What limitation exists regarding the number of hierarchical levels of locations in QuickBooks Online?

In QuickBooks Online, the limitation regarding the number of hierarchical levels of locations that can be created allows for up to three levels. This means that businesses can structure their locations in a way that reflects their operational needs while still maintaining a manageable categorization system.

For example, a company might set up their locations by first categorizing them into regions, then branching out to specific states or areas within those regions, and finally specifying individual store locations. This three-tier system strikes a balance between detailed analysis and simplicity, allowing businesses to track and report on their performance by different dimensions while avoiding excessive complexity.

Understanding this limitation helps organizations plan their location strategy effectively, ensuring they can fully utilize the reporting capabilities of QuickBooks Online without running into system constraints. The other choices do not align with this policy, as they either suggest too few levels or imply no limits, which is not the case in QuickBooks Online.