As of May 16, QuickBooks Online (QBO) has officially sunset its “Tags” feature, a favorite among finance teams for organizing transactions beyond traditional accounting structures. For businesses that relied on Tags for customized filtering, budgeting by initiative, or enhanced reporting, the removal of this feature poses a clear challenge.

QuickBooks now encourages users to shift to native categorization tools like Classes, Locations, Customers, Vendors, and Custom Fields. These are powerful when used correctly, but they come with different rules and limitations. In this article, we’ll explore the top five alternatives to Tags, explain how to use them effectively, and guide you in rethinking your financial categorization strategy.

Key Takeaways

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1. QBO Tags are no longer available after May 16, 2025.
   
   
   

2. Classes and Locations are the closest native alternatives with structured segmentation.
   
   
   

3. Customers and Vendors offer flexible attribution paths when creatively applied.
   
   
   

4. Custom Fields provide unique customization options for advanced use cases.
   
   
   

5. Proper tool selection is essential to maintain clarity, auditability, and reporting efficiency.
   
   
   

Why Categorization Still Matters

Tags may be gone, but the need for granular tracking is more important than ever. Categorization helps finance teams understand which initiatives drive profitability, how costs break down across departments, and where to optimize. It also enables cleaner audits, better stakeholder transparency, and faster close processes.

Without Tags, companies must think more strategically about how to segment data using the tools that remain. When leveraged well, these alternatives can actually lead to more disciplined financial management.

Top 5 Alternatives to QBO Tags (And How to Use Them)

1. Classes (Most Versatile Replacement)

Classes let you track financial activity by segment—such as departments, product lines, or services. You can assign them at either the transaction or line-item level for precision.

Strengths:

• Works natively in QBO reporting

• Unlimited class creation

• Supports line-by-line tracking

Weakness:

• Only one class per line item; cannot assign multiple classes to a single transaction line

Ideal For: Teams looking to replicate Tag-like flexibility across business units or internal functions.

2. Locations (Ideal for Hierarchical Structure)

Locations are designed for tracking activity by physical or organizational units—like stores, branches, or business divisions. Each transaction is tied to one location.

Strengths:

• Excellent for region-based P&L views

• Simplifies segmented financial statements

• Easy to implement

Weakness:

• Limited to one location per transaction, which may restrict granularity
  
  
  

Ideal For: Multi-site companies, franchises, or nonprofits with chapter-based operations.

3. Customers (Repurpose for Initiative-Based Reporting)

Although meant for receivables, Customers can also be used creatively to track revenue and costs tied to specific projects, campaigns, or events.

Strengths:

• Enables revenue/cost attribution

• Highly filterable in reports

• Useful for tracking grant or client-specific work

Weakness:

• Cannot be used to track internal teams or departments, and not available in key financial reports like P&L by Customer

Ideal For: Service businesses, grant-funded nonprofits, or agencies managing multiple clients.

4. Vendors (Track Spending by Source or Type)

Much like Customers, Vendors can be repurposed for internal analysis. Some teams use Vendors to track initiative-based expenses or categorize external partners.

Strengths:

• Supports AP-level reporting

• Good for expense attribution

• Offers filtering across various spend types

Weakness:

• Vendor data cannot be grouped or subtotaled in core financial reports, limiting its use for internal cost allocation

Ideal For: Teams needing visibility into spending categories, contractors, or campaign-related suppliers.

5. Custom Fields (Highly Flexible Categorization)

Custom Fields let you define your own fields on transactions—ideal for tracking things like approval status, program name, or internal IDs.

Strengths:

• Highly customizable

• Supports multi-purpose tagging

• Can be text, date, or list-based fields

Weaknesses:

• Custom Fields are not supported in core financial reports like Profit & Loss or Balance Sheet, and cannot be used for consolidated or multi-entity reporting inside QBO

• Limited amount available per QBO File

Ideal For: Teams needing visibility into spending categories, contractors, or campaign-related suppliers.

Categorization Options Comparison Table

How to Choose the Right Categorization Method

Your best approach depends on your structure and reporting needs. Use Classes for internal departments, Locations for business units, and Customers/Vendors for attribution models. Custom Fields work well when you need flexibility for niche tracking.

FAQs

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Q1: Why did QuickBooks remove Tags?
Tags were sunset as part of Intuit’s broader push to streamline core functionality and reduce feature redundancy.

Q2: Are existing Tags still accessible in QBO?
Past transactions with Tags remain intact, but you cannot apply new Tags going forward.

Q3: What’s the closest native tool to Tags?
Classes offer the most similar functionality, with customizable labels and reporting capabilities.

Q4: Can I use more than one categorization tool per transaction?
Yes, you can combine tools like Class + Customer + Vendor for multifaceted tracking.

Q5: Will QBO enhance these categorization tools in the future?
Intuit has hinted at expanding the capabilities of existing tools like Classes and Custom Fields, but timelines remain unclear.

Current Events in Financial Software

As highlighted by reports, Intuit explained that the removal of Tags was driven by “aims to streamline reporting and tracking features for users.” This trend is consistent across financial platforms, as providers simplify their systems to support faster data processing and broader integrations.

According to Forrester Research, nearly 68% of mid-market finance teams are now seeking systems that reduce complexity and improve manual processes - a perfect time to reevaluate your approach to categorization.

Conclusion

QBO’s sunsetting of Tags marks the end of an era, but not the end of flexible financial tracking. By adopting the right mix of Classes, Locations, Customers, Vendors, and Custom Fields, finance teams can achieve even more structured, scalable, and insightful reporting.

LiveFlow offers a detailed overview of Class and Locations for users that are looking for more information. If you're looking to elevate your financial reporting with real-time visibility and customizable dashboards built on top of these categorization tools, then Book a Demo with LiveFlow today.