How to Use Class Tracking in QuickBooks?

Are you looking for a process to set up and utilize the class tracking feature in QuickBooks? Then this article […]

Are you looking for a process to set up and utilize the class tracking feature in QuickBooks? Then this article will be highly beneficial for you.

We will help you to move beyond your usual account-based tracking in QuickBooks and make you aware of one of the best features of QuickBooks, which is class tracking. We will also show you a customized route to monitor your expenses, classify shared expenses across several accounts, and manage the accounts for one-time plus occasional expenditures, which are not related to any specific account type.

It is quite easy to set up class-tracking with QuickBooks Desktop since it speeds up the entire procedure. One of the key benefits of class tracking is that it provides better control over expense categorization, which eventually makes sorting expenses smoother.

In this article, we will focus on how to set up and use class-tracking in QuickBooks and make the most of it. So make sure that you read the article till the end.

Before we begin, let us first let us learn what classes are and how they are tracked in QuickBooks.

What are Classes?

When classes are used in QuickBooks, together with an account or item, you can allocate a class to every transaction. Post that, it is possible to run a Profit and Loss report by class. Additionally, you can even filter reports such as Accounts Payable and Accounts Receivable by class.

As per QuickBooks’ own guide, you can allocate a class to several kinds of transactions comprising:

Sales ReceiptsCredit Card Charges
Statement ChargesRefund And Credits
EstimatesPurchase Orders
Sales Orders

What is Class Tracking in QuickBooks?

Class-tracking in QuickBooks enables you to categorize your expenses, income, sales receipt, bills, purchase order, and estimate into several categories. Such categories or classes can signify cost centers, departments, individual locations, or any other category that is valuable for your business.

How to Activate Class Tracking in QuickBooks Advanced and QuickBooks Online Plus?

Class tracking enables you to classify segments of your business with significant changes, like different product lines or store departments. This particular feature offers a more comprehensive understanding of every business segment like expenses, sales, profitability, etc. After this feature gets activated, you can allocate classes to several transactions.

Here are the detailed steps to activate class tracking, allowing you to classify your transactions by class. If you want to link classes with your particular employees, supervision will also be offered to allow class tracking for Online Payroll.

If you are not aware of class tracking, take a look at the following steps on class tracking on how to get it up and running.

Step 1: Allow Class Tracking

  • Go to Settings. Now select Account and Settings
  • Select Advanced. Now click the section for Categories to edit
  • Enable Track classes
  • If you want, you can enable the option, Warn me when a transaction is not allocated to a class.
  • In the section for Assign Classes, select either One for each row in a transaction or One for the entire transaction.
  • Press Save and then click Done

Note: Select One for the entire transaction if you are not required to mention a class for every product which is sold to any customer. It enables you to allocate a single class to the overall sales receipt or invoice, which eventually saves a lot of time.

This particular procedure adds a class column or field to your particular forms, allowing you to allocate a class to every transaction.

Step 2: Organize Your Class List

It is now possible to design and prepare your class list, to include classes that display various aspects of your particular business. Make sure you keep your classes simple for every understanding of your particular reports.

How to Allow Class Tracking for Online Payroll

In order to monitor payroll using classes, you must activate class tracking for your particular payroll transactions. Now you can allocate a singular class to every employee or separate classes to different employees.

  • Navigate to Settings. Now select Payroll Settings
  • In the section for Accounting, press on Edit
  • In the section for Class Tracking, choose Edit to enable it. Now you can finalize your class tracking process
  • Press Continue. Then click Done

Note: In case the Class Tracking section cannot be observed in the Accounting Preferences, make sure the class tracking feature is enabled. In case it is off, allow it and do as per the steps stated above. In case it is not on, you must disable it, log out, log back, and then re-enable class tracking.

  • Include a class for every employee or allocate one for all of them
  • To confirm your preferences, choose Continue and then click Done

How to Configure and Use Class Tracking in QuickBooks Desktop?

Class tracking allows you to evaluate financial reports depending on departments, individual properties, business locations, or any other crucial segment of your business. This particular feature enables focused observation of specific business sectors which are highly important.

Step 1: Enable Class Tracking

For Windows

  • Open your company file
  • Now go to the Edit menu option and select Preferences
  • Press on Accounting and then shift to the tab for Company Preferences
  • Allow the checkbox beside Use Class Tracking for Transactions
  • If you want a prompt when any class has not been allocated, allow the checkbox beside Prompt to allocate classes
  • Press OK and save the changes

For Mac

  • Go to the QuickBooks menu and select Preferences
  • In the section for Workflow, choose Transaction
  • Allow the Use Class Tracking checkbox. Now close the particular Transaction window in order to save the changes.

Step 3: Configure Class Categories for Accounts and Expenses

For Windows

  • Navigate to the Lists menu. Now choose Class List
  • From the drop-down menu for Class, choose New
  • Now add the name of the class
  • In case it is a subclass, choose the Subclass of checkbox and locate the class whose under it is
  • Press OK to add it

For Mac

  • Navigate to the Lists menu. Now choose Classes
  • Choose the plus icon in order to prepare a new class
  • In order to design a subclass, choose the checkbox along with the class it is under
  • Press OK and then prepare a class

How Class Tracking is different from other tools in QuickBooks?

It is quite obvious to confuse other categorization tools in QuickBooks with class tracking. Often class tracking is the only tool you require. However, in some scenarios, a different tool may be the best fit.

Here we have compared tracking in QuickBooks to Inventory Tracking, Types, and Locations.

Classes Vs. Projects

How do you determine which QuickBooks projects are appropriate to employ instead of classes? Projects are usually used for specific tasks, whereas classes are a means to divide transactions by department or product type, even though you may run Profit and Loss Reports for both classifications.

If your firm involves contracting, remodeling, or consulting, projects might be a more useful tool. You can then compare your earnings and out-of-pocket costs for each specific job. However, classes will most likely be a better option for owners of retail businesses.

Classes Tracking Vs. Inventory Tracking

Class tracking is not designed to be accessed for tracking specific products.

Class Tracking Vs. Locations

Within QuickBooks, class tracking and locations are extremely comparable. Actually, both features are located in the Settings menu under the “Categories” tab. The ability to choose a different class for each line item is the primary distinction between the two. On the other hand, an invoice, expense, or other transaction can only be specified for a single location.

Classes and locations can also be used one after another.

We end this article hoping that you have understood all that is important to know about how to set up and leverage the use of class tracking in QuickBooks Desktop, QuickBooks Online, and Advanced.

But, in case you still have any queries or if you think that the process is too complicated, you can simply give us a call. Our Dancing Numbers team will help you out in this matter and will guide you.

Frequently Asked Questions

Is it Possible to Allocate a Class to an Individual Line or Item in a Particular Transaction?

Yes. It is possible to allocate classes to specific lines in a particular transaction. It enables you to monitor expenses, income, or profit by class at a more comprehensive level.

Is it Possible to Run Reports by Class in QuickBooks?

Yes. QuickBooks enables you to run several reports by class like Balance Sheet by Class, Profit and Loss by Class, etc. Such reports can offer insights into how several segments of your business are doing.

Is it Possible to use Class Tracking for Job Costing in QuickBooks?

Even though class tracking can offer additional information on expenses and income, it’s not an alternative for job costing. Job costing monitors costs and revenue by job, not by category or class. But, you can access both features one after another to get more comprehensive insights.

What is the Difference Between Location Tracking and Class Tracking?

Location tracking and class tracking are both ways to categorize your business. Class tracking often shows cost centers, departments, or any segment you state. Location tracking generally shows physical locations such as offices or stores. It is possible to use both features together to get a comprehensive view of your particular business.

Is it Possible to use Class Tracking in QuickBooks to Monitor Projects?

Class tracking can be accessed to monitor projects, however, QuickBooks also provides a project tracking feature which may be more appropriate. Class tracking is considered to be general, while project tracking is ideally created to monitor expenses, income, and profit for individual projects.

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