Using Classes in QuickBooks

The class feature in QuickBooks Online can be a valuable tool if used properly.

However, I feel that class tracking is one of the most underutilized tools in QuickBooks.

This feature is not used more often because the general QuickBooks user may not understand what it is or how it can be used to benefit their business. 

The class tracking feature is used to track different segments of a business. 

Businesses with multiple locations, different departments, or different revenue streams can use class tracking in different ways. 

The best use of class tracking that I have seen is to track sources of income.

Each time the business makes money, that particular transaction is assigned a class that references how the money came into the business. It could be a referral, an inbound lead, an internet search, or a networking event—whatever makes the most sense for the business. 

Then, at any point in time, the business can run a report showing the income source. The level of detail within the class list is up to the business owner or QuickBooks user.

To turn on the class feature within QuickBooks Online:

1. Click on the Gear icon in the top corner of the screen
2. Under the section Your Company, click on Account and Settings
3. Select Advanced and edit the Categories section
4. Turn on the Track Classes, and you are ready to start using the feature

The list of classes can be found by clicking on the Gear icon and selecting Lists. Here, you see Classes and other lists, such as your chart of accounts and payment methods.

The class feature in QuickBooks is certainly not useful for every business. However, those who can use class tracking may find it to be one of the more valuable tools that QuickBooks offers.