Advanced Tracking: Using QuickBooks "Classes" for Deep Business Insights

Most business owners use their accounting software as a digital shoebox—a place to record what happened. But what if your software could tell you why it happened? If you are using QuickBooks Online Plus or Advanced, you have access to a powerful, often underutilized feature: Classes.

Bookkeeping “Classes” allow you to categorize transactions beyond just the standard accounts. For instance, while your Chart of Accounts tells you what you spent money on (e.g. "Office Supplies"), Classes tell you which part of your business spent it. 

How to Use Classes Effectively

Classes are perfect for tracking different segments of your business without cluttering your main ledger. Common ways to use them include:

• By Department: Tracking Sales vs. Marketing vs. Operations.

• By Location: Comparing the profitability of different branches.

• By Service Line: Seeing if your "Consulting" arm is more profitable than your "Product" arm.

• For Nonprofits: Tracking restricted vs. unrestricted funds to ensure grant and donor compliance.

Drive Data-Driven Growth with Segmented Financial Reporting

The real magic happens when you run a "Profit and Loss by Class" report. Instead of seeing one lump sum for your net income, you see a side-by-side comparison of your business units. This provides insight that enables you to make smarter decisions about where to invest your resources and where to cut back. For nonprofit leaders, this is an essential tool for audit-readiness and donor transparency, allowing you to prove exactly how specific grants were utilized.

Pro Tips for Class Tracking

To get the most out of this feature, keep your class structure simple. Too many sub-classes can make data entry cumbersome and reports difficult to read. Consistency is key—every transaction should be assigned to a class to ensure your "Unspecified" column remains at zero.

If you’re not sure how to set this up, Mind Your Biz can help. We don't just "do the books"; we provide the human support and insights you need to understand the story behind your numbers.