How to Reclassify Transactions in QuickBooks Desktop & Online?

Reclassify Transactions in QuickBooks

In QuickBooks, it is necessary to keep the client’s books prepared for tax purposes. If you find the details of the transaction incorrect, you can classify the transactions again. All you have to do is to use the Reclassify Transactions tool and correct the transactions that are assigned to incorrect classes or accounts in the book of clients. If you want to know how to reclassify transactions in QuickBooks for the Online and Desktop versions, we are here to enlighten you with relevant details.

The following guide is going to talk about where is the reclassify transactions tool in QuickBooks and how to batch reclassify transactions in QuickBooks Desktop and Online.

How to Reclassify Accounts in QuickBooks Desktop?

To reclassify the accounts or transactions in QuickBooks Desktop, you will have to perform a series of steps. First of all, you need to choose the fiscal year that you wish to review. Then, review your transactions and reclassify them. Let’s have a look at the following steps on how to reclassify multiple transactions in QuickBooks Enterprise, Desktop Accountant, or Accountant Enterprise.

Step 1: Choose the Fiscal Year

If you have not set the date range or fiscal year of transactions then you can set it up. By doing so, you can select the fiscal year that you wish to review. Follow these steps for that:

  • Go to the “Accountant” menu.
  • Then, choose the “Client Data Review” option.
  • Click on the “Client Data Review” option.
  • Pick the date range of your transactions using the “Review Date Range” option.
  • Now, select the “Cash” or “Accrual” from the “Review Basis” option.
  • Here, you can hit the “Modify Review” option.
  • After this, you can go to the “Account Balances” section and choose the “Reclassify Transactions” option.
  • Once done, click on the “Status” drop-down option to set the status as “In Progress”.
  • Then, click on the “Close” button.

Step 2: Review the Client’s Transactions

After you choose the fiscal year for your transactions, you can now review the transactions so that you can reclassify them if needed. Here are the steps to review the transactions:

  • Click on the “Accountant” menu.
  • Then, choose the “Client Data Review” option.
  • Select the “Reclassify Transactions” option.
  • Click on the “View” drop-down menu in the “Accounts” tab.
  • Here, you can choose your account type.
  • Once done, click on the account to see the transaction. It will appear on the right pane.
  • From the “Transactions” tab, you can click on the “Name” drop-down menu to choose the name.
  • After this, select which transaction you wish to review. This can be selected through the “Show transactions” drop-down menu.
  • Here, you can review the transactions list.

Please Note: Users cannot reclassify the transactions that use accountants’ receivable or payable accounts such as bills and invoices. In addition, you cannot modify the account or class of any transactions connected with other transactions.

Step 3: Reclassify the Transactions

If you find any kind of discrepancies, you can correct the transactions and move them to the appropriate class or account. Here, we will show you how to reclassify the transactions by class and account in QuickBooks Desktop.

  • Choose the transaction or click on the “Select All” option.
  • If you want to reclassify the transaction by account, click on the “Account to” checkbox.
  • Then, you can choose the “Account to” drop-down menu and search for the account where you wish to move your transactions.
  • In case you wish to reclassify the transactions by class then click on the “Class to” drop-down menu.
  • Choose the “Class to” drop-down menu.
  • After this, choose the new class for your transaction.
  • Once done, hit the “Reclassify” button.

As you perform these steps, the transactions or account will be reclassified successfully in QuickBooks Desktop. Now you have learned how to batch reclassify transactions in QuickBooks Desktop, Enterprise, and Accountant Enterprise.

How to Batch Reclassify Transactions in QuickBooks Online?

To get started with the procedure of reclassifying transactions, one has to ensure which transactions you wish to reclassify. A Profit and Loss report may help you to find such information. Once you detect the transactions, you can use the Reclassify tool so that you can move the transactions to another account. You can even change the classes too.

In the following details, we will show you each step to teach you how to batch reclassify transactions in QuickBooks Online by location and Profit & Loss report. These steps can also be performed in QuickBooks Online Advanced.

Batch Reclassify Transactions by Running Profit & Loss Report

  • Open the “QuickBooks Online company” of your client.
  • Then, choose the “Accountant Tools” option.
  • Here, you can click on the “Reclassify Transactions” tab.
  • Go to the “Account types” drop-down menu and choose the “Profit and Loss” option. This will show you the expense and income accounts. Alternatively, you can choose the “Balance Sheet” option. This will show the asset, equity, and liability accounts.
  • Move to the “Account list” and choose the account that has transactions you want to edit.
  • You can use class, type, supplier/customer, and edit filters.
  • By selecting the “accrual”, you can find all the paid or unpaid transactions. On the other hand, the “Cash” option will show you the paid transactions only.
  • Once done, hit the “Find Transactions” option.
  • Click on the checkbox for the transaction you wish to change.

Note: Before moving the transactions to Accounts payable or Accounts Receivable, be sure there is a supplier or customer in the required fields. Don’t skip the fields.

  • Click on the “Reclassify” option.
  • Choose the new account to which you want to move the transactions. You can use the “Change account to” drop-down menu.
  • If you want to select the new class then use the “Change class to” drop-down menu.
  • Hit the “Apply” button.

Tip: The Reclassify tool can also be used for the firm’s transactions in the QuickBooks Online Accountant version. All you have to be on the firm’s page, choose the Accounting Tools option, and click on the Reclassify Transactions.

Reclassify Transactions by using Location

  • Log in to the “QuickBooks Online company” of your client.
  • Then, navigate to the “Settings” option.
  • Click on the “Account and Settings” option.
  • Select the “Advanced” tab.
  • Now, click on the “Categories” option.
  • Click the “Edit” button.
  • Choose the “Track Locations” option.
  • Now, move to the “Location Label” drop-down menu to choose the “Location” option.
  • Press the “Save” button.

This is how you can use the location feature and after that, you can change the location as per the preference.

Types of Transactions You Can and Cannot Move

To move the transactions, the Reclassify Transactions tool can be used. However, there are a few types of transactions that you cannot move as they are tied to certain accounts. Let’s find out what all types of transactions you can and cannot move:

  • Users cannot change the payment account for expenses such as credit card or bank account.
  • You will not be able to change the class or account for inventory adjustments as they are connected to the asset and inventory shrinkage accounts.
  • Although users can change the cash memos, cheques, classes for invoices, bills with items on them, the accounts cannot be changed.
  • You cannot change the income account for income-related transactions. However, the expense account for billable expenses can be changed.
  • Besides that, you can easily manage the payroll transactions in QuickBooks Payroll.

To Wind Up!

If you want to move or reclassify any transaction or account, you can do it easily in QuickBooks. All you have to do is use the Reclassify Transactions tool. Here, we have shown you how to reclassify transactions in QuickBooks. The above guide can be followed for QuickBooks Desktop and QuickBooks Online. All you have to be aware of is the condition that which account cannot be moved.

Do you want to match the bank transactions or download American Express transactions? If so, make sure you go through the following guides before proceeding:

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