Did you know that QuickBooks Online (QBO) has officially discontinued its Tags feature? As of May 2025, this tool – which allowed users to label and categorize transactions for enhanced tracking and reporting – is officially being replaced by the expanded use of Custom Fields.
It’s one of a few recent changes to the QuickBooks platform, and it has significant implications for your business. In this blog, we’ll walk you through everything you need to know about how to ensure your books stay up to date, despite changes to your QuickBooks Online program.
Understanding the Transition
Tags were introduced for QuickBooks users without access to more advanced categorization tools like Classes or Locations. Basically, they allowed you to assign labels to your transactions, which was a great help with detailed income and expense tracking.
So what does it mean for your business now that this feature is no longer available? After all, the removal of Tags affects anyone using QuickBooks Online, no matter your subscription level, and the phase out will be complete by May 2028. Firstly, any Tags used will now become read-only, so you can’t add new ones to your transactions. And by the end of the phase out, all historical tag data will be permanently removed from the platform. This means you’ll need another way to categorize transactions.
To help businesses with this, QuickBooks has expanded the functionality of Custom Fields across all QBO subscription tiers. However, there are variations to how many custom fields you can access, and this depends on your subscription.
- Simple Start users will have 1 custom field
- Essentials users can access 4 custom fields
- Plus subscribers get 4 custom fields
- Advanced subscriptions will allow you 12 custom fields
The transition timeline
This QuickBooks Online change followed a strict timeline. From February to March 2025, Intuit (the QuickBooks parent company) created a migration tool that allowed you to convert existing Tags into a dropdown Custom Field, preserving up to 100 tag options. Unfortunately, after May 2025, this tool won’t be available anymore, so if you need to migrate your data after this date, you’ll need to do so manually.
From March to April, Tags became read-only, and the creation of new Tags was disabled. And as of May this year, the feature has been disabled totally.
Why Are Tags Being Discontinued?
If you’re wondering why QuickBooks Online needed to make this change, you’re not alone. The decision has a few motivating factors, but mainly, it was made to improve user experience and efficiency.
It turns out that despite being available to all QBO subscribers, the Tag feature wasn’t used as much as QuickBooks developers had expected. In fact, a lot of businesses weren’t even aware of the feature. And others didn’t find it useful because of other existing categorization features like Classes or Locations. Also, because tags were not intended for all transaction types, they lacked robust reporting functionality.
So, to address these issues, users will now have expanded functionality of Custom Fields. These offer a more versatile and integrated approach to data categorization, and can be tailored to your specific business needs.
Introducing Custom Fields
Custom Fields allow you to add personalized data fields to your transactions. This means your finance team will have flexibility in tracking and reporting. They are applicable to a number of transaction forms, like invoices, sales receipts, expenses, and even purchase orders.
As mentioned above, the number of Custom Fields you’ll be able to add depends on your subscription type.
- Simple start: One Custom Field is available as a dropdown list for sales and expense forms
- Essentials: Four dropdown or text fields are available for sales and expense forms
- Plus: Four dropdown or text fields are available for sales and expense forms, as well as purchase orders
- Advanced: Twelve dropdown lists, text, number, and date fields are available for sales and expense forms, purchase orders, and additional entities like customers, vendors, and projects.
Migrating from Tags to Custom Fields
So how do you migrate from Tags to Custom Fields? Below are a few simple steps to ensure you can continue to accurately categorize your transactions.
To prepare, you’ll need to make sure that all the relevant transactions are appropriately tagged.
To do this:
- Go to Settings > Tags
- Select the option to “See all untagged transactions.”
- Run Tag reports by clicking on the “Run report” link next to each tag in the Tags list
- Save these reports as PDFs or export them to Excel for future reference
Then, you’ll need to manually migrate your data, unless you did so during the February-March phase-out date.
Remember that the migration process does not retroactively apply Custom Fields to your past transactions. Unlike Tags, Custom Fields currently do not support Profit and Loss reporting by custom field. As such, if you need help with these kinds of transactions, it’s best to reach out to a professional.
Are there Migration Limitations?
With the change to Custom Fields in QuickBooks Online, you must ensure that your team understands how to use Custom Fields correctly, or you could risk double or missing transactions, or reporting limitations. And that means you’ll need to do a clean-up.
For instance, while Tags allowed multiple labels on a single transaction, each Custom Field supports only one value per transaction. At the same time, Custom Fields can’t be applied directly from the banking feed. Instead, you’ll need to manually edit transactions after the import to add Custom Field data, which could cost you time and effort.
At the moment, QuickBooks Online doesn’t support bulk assignment of Custom Fields to multiple transactions. This means that each transaction must be edited individually to include Custom Field data. But don’t worry – QuickBooks has indicated that this functionality is on the way!
Best Practices for Using Custom Fields
To make the most of the Custom Fields feature, you should start by assessing your reporting needs. You may find that Custom Fields don’t meet your business’s reporting requirements, which means you’ll need to use alternative features, like the Classes and Projects features. Remember that Classes can be used to track different segments or departments within your business, while Projects allow detailed tracking of income and expenses related to specific jobs or initiatives.
Next, make sure you have clear goals for using the feature. Before creating Custom Fields, identify the specific data points crucial for your business operations. For instance, tracking “Sales Representative” or “Project Code” can provide valuable insights into your performance metrics.
And once you start using Custom Fields, it’s essential to maintain consistency. For example, consider establishing standardized naming conventions and data entry protocols for easier data analysis.
Despite the limitations, when used correctly, Custom Fields can significantly enhance your reporting capabilities in QBO, especially for users on the Advanced plan. For instance, you can use them to create customized reports, filter transactions and create pivot tables. But as always, if you’re unsure of functionality, it’s best to consult a professional, and take the stress out of your accounting software.
Need help? Reach out!
Fusion CPA’s team of QuickBooks experts can help you implement and use new features to the platform, migrate data, help with troubleshooting, and even handle your books for you.
So if you’d like to take your QuickBooks to the next level, schedule a free Discovery Call today!
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