization Options?

QuickBooks Online tags offer a flexible way to track transactions like expenses and invoices by grouping them, with up to 300 tags available to analyze specific business sectors.

Tags vs. Classes in QuickBooks Online

Availability: Unlike class tracking, which requires higher-tier plans, tags are available across all QuickBooks Online subscription levels.

Flexibility: Tags allow for detailed tracking, though unlike classes, they cannot be used for budgeting. 

What are the disadvantages of implementing Class tracking?

Upon initiating the use of classes, it is imperative to assign one to each transaction for the generation of precise reports, even in cases of overhead expenses. Failure to do so will result in the appearance of a "Not specified" column on reports. Additionally, classes are designed for more enduring categories and may not be suitable for temporary categories like events.

Tags vs. Locations in QuickBooks Online

Locations are for permanent, structural, or geographical business segments that impact both P&L and Balance Sheets. Conversely, tags are designed for temporary or fluid tracking of projects and events, impacting only Profit and Loss reports.

What are the drawbacks of utilizing Location tracking?

Each transaction is limited to a single location, and some transaction types do not involve a location at all, which might not suffice if there are income or expenses associated with multiple places. Moreover, transactions lacking a location automatically introduce a "Not Specified" column in reports. 

Custom Fields vs. Tags

While tags can be easily applied to most transactions, custom fields are designed for specific, advanced tracking, such as purchase orders on forms, and are generally limited in standard plans.

 

When Is the Best Time to Use Tags in QuickBooks Online?

Tags have several benefits over classes, locations, and custom fields:

• You only use tags when needed, instead of on every transaction
• You can use tags to group transactions together for reports
• You can assign multiple tags to transactions 
• By creating several tag groups, you can analyze transactions against different criteria
• All versions of QuickBooks Online include up to 300 grouped tags and unlimited ungrouped tags
• You can create up to 40 tag groups in QuickBooks Online Simple Start through Plus, and unlimited groups in QuickBooks Online Advanced
• You can use only one tag per tag group in any transaction, but you can use tags from multiple tag groups, and unlimited ungrouped tags
• You can search for tags in the Transactions by tag screen
• You can filter Tag reports by other fields—such as Class, Location, or Customer—to get more specifically tailored information

Finally, remember that you can still apply tags even if you already use classes, locations, and custom fields.

 

Exploring the Limitations of Tagging  in QuickBooks Online

Tags and printing:

Tags don’t print—they’re for internal use only. 

Tags and Payroll:

Tags don’t appear in QuickBooks Online Payroll.

 

Tags and target lines:

Like locations, tags can’t be added to the target lines.

If a delayed charge has one or more tags, those tags populate the invoice that brings in the delayed charge. However, when two or more delayed charges have different tags, the last delayed charge’s tags will overwrite the tags from the earlier delayed charge on the invoice, even if they’re added simultaneously by clicking Add All.

 

Tags and billable expenses:

Billable expenses don’t bring tags over to an invoice. The billable expense charge that QuickBooks Online generates when you mark an expense as billable doesn’t have a field for tags.