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How to Add Class in QuickBooks

Add Class in Quickbooks

Managing business finances can quickly become overwhelming if everything is lumped into one general category. That’s where Classes in QuickBooks come in. Classes allow you to track income and expenses by department, location, project, or any category that matters to your business.

In this in-depth guide, you’ll learn how to add a class in QuickBooks, why classes are important, and how to use them effectively to gain better financial insights.

 

📌 Table of Contents

  1. What Is a Class in QuickBooks?
  2. Why Use Classes in QuickBooks?
  3. Class Tracking vs Locations: What’s the Difference?
  4. Which QuickBooks Versions Support Class Tracking?
  5. How to Turn On Class Tracking in QuickBooks
  6. How to Add a Class in QuickBooks Online
  7. How to Add a Class in QuickBooks Desktop
  8. How to Assign Classes to Transactions
  9. How to Add Sub-Classes in QuickBooks
  10. How to Run Class Reports in QuickBooks
  11. Common Mistakes to Avoid When Using Classes
  12. Best Practices for Class Tracking
  13. FAQs About Classes in QuickBooks
  14. Final Thoughts

    1. What Is a Class in QuickBooks?

 

A Class in QuickBooks is a way to categorize transactions beyond standard accounts. While accounts tell you what the money was spent on, classes tell you where or why it was spent.

For example:

  • Departments (Sales, Marketing, HR)
  • Business locations (New York, California, Texas)
  • Projects or service lines
  • Events or product categories

Classes help you break down your financial data in a way that actually matches how your business operates.

 

  1. Why Use Classes in QuickBooks?

 

Using classes gives you clarity, control, and confidence in your financial reports.

Key Benefits:

  • Track profitability by department or location
  • Identify which areas generate the most revenue
  • Compare expenses across teams or projects
  • Create cleaner and more detailed reports
  • Make smarter business decisions

Instead of guessing, classes let you see exactly where your money is going.

 

  1. Class Tracking vs Locations: What’s the Difference?

 

QuickBooks offers both Class Tracking and Location Tracking, and many users get confused.

Feature

Best Used For

Classes

Departments, services, projects

Locations

Physical business locations

 

💡 More Tips:- 

How Can I Contact QuickBooks Online Support?

 

  1. Which QuickBooks Versions Support Class Tracking?

 

Class tracking is available in:

❌ Not available in QuickBooks Online Simple Start or Essentials

 

    1. How to Turn On Class Tracking in QuickBooks

 

Before adding classes, you must enable the feature.

Steps to Enable Class Tracking:

  1. Log in to QuickBooks
  2. Go to Settings (⚙️)
  3. Select Expenses
  4. Click the Advanced tab
  5. Turn on Track Classes
  6. Choose:
    • One class per transaction OR
    • One class per row
  7. Click Save, then Done

Once enabled, you’re ready to create classes.

 

    1. How to Add a Class in QuickBooks Online

 

Follow these simple steps to add a class in QuickBooks Online:

Step-by-Step Instructions:

  1. Click Settings (⚙️)
  2. Select All Lists
  3. Click Classes
  4. Select New
  5. Enter the Class Name
  6. (Optional) Assign a Parent Class
  7. Click Save

✅ Your class is now ready to use.

 

  1. How to Add a Class in QuickBooks Desktop

 

If you’re using QuickBooks Desktop, the process is slightly different.

Steps for QuickBooks Desktop:

  1. Go to the Lists menu
  2. Select Class List
  3. Click Class at the bottom
  4. Choose New
  5. Enter the class name
  6. (Optional) Create a sub-class
  7. Click OK

That’s it! Your class has been successfully added.

 

    1. How to Assign Classes to Transactions

 

Adding classes is only useful if you apply them correctly.

How to Assign a Class:

  • Open a transaction (invoice, bill, expense, or journal entry)
  • Select the appropriate Class from the dropdown
  • Save the transaction

If you enabled one class per row, you can assign different classes to each line item.

 

    1. How to Add Sub-Classes in QuickBooks

 

Sub-classes allow for more detailed tracking.

Example:

  • Parent Class: Marketing
    • Sub-Class: Digital Ads
    • Sub-Class: Events
    • Sub-Class: Content Marketing

How to Create a Sub-Class:

  1. Add a new class
  2. Check Is Sub-Class
  3. Select the parent class
  4. Save

This structure is perfect for businesses with complex operations.

 

    1. How to Run Class Reports in QuickBooks

 

Once your classes are set up, you can generate powerful reports.

 

Most Popular Class Reports:

  • Profit and Loss by Class
  • Balance Sheet by Class
  • Expense Reports by Class

 

How to Run a Class Report:

  1. Go to Reports
  2. Search for Profit and Loss by Class
  3. Customize the date range
  4. Review or export the report

These reports help you understand which parts of your business are truly profitable.

 

    1. Common Mistakes to Avoid When Using Classes

 

Avoid these common errors to keep your reports accurate:

❌ Too many unnecessary classes
❌ Inconsistent class naming
❌ Forgetting to assign classes
❌ Mixing classes and chart of accounts
❌ Not reviewing class reports regularly

Keeping things simple and consistent is key.

 

    1. Best Practices for Class Tracking

 

✔ Plan your class structure before creating classes
✔ Use clear and descriptive names
✔ Limit the number of classes
✔ Train your team to assign classes correctly
✔ Review reports monthly

Good class management saves time and prevents confusion later.

 

    1. FAQs About Classes in QuickBooks

 

Q: Can I delete a class?

Yes, but only if it’s not used in any transaction.

 

Q: Can I rename a class?

Yes, renaming won’t affect past transactions.

 

Q: Can I use both classes and locations?

Absolutely. Many businesses do.

 

Q: Do classes affect taxes?

No, they are for internal reporting only.

 

  1. Final Thoughts

 

Learning how to add a class in QuickBooks is one of the smartest steps you can take to improve financial clarity. Whether you’re tracking departments, projects, or locations, classes help you see the full picture of your business performance.

When used correctly, class tracking turns QuickBooks into a powerful financial analysis tool—not just basic bookkeeping software.

If you want better insights, better decisions, and better growth, start using Classes in QuickBooks today.

 

 

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