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How to Use Class Tracking in QuickBooks?

Class Tracking in QuickBooks

QuickBooks Class Tracking is a robust feature designed to enhance the organization and categorization of financial data for businesses. With Class Tracking, users can assign classes or categories to various transactions, including income and expenses. This classification system offers a detailed and customizable way to organize financial activities.

By employing Class Tracking, businesses can analyze and generate reports based on specific criteria, providing a more insightful view of how different segments contribute to overall financial success. This feature simplifies the process of managing and understanding financial data, allowing for better decision-making and a clearer overview of the business’s financial health.

In this article, we will walk you through the procedure of using class tracking on Desktop and Online.

Class Tracking in QuickBooks

Class tracking is a valuable tool for businesses to monitor account balances based on different parameters like department, office, or location. This allows for a detailed analysis of financial data. For example, a restaurant with multiple locations can create classes for each, such as Uptown, Midtown, and Downtown, to effectively track account balances. Similarly, in agriculture, a farmer can use classes like corn, hogs, and soybeans to assess the financial performance of each enterprise.

At the end of an accounting period, businesses can generate separate reports for each class, offering a detailed view of financial data specific to locations or enterprises. This tracking and reporting enhance the precision of financial analysis, providing valuable insights into the performance of individual segments within overall operations. 

To break it down in points class tracking can be used to: 

  1. Track account balances by department, location, or other business segments
  2. Categorize shared expenses across multiple accounts
  3. Handle accounting for one-off expenses
  4. Run a profit and loss statement for a specific line of business

Things to Consider before Turning On Class Tracking

  1. To simplify your withholding tax process, set up the withholding tax account and item, only once. When charging off withholding tax in the future, use the existing item.
  1. Organize your business by creating classes based on your reporting preferences. Think about how you want to see your business segments in reports and set up classes accordingly. 
  1. Don’t forget to establish an “other” class for transactions that don’t fit into any defined category.

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Steps to Turn On Class Tracking on the QuickBooks Desktop

Follow the steps given below to turn on class tracking on the desktop:

For Windows

Step 1: Turn on class tracking

  1. Access your company file
  2. Click on the Edit menu and choose Preferences
  3. Within Preferences, select Accounting and go to the Company Preferences tab. 
  4. Check the box for “Use class tracking for transactions.” 
  5. If you wish to receive reminders for unassigned classes, also check the box for “Prompt to assign classes.” 
  6. Confirm your selections by clicking OK.

Step 2: Set up class categories for expenses and accounts

NOTE: Please ensure that you assign classes for only one category to maintain consistency. For instance, if you are using classes for departments, avoid using classes for store locations. The Sample classes by industry can serve as a helpful guide in making these distinctions.
  1. Open the Lists menu and choose Class List.
  2. From the Class ▼ drop-down menu, opt for New.
  3. Enter the desired class name.
  4. If it’s a subclass, check the Subclass of checkbox and specify the parent class.
  5. Click OK to add the class.

For Mac

Step 1: Turn on class tracking

  1. Visit the QuickBooks menu and click on Preferences.
  2. Within the Workflow section, choose Transactions.
  3. Check the box for Use class tracking, then close the Transactions window to save your changes.

Step 2: Set up class categories for expenses and accounts

  1. Open the Lists menu and choose Classes.
  2. Click on the plus + icon to initiate the creation of a new class.
  3. Input your desired class name.
  4. If you intend to create a subclass, mark the checkbox and specify the parent class.
  5. Select OK to finalize the creation of the class.
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Use Class Tracking for Desktop and Mac

You can assign a class to the following transactions:

Invoice
Sales receipt
Estimate
Sales order
Statement Charges
Refunds and credits
Check
Credit card charges
Bill
Purchase order
Paycheck

Steps to Turn On Class Tracking in the QuickBooks Online 

Step 1: Turn on class tracking

  1. Access Settings and choose Account and Settings.
  2. Go to Advanced, then select the Categories section for editing.
  3. Check the box for Track classes.
  4. Optionally, check the box for Warn me when a transaction isn’t assigned a class, ensuring clarity in reports.
  5. Under Assign classes, choose either One to entire transaction or One to each row in transaction.
  6. Click Save, then Done to confirm your settings.
Tips and tricks: Opt for “One to entire transaction” if you don’t need to assign a class for each product sold to a customer. This allows you to save time by assigning a single class to the entire invoice or sales receipt. This will add a class field or column on your forms, simplifying the process of assigning classes to transactions.

Step 2: Set up your class list

Take the time to set up your class list by creating classes that represent distinct parts of your business. Keep in mind the importance of simplicity—the clearer and more straightforward your classes are, the easier it becomes to comprehend your reports.

Here are the steps to set up classes:

  1. Open Settings and choose All Lists.
  2. Select Classes.
  3. Click on New and provide a name for the class.
  4. If you want to add a sub-class, choose “Is a sub-class” and select the main class. You can select up to five classes.
  5. Click Save to confirm your class setup.

Turn On Class Tracking for Online Payroll

To set up classes for payroll tracking, follow these steps:

  1. Open Settings and choose Payroll Settings.
  2. Under Preferences, select Accounting, or choose Preferences and then Accounting Preferences.
  3. In the Class Tracking section, click on Edit to enable it. Then, choose your preferred method for tracking classes.
  4. Click on Continue, then click on Done.
  5. Assign a class for each employee or use one class for all of them.
  6. Save your preferences by clicking OK, and then press OK again.
Note: If you can’t find the Classes section, select a checking account, and then choose Customize.

To track payroll using classes, enable class tracking for payroll transactions. Then, choose to assign either one class for all employees or different classes for each employee.

Here are the steps to set up class tracking for payroll:

  1. Open Settings and choose Payroll Settings.
  2. In the Accounting section, click Edit 
  3. In the Class Tracking section, click Edit to enable it. Choose your preferred method for tracking classes.
  4. Click Continue, then select Done.
  5. Create a class for each employee or assign a single class for all.
  6. Save your choices by selecting Continue, then Done.
Note: If you can’t see the Class Tracking section in Accounting Preferences, make sure that class tracking is enabled. If it’s turned off, switch it on and follow the steps again. If classes are already enabled, turn them off, sign out, log back in, and then enable classes again.

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Conclusion

QuickBooks Class Tracking is a powerful feature that enhances the organization and analysis of financial data for businesses. By allowing users to categorize transactions based on different parameters such as departments, locations, or specific projects, QuickBooks Class Tracking provides a tailored and detailed view of financial performance. This feature proves invaluable for businesses with diverse segments, enabling them to generate specific reports and gain insights into the profitability and efficiency of each class. The flexibility to assign classes to transactions simplifies the tracking process, offering businesses a comprehensive and user-friendly way to manage their financial data. Overall, QuickBooks Class Tracking is a key tool for businesses seeking precision and clarity in their financial reporting and decision-making processes.

If you need any help regarding QuickBooks class tracking reach out to our experts at +1-855-875-1223 for personal assistance.

Frequently Asked Questions

How do I use the class function in QuickBooks online?

1. Access Payroll Settings by going to Settings and selecting Payroll Settings. 
2. In Preferences, choose Accounting or select Preferences 
3. Then Accounting Preferences. 
4. Navigate to the Class Tracking section, and click Edit ✎ to enable it. 
5. Select your preferred method for tracking classes.

How do I run a class report in QuickBooks?

To generate a customized Profit & Loss by Class report:

1. Run the Profit & Loss by Class report.
2. Click on Customize Report, then navigate to the Filters tab.
3. From the Filter list, choose Class, then Multiple Classes. (For Mac users, tick the Class box, then select Selected classes from the class drop-down).
4. Pick only the Subclasses you want in the report (e.g., 1C, 2C, and 3C).
5. Click OK. The report will now include the Total column for Class 1, Class 2, and Class 3.
6. Export the report to Microsoft Excel or a similar program.
7. Remove the Class Total columns.
8. Recreate the TOTAL column as needed.

How do I use class and location in QuickBooks online?

Follow these steps to enable tracking of classes and locations in QuickBooks:

1. Click on the gear icon in the upper right corner.
2. Under YOUR COMPANY, select Account and Settings.
3. On the Account and Settings screen, click Advanced at the bottom of the left-side menu.
4. In the Categories section, ensure that Track classes and Track locations are both set to On.

What is the benefit of using class tracking in QuickBooks Online?

Class tracking is a feature that allows you to monitor account balances based on various categories such as department, business office, location, or any other meaningful breakdown in your business. This functionality enables you to keep a close eye on specific segments, providing a detailed breakdown of financial data for more focused analysis. Whether it’s by department, office, or any other relevant division, class tracking allows you to gain insights into and manage distinct segments of your business more effectively.

What’s the difference between category and class in QuickBooks?

Accounts primarily organize transactions into standard financial categories such as income, expenses, receivables, and payables. In contrast, classes in accounting software, like QuickBooks, offer a more flexible approach. They allow you to organize transactions into custom categories of your choosing, providing full control over the classification of data. This enables businesses to tailor their financial tracking to specific needs, such as organizing transactions by department, location, project, or any other meaningful breakdown for detailed analysis and reporting.

About The Author

Editorial Team

Editorial Team

At QAsolved, we are a team of skilled professionals dedicated to delivering unparalleled accounting and bookkeeping services. With backgrounds in finance and technology, our collaborative efforts focus on providing practical solutions and guidance. Our services are tailored for a range of businesses, covering advisory, CFO services, bookkeeping, and financial systems consulting.QAsolved is an award-winning consulting firm and Intuit’s #1 QuickBooks Reseller Partner. We offer comprehensive QuickBooks services, including consulting, integration, migration, maintenance, data conversion, training, and support, among other services. Over the years, we have assisted over 30K customers across various industries with their Intuit products.

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