Speaker 1: Hey everybody, in this video we're gonna look at creating expenses that are tracked in QBO by departments. Okay, so let's get started. So first off, you'll navigate to the gear icon and make a selection of account and settings. From there, on the advanced tab, you would then go to the categories group and where it says track locations, this is where you'll want to click the pencil or just click in that section there and you'll want to turn on the track locations option. Now the default is going to be location, so you're gonna want to change it to department to use that location label. If you don't see this section here, that means that you have simple start or essentials and unfortunately this feature is not included in that software package, so you got to have an upgrade to plus or advanced. Okay, so after I hit save and I would hit done, now what you need to do is you need to go add your departments. So that's going to be done on the gear, under all lists, you will see departments here. If you don't see departments when said you see locations, then you know that you've turned on location tracking but you just haven't changed the label to departments. So we'll do that and I've already added three, I want to keep track of finance, operations and sales and marketing. You'll see that there's a new feature that says you're using, right here, three departments of 40, so if you add up all of your classes including subclasses and location tracking you get 40 now and that's recent feature change. So if you're gonna exceed 40 combined, that's gonna be pricey to upgrade there. Now here's a little tip, if you have lots of class you don't need, you can go over to the right and you can make them inactive so that it doesn't count against your 40 total in your plan. Okay, again, that's combined with classes and tracking locations there. All right, so then the next thing you're gonna do is you're gonna want to start using these departments when you pay bills and expenses and write checks and so forth. So if I were to write a check, a manual check, okay, let's say we're gonna be paying Entreport, set up a new vendor here and it's sales, advertising, expense, okay. You'll see that we have this department here, it just so happened that it selected sales and marketing from here, but you've got to be careful that you have the correct expense going out here. Okay, so it's like save and close here. All right, let's now go ahead to the bank feeds. So eventually that would get matched when that check cashed, I would see a $500, I'd want to match it here. But a lot of expenses like on your credit card and so forth, you're not gonna take time to actually enter the expense, you're gonna recognize it as it comes through. So for example, this $150 here that just came through here for business cards, okay. So what I would do here is I would copy this, add a new vendor that is marketing, advertising. And so here it is that I have the ability to select a different topic. And by default, you're not gonna see that necessarily right away. So when you go to the gear icon, you're gonna wanna select department, okay, just like that. And that way you can see them and make the edit in there, okay, to do that. Now you won't get the dropdown here doing that on the matches, but when you're on the add one, you certainly would see that option there, okay. So operations now, what's interesting is what should happen possibly is there might be a scenario where you start to see all of them change and just be very careful that your departments are gonna go and add it in there, okay. So now what? Now if you wanna see all of your expenses broken down by departments, you would navigate to the reports and there's gonna be a profit and loss by department. You might star that so that it goes up to your favorites, make the selection, okay. And for just the few brief ones that I did just with you here, here you have finance, administration, sales market, everything else in your books is going to be not specified if you didn't do that. So I might recommend that you do a timeframe such as this week, for example, run report and then that will help you out here. So I have this $34 expense here. I'm gonna open it up, make the change and I can do that as such in here, awesome, awesome, awesome. So hopefully that gets you thinking about using that feature. Maybe that might work for you. And as a bonus, once you figure out how to set up the profit and loss by departments to start tracking your expense by that, you're probably ready for the next step, which would be to set up a budget. And on the gear, you'll have the ability to go to budgeting again, QBO plus or advanced budgeting. And the neat thing about this is you would have the ability here to divide it by departments. Okay, so you could create a department budget and view the budget by subdividing that budget right there. So that is going to be the next step of breaking it down there. All right, so when you hit next, here we go. I needed to check these all subdivided, hit next. Okay, so then we'll see our accounts here and we'll have a dropdown. So when you're planning your budget, you would first go with, you know, choose a dropdown. So let's go sales and marketing. Okay. Our sales and marketing budget, we might have just to make things easier, $500 a month. Refill it. And then our finance, let's stay where we're at here. Save that. So you're going to say, I'm going to save finance. We're going to go, labor's going to be $1,000 a month budget. This blue arrow is going to copy everything over to the side, save that. And it would take more work, obviously, than we're going to look at right now. But once you go through, and of course you could fill out the income as well, but I'm thinking you want to for sure just focus on the money going out for each department after you save those, then you're going to have a department budget saved and you close out of it. Okay. And then you're going to have the ability to run the budgets versus actuals report or overview report to do that. Wow. All right. Pretty, pretty cool here. I realized that I was putting those numbers in the income of the labor, that was an income account here, but you can see that that's a great opportunity for those of you budgeting nerds out there. I hope this video was helpful to you. And if you like this video, please go ahead and check subscribe, and I'll be happy to see you on my next video. Take care. Bye.