(Using Classes to Track Discretionary Expenses in QBO) - Part 3 - Using Class to Filter Reports

This section explains how to use the Discretionary class to either isolate or exclude discretionary expenses in your financial reports.

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Option 1: View Discretionary Expenses Separately (Profit & Loss by Class)

This option is useful if you want to clearly see discretionary vs. non-discretionary expenses side by side:

1. Go to Reports.

2. Open Standard Reports.

3. Under Business Overview, select Profit and Loss by Class.

4. Set the date range to the period you want to review (for example, year-to-date or all dates).

How to read this report:

• The Discretionary column shows all expenses assigned to the Discretionary class.

• The Not Specified column represents non-discretionary (business) expenses.

• The Total column shows combined results.

This view is ideal for reviewing discretionary spending without removing it from the financials.

Option 2: Exclude Discretionary Expenses from the Profit & Loss

This option is useful if you want a Profit & Loss report that reflects only core business expenses.

1. Click Customize to open the customization panel on any standard report.

2. In the Filter section:

   • Select Class from the first dropdown.

   • Select Does not equal from the second dropdown.

   • Select Discretionary from the third dropdown.

3. Apply the filter.

Result:

• All discretionary expenses are removed from the report.

• The Profit & Loss now reflects only non-discretionary, business-related expenses.

• Columns can now be used for months, quarters, or other reporting formats instead of class.

When to Use Each Approach

• Profit & Loss by Class
  Use this to analyze discretionary spending alongside core business expenses.

• Filtered Profit & Loss (excluding Discretionary)
  Use this for cleaner financial reporting, lender reviews, valuations, or internal performance analysis.