Leveraging QuickBooks Online Tags for Advanced Reporting

Before You Start

This guide assumes you have a QuickBooks Online Plus or Advanced subscription. Tags are not available in Simple Start or Essentials.

Overview

25 min

Setup Time

Intermediate

Difficulty

Flexible

Reporting

What You’ll Learn

How to enable and set up Tags in QuickBooks Online
Best practices for creating Tag Groups and individual Tags
Generating custom, multi-dimensional reports using Tags
Comparing Tags with Classes and Locations for optimal use cases

1. Understanding Tags in QBO

QuickBooks Online Tags provide a flexible way to track and categorize financial data without altering your Chart of Accounts. They allow for multi-dimensional reporting beyond standard Classes and Locations.

Key Benefits of Tags

Granular insights into specific projects, departments, or campaigns
Flexible reporting across multiple criteria simultaneously
Simplified Chart of Accounts by reducing the need for numerous sub-accounts
Multi-dimensional tracking for revenue, expenses, and more

Current Limitations

Not directly supported for payroll transactions
Limited integration with some third-party apps
No automatic reminders or rules for tag application

2. Tags vs. Classes & Locations

You have powerful options for segmenting your data. Choosing the right tool depends on your needs.

Tags: Flexible and Multi-Dimensional

Tags are ideal for ad-hoc, multi-dimensional tracking.

Pros:

Multi-dimensional tracking.
No hierarchy enforced.
Easy to set up and manage.

Cons:

Not for legal entity tracking.
No balance sheet impact.
Manual application often.

Classes & Locations: Structured and Hierarchical

These are best for statutory reporting or clear business units.

Expert Tip: Tags are excellent for detailed, non-hierarchical data segmentation like marketing campaigns, product lines within a department, or specific project phases. Use Classes for distinct business units and Locations for physical sites.

3. Enabling Tags in QuickBooks Online

Tags are typically enabled by default in Plus and Advanced subscriptions. If you don’t see them, follow these steps:

Go to Gear Icon > Account and Settings.
Select Advanced.
Under Categories, find Tags and ensure it’s On.

Here is a sample JSON structure representing a transaction that might include tags.

{
  "transaction_id": "TXN-98765",
  "date": "2025-01-15",
  "account": "Sales Revenue",
  "amount": 500.00,
  "description": "Website Design Project",
  "tags": [
    {"group": "Project Type", "tag": "Web Design"},
    {"group": "Client Segment", "tag": "Small Business"},
    {"group": "Marketing Channel", "tag": "Referral"}
  ]
}

4. Creating Tag Groups and Tags

1
Navigate to Tags
In QBO, go to the left navigation bar, click on Bookmarks or All Lists (depending on your view), and select Tags. Alternatively, use the Gear Icon > All Lists > Tags.
2
Create a Tag Group
Click New, then choose Tag group. Give your group a meaningful name (e.g., “Project Type”, “Marketing Campaign”, “Region”). This organizes related tags.
3
Add Tags to the Group
Within your newly created Tag Group, click Add tag. Enter individual tags (e.g., “Website Redesign”, “Social Media Ad”, “NYC”). You can add up to 300 tags across 40 groups.

Important Note: Tag Assignment

Tags are assigned to individual line items on transactions, not the entire transaction header. This allows for granular tracking within a single invoice or expense.

5. Reporting with Tags

Advanced Reporting Checklist

Run a Profit & Loss by Tag Group (Reports > Business Overview > Profit and Loss > Customize > Group by Tag Group)
Filter other reports (e.g., Transaction List by Date) by specific Tags to drill down into details
Analyze budget vs. actuals with Tags by creating budgets for specific Tag Groups
Export reports to Excel for further custom analysis and pivot tables using your Tag data

Need Help?

Unlock Deeper Insights

Struggling to get the most out of QBO Tags for your unique business needs? Our experts can help design and implement a custom tagging strategy.