(Using Classes to Track Discretionary Expenses in QBO) - Part 2 - Adding Transactions to the Class

This section explains how to reduce manual work by automatically assigning the Discretionary class to future transactions.

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Video

Steps

Part 1: Update Recurring Transactions

Recurring transactions are expenses that post regularly (for example, rent, subscriptions, or phone bills).

1. Go to All Apps.

2. Select Accounting.

3. Click Recurring Transactions.

4. Review the list of recurring expenses that appear on your Profit & Loss.

5. Click Edit on a recurring transaction you want classified as discretionary.

6. Scroll to the Category details section.

7. In the Class dropdown, select Discretionary.

8. Click Save.

Going forward, this recurring expense will automatically post to the Discretionary class.

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Part 2: Create Rules to Automatically Assign the Discretionary Class

Rules are useful for flagging transactions that come in through bank feeds or integrations.

1. Go to Accounting.

2. Select Rules.

3. Click New Rule.

4. Enter a rule name (for example: Discretionary class rule).

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Configure the Rule Scope

1. For Transaction type, select Money out (expenses only).

2. Choose which Bank accounts or credit cards the rule applies to:

   • Select All accounts, or

   • Limit it to a specific account if you use one for discretionary spending.

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Set Rule Conditions

1. Under Conditions, choose:

   • Description → Contains

   • Enter a vendor name (for example: Amazon).

2. Change the condition logic from All to Any.

3. Add additional conditions as needed (for example: Walmart).

Important:

• Any = the rule applies if one condition matches

• All = the rule applies only if every condition matches

1. Use Test rule to confirm it works as expected.

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Define What the Rule Does

1. Under Actions, click Assign more.

2. Find Class and select Discretionary.

3. Leave all other fields unchanged.

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Final Rule Settings

1. Turn Auto-add OFF.

• This ensures transactions are still reviewed before posting.

1. Click Save.

2. Click Go to Rules to confirm the rule appears in your list.

Any transaction with the specified vendor names in the description will be automatically flagged as Discretionary.

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Part 3: Review and Monitor Discretionary Transactions

Even with automation, periodic review is recommended.

1. Go to Expenses.

2. Make sure the Class column is visible.

3. Click the Class column header:

   • Once to sort Discretionary transactions to the top

   • Again to reverse the order

4. Review:

   • Transactions marked as Discretionary to confirm they belong there

   • Transactions not marked Discretionary to ensure none were missed

Next Step: Using your discretionary class to filter reports