QuickBooks Classes Rollout

Organize every expense by team

A rollout brief for Chase Anderson — plain-language primer, decisions needed, and the full account map

Owner

Chase Anderson

Target go-live

May 1, 2026 (flexible)

Your effort

7 hours

Status

Planning — awaiting sign-off

What are QuickBooks Classes?

Every expense in our QuickBooks is one big pile today — we see totals like Repair & Maintenance but not which team spent what.

A Class is just a tag on a transaction — a sticker saying which team spent the money. Once every transaction is tagged, QuickBooks generates a P&L by Class — a separate mini P&L per team, side by side. Same data QB already has; just labeled so it’s sortable.

Why it’s worth 7 hours

Without Classes

Every expense report is a company-wide blob
No way to see what Marketing actually costs us per month
Team budgets are guessing

With Classes

Every department owner gets a monthly P&L with their own numbers
Real, accountable budgets per team
Variance reporting (actual vs. budget) becomes automatic
Thomas gets team-level financial visibility he doesn’t have today

Thomas’s goal: organize costs by department and build budgets for each team and owner. Classes are the prerequisite.

The 6 Classes

Admin & HR

HR, benefits, accounting, legal, recruiting, payroll admin

Operations

Money IN: procurement, quoting, AR/AP, cash, payments, UL certs

Production

Stuff OUT: manufacturing, QC, shipping, fulfillment

Design & Dev

Product design, R&D, CAD/3D files, website

Marketing

Paid media, agency, brand, events, email

Company-wide

Rent, utilities, insurance, owner comp — shared costs

Two notes on these definitions: (1) Thomas is open to “Shared Overhead” instead of “Company-wide” for the last class — your call. “Company-wide” matches our Notion Teams DB; “Shared Overhead” is clearer that it’s expense-only. (2) These definitions are a starting point, not final — flag anything that feels off as you work through the accounts.

People → Class

Class	People
Company-wide	Thomas Brown, Zach Dutton
Operations	Chase Anderson
Marketing	Hannah Backman, Melissa, Bryan Crabill, Rafael Hilel (AdScale)
Production	Alex Reames, Catherine Stewart, Janet Carter, Willy Osen, Eric Schutt, Emma Shine, Scott Baldwin, Sarah Schneemann
Design & Dev	Jeronimo Picerno, Nazarii Shippa, Rexon Abrejal (Upwork)

Decisions we need from you

Thomas has answered a few. The rest are yours to make.

#	Decision	Thomas’s call	Your call
1	Name for the shared bucket	Open — you pick	“Company-wide” or “Shared Overhead”?
2	Go-live date	May 1, 2026 if possible	Confirm May 1 or propose new date
3	Warn-only vs. Required mode	Your call	Start in warn-only (yellow reminder), switch to required (blocks saving) after 60 days? Or required immediately?
4	`5110` Freight Out — all to Production? Or split inbound/outbound?	—	Your recommendation
5	`6020` Officer Compensation — running through 6020 today, or rolled into 6010 Wages?	—	Confirm from QB
6	`6610` Repair & Maintenance ($44K/yr) — workshop (Production) or building (Company-wide)?	—	Your call — where does most of it actually go?
7	`6210` FF&E ($26K/yr) — office furniture (Company-wide) or workshop equipment (Production)?	—	Your call
8	`6850` Charitable Contributions — Company-wide or Marketing?	—	If tied to brand / community presence, Marketing. If generic giving, Company-wide.
9	`6520` Business Meals rule — all-hands → Admin & HR; client/trade-tagged → Marketing. Does that match reality?	—	Confirm or propose a different rule
10	`6510` Travel rule — trade shows → Marketing; supplier visits → Operations; other → traveler’s home class. Does that match reality?	—	Confirm or propose a different rule

Full account mapping

Every expense account sorted into buckets. Flag anything wrong, sign off, and we bulk-reclassify.

CLEAN accounts — bulk-reclassify to one class

→ Marketing

6100 Marketing Expense
6110 Online Advertising
6120 Networking Events
6130 Misc. Marketing Expenses
6140 Marketing — Agency Fees
6234 Professional Services: Marketing — PS

→ Production

5010 Raw Materials
5020 Bulbs
5030 Pillow Cases
5040 Shipping Supplies
5050 Boxes
5060 Packaging Paper
5100 Freight
5300 Inventory Adjustment
5400 Indirect Materials
5410 Hazardous Waste
5500 Product Mold Fees (or D&D if tied to new launches)
COGS (parent)
Scrapped Inventory

→ Operations

5120 Freight In
5130 Import Duties & Taxes
5200 Order Processing Fees
6235 Professional Services: UL Services
6420 Bank & Payment Processing Fees
6920 Taxes: Sales Tax Adjustments
8010 Gas, Parking and Tolls
8020 Vehicle Registration
Melio Credit Card Fee
Melio Services Fee

→ Design & Dev

6233 Professional Services: Website/Product Development

→ Admin & HR

6040 Medical Insurance Contribution
6050 Dental Insurance Contribution
6060 Vision Insurance Contribution
6231 Professional Services: Accounting
6232 Professional Services: Recruiting
6237 Professional Services: Legal
6238 Professional Services: Payroll Fees
6239 Professional Services: 401K Administration Fees
6460 Moving Expenses
6800 Team Development
6950 Unapplied Cash Bill Payment Expense
Reconciliation Discrepancies

→ Company-wide (Shared Overhead)

6310 Janitorial Services
6320 Rent
6330 Utilities (Gas, Electric, Water, Waste)
6340 Business Insurance
6430 Interest
6440 Internet
6450 Phone
6700 Depreciation
6900 Taxes
6910 Taxes: State Taxes
7000 Interest Earned (other income)
7010 Misc. Other Income
7020 EIDL Grant 2020

Pending a decision above

5110 Freight Out → Production (pending Q4)
6020 Officer Compensation → Company-wide (pending Q5)
6210 FF&E → Company-wide or Production (pending Q7)
6610 Repair & Maintenance → Company-wide or Production (pending Q6)
6850 Charitable Contributions → Company-wide or Marketing (pending Q8)

MIXED accounts — need per-transaction or per-payee classification

These don’t get a single class — they need a split rule.

Account	How to classify
`6000` Payroll Expense (parent)	By employee’s home class
`6010` Wages	By employee’s home class (use the People → Class list above)
`6030` Employer Payroll Tax	Follows employee
`6070` Safe Harbor 401K Contributions	Follows employee
`6080` Independent Contractor Labor	By contractor’s project/team
`6090` Reimbursements	Follows employee
`6220` Supplies	Per transaction (office → Admin; workshop → Production)
`6230` Professional Services (parent)	Per vendor — use sub-accounts where possible
`6236` Professional Services: Upwork	By contractor (~$20K/yr — most Design & Dev, some Marketing)
`6240` Misc. Professional Services	Per transaction
`6410` Dues & Subscriptions	Per vendor (~$71K/yr — biggest MIXED bucket; use the 2025 Subscription Fees page as source of truth)
`6510` Travel	Per trip (rule from Q10)
`6520` Business Meals	Per meal (rule from Q9)

Income accounts — open question

Classes can tag revenue too, but it’s usually overkill for a single-business-line company. Recommend: leave Income unclassified for Q2; revisit in Q3 if we want revenue-per-team visibility. If you want to classify revenue instead: Lighting/Hardware/Bulbs/Pillows → Production; Shipping/Expedite/Fees → Operations; Samples → Marketing.

Non-P&L accounts — no Class needed

Balance sheet accounts (assets, liabilities, equity) don’t require a Class. Skip all 1000s, 2000s, 3000s, and payroll liabilities 2300s.

The runbook — 7 hours across 4 days

Day 0

Setup

Go to ⚙ → Advanced → Categories → turn Track classes ON, in Warn mode. Create the 6 Classes under Lists → Classes.

~1 hr

Day 1

Bulk reclassify CLEAN accounts

Use the Reclassify Transactions tool under the ⚙ menu. Work through each CLEAN bucket above, one at a time, reclassifying 2025 + YTD 2026 in batches.

~1.5 hrs

Day 2

MIXED accounts

6010 Wages / payroll → split by employee using the People → Class list. 6236 Upwork → split by contractor. 6410 Dues & Subs → split by vendor using the 2025 Subscription Fees page. Others (Travel, Meals, Supplies) → apply the agreed rules.

~3 hrs

Day 3

Banking rules

Update Banking Rules on recurring vendors to auto-populate the Class going forward.

~1 hr

Day 4

QA & walkthrough

Run P&L by Class report YTD 2026. Spot-check for obvious errors. 15-minute walkthrough with Thomas.

~0.5 hr

Day 60

Flip the switch

Move Class from “warn-only” to “required” so new transactions can’t be saved without one.

—

Success criteria & downstream unlocks

We’ll know it worked when

All P&L accounts have a class-mapping decision documented
2025 + YTD 2026 retroactively classified (100% of CLEAN, 80%+ of MIXED)
Banking rules updated with default Class on recurring vendors
First P&L by Class report runs and the numbers look sensible
2025 Subscriptions page labels reconciled to the 6-class framework

What this unlocks downstream

Marketing budget for Hannah (real one, anchored to 2025 actuals)
Monthly team P&Ls for every department owner
n8n automation: P&L by Class → Notion monthly (no more manual pulls)
Variance reporting (actual vs. budget) once budgets are set

Next step

Review the 10 decisions above and the CLEAN account mapping. Flag anything wrong, fill in the open decisions, and let Thomas know when you’re ready to schedule the 4-day execution.

Full Notion project page: QB Classes Rollout

Appendix — chart of accounts cleanup ideas

Optional. These aren’t blockers for the Classes rollout — but if you’re already in the chart of accounts, a few pieces of housekeeping would make reports significantly tighter. Review at your pace.

A. Immediate fixes (misclassified QB detail types)

These are wrong today and distort reports. All quick one-click fixes.

Account	Currently tagged	Should be	Why it matters
`5500` Product Mold Fees	Expense	COGS	Molds are production tooling — the cost goes into product, not opex. Wrong tag understates COGS and overstates gross margin.
`6238` Payroll Fees	Dues & subscriptions	Legal & Professional Fees	Payroll admin is a professional service, not a subscription.
`6239` 401K Admin Fees	Dues & subscriptions	Legal & Professional Fees	Same — fiduciary admin is a pro service.
Melio Credit Card Fee	Utilities	Bank Charges	Nothing utility about it. See merge recommendation below.
Melio Services Fee	Utilities	Bank Charges	Same.
`6700` Depreciation	Other Expense	Expense (or renumber to 7100)	6000s should be Expense type; the mismatch makes P&L comparison jumpy.

B. Number the unnumbered accounts

Eleven accounts currently have no account number. Here’s where each would go:

Current name	Proposed #	Destination	Combine?
Amazon Credit	`2103`	Credit cards (with Amex 2100, US Bank 2101–2102)	No — but confirm what this actually is (card vs. LOC vs. deposit balance)
Billable Expense Income	`4110`	End of Service Income range	No — QBO auto-generates this
Restocking Fees	`4120`	Service Income range	No — positive revenue
Discounts	`4900`	Bottom of Income (by convention)	No — contra-revenue, different sign than Restocking
Cost of Goods Sold (orphan)	—	Deprecate	Reclass transactions into 5010–5410, then archive — QBO default account, not legit
Scrapped Inventory	`5310`	Adjacent to 5300 Inventory Adjustment	No — keep separate for tax-treatment clarity
Melio Credit Card Fee	—	Merge into 6420	Yes — same thing as Bank & Payment Processing Fees
Melio Services Fee	—	Merge into 6420	Yes — same
Purchases	—	Deprecate	Another QBO default catch-all; reclass into real accounts, then archive
Uncategorized Expense	—	Archive	QBO auto-created; never legitimate
Reconciliation Discrepancies	`8030`	Other Expense, with 8010/8020	No

Net result: 11 floating accounts → 6 numbered + 5 eliminated. Tighter chart, no information loss.

C. Retire zombie accounts

Any account with zero 2024 + 2025 activity. 15-minute audit, bulk archive. Also kill anything labeled “Uncategorized *” and any other QBO auto-created defaults that never got used.

D. Strategic cleanup (Q3 project, worth discussing with your outside accountant first)

Structural changes that shouldn’t be rushed because they can break year-over-year P&L comparability if done incorrectly.

Add parent accounts for grouping: Facilities parent → 6310 Janitorial, 6320 Rent, 6330 Utilities, 6340 Insurance, 6440 Internet, 6450 Phone, 6610 R&M. Prepaid Insurance parent → 1304–1307. Vehicle parent → 8010 + 8020.
Split the 6233 mega-bucket (Website / Software / Product Development). Sub-accounts let D&D actually see where its spend goes.
Build Income hierarchy: Product Sales parent → 4000–4040. Service Income parent → 4050–4090 + Billable Expense + Restocking. Lets QB report product vs. service revenue natively.
Move 6080 Independent Contractor Labor under the 6000 Payroll parent (currently orphaned between 6070 and 6090).
Reconcile 6140 Marketing-Agency Fees vs. 6234 Marketing-PS. Agency fees are a professional service; either consolidate or write a clear rule for which invoice goes where.
4040 Room & Board Retail Sales is single-channel. If other retail channels exist (Etsy, Amazon, trade shows), each should have its own income account — or segment via Shopify tags.

E. Rename for plain English

Small change, much easier onboarding for new hires:

“FF&E” → “Furniture, Fixtures & Equipment”
“Business Meal Expense” → “Business Meals” (drop the redundant “Expense”)
“Marketing - PS” → “Marketing Professional Services”
Audit “Misc. Marketing Expenses” — what’s actually in it? Most “Misc” accounts become catch-all junk drawers

Suggested sequencing: Sections A, B, and C are safe to bundle into the Classes rollout — you’re already in the chart of accounts, ~45 minutes of extra work, immediate report accuracy improvement. Sections D and E are worth a 30-minute conversation with your outside accountant before executing, because incorrectly migrating accounts can break year-over-year comparability.