To turn on classes in QuickBooks Online, go to Settings (the gear icon), select Account and Settings, choose Advanced, then select Categories and toggle on Track Classes. The whole process takes about 30 seconds, but you need a QuickBooks Online Plus or Advanced subscription to access the feature.
Step-by-Step: Enable Class Tracking
Here’s the exact path to follow:
- Sign in to QuickBooks Online.
- Click the gear icon (Settings) in the upper right.
- Select Account and Settings.
- Click Advanced in the left sidebar.
- Find the Categories section.
- Toggle on Track Classes.
- Click Save, then Done.
Once you flip this toggle, a Class field appears on your transactions, invoices, expenses, and other forms. You can start assigning classes immediately.
Which Plans Include Classes
Class tracking is only available on QuickBooks Online Plus and QuickBooks Online Advanced. If you’re on Simple Start or Essentials, you won’t see the Track Classes toggle in your settings at all. You’d need to upgrade your plan before the option appears.
The two plans also differ in capacity. QuickBooks Online Plus allows 40 combined classes and locations. QuickBooks Online Advanced gives you unlimited classes and locations. If you run a business with many departments, properties, or revenue streams, that 40-item cap on Plus can fill up quickly, especially if you’re also using location tracking, since both count toward the same limit.
What Classes Are For
Classes let you tag transactions with a custom label so you can slice your financial data in ways your chart of accounts doesn’t. A common use is tracking profitability by department, product line, store location, or business segment. For example, a restaurant group with three locations might create a class for each restaurant. Every sale, food purchase, and payroll entry gets tagged with the right location, and the owner can then pull a profit and loss report broken out by restaurant.
Classes are flexible. You define the categories yourself, and they can represent whatever grouping makes sense for your business: grant funding sources for a nonprofit, individual rental properties for a landlord, or service lines for a consulting firm.
Assigning Classes to Transactions
After you turn on class tracking, you’ll see a Class dropdown on invoices, expenses, checks, journal entries, and other transaction forms. For new transactions, just pick the right class from the dropdown as you fill out the form.
For transactions with multiple line items that belong to different classes, you can assign a class to each line individually. This is useful when a single bill covers expenses for two departments, for instance. Each line item gets its own class tag, and your reports will split the amounts accordingly.
For bank feed transactions that you’re reviewing and categorizing, click into the transaction and use the split feature to assign a class. If most of your transactions fall into one class, you can set up bank rules that automatically apply the right class when transactions match your criteria, saving you from tagging each one manually.
Running Reports by Class
The real payoff of class tracking shows up in your reports. Once you’ve been tagging transactions, QuickBooks Online offers several class-specific reports:
- Profit and Loss by Class breaks out your income, expenses, and net income side by side for each class. This is the report most people enable classes to get.
- Sales by Class Summary groups your total sales by class.
- Sales by Class Detail shows individual transactions grouped by class, including date, product or service, quantity, rate, and amount.
- Purchases by Class Detail groups your purchase transactions by class.
Beyond these dedicated reports, you can customize many standard reports to filter or group by class. Open any report, click Customize at the top, and look for class in the grouping or filter options. An expenses-by-vendor report grouped by class, for example, shows you exactly what each department is spending with each vendor.
Tips for Setting Up Your Classes
Keep your class list short and purposeful. Every class you create is another tag your team has to remember to apply, and untagged transactions create an “unclassified” bucket that muddies your reports. Before building out a long list, decide what single question you want classes to answer. If it’s “how is each department performing,” your classes are your departments and nothing else.
If you need to track two dimensions, say both department and location, use classes for one and the location tracking feature for the other. Location tracking is a separate toggle in the same Categories section of your settings. Turning on both gives you two independent tags per transaction, so you can run a profit and loss report by department and then filter it further by location.
Start assigning classes consistently from day one. Going back to tag hundreds of older transactions is tedious, and gaps in your data make class-based reports unreliable. If you have team members entering transactions, make sure they understand which class to choose, or set up rules that handle it automatically.