QuickBooks Online classes: how class tracking works & how to use it well.
Class tracking is the segment-tagging feature in QuickBooks Online Plus and Advanced: you tag each transaction to a class — a location, department, program, property, or product line — so you can run a profit-and-loss report by class and see how each segment of the business is really doing. It is powerful for multi-segment businesses, but only if it’s applied consistently: a file where some transactions are tagged and some aren’t produces segment reports that quietly mislead. Below: what the feature does, how to use it well, and when a ProAdvisor should design the class structure or back-tag a file for clean reporting.
QuickBooks Online class tracking lets you tag each transaction to a class — a segment of the business such as a location, department, program, property, or product line — so your reports can split results by segment instead of showing only one company-wide total.
With classes turned on, you can run a profit-and-loss by class and see which segment is actually profitable. It’s available in QuickBooks Online Plus and Advanced (not in Simple Start or Essentials). The one thing that makes or breaks it is consistency: a class is only as useful as the percentage of transactions that carry it. A half-tagged file produces misleading segment reports, because untagged amounts fall outside the segments and the numbers don’t add up to the story. Note: Locations is a related but separate tag — classes and locations are different fields.
What QuickBooks Online classes do.
The moving parts of the feature, in the order you meet them — from turning it on through the segment report that makes it worth the effort.
Part 01 · Turn class tracking on (Plus and Advanced)
Class tracking lives in QuickBooks Online Plus and Advanced — it isn’t in Simple Start or Essentials, so getting it may mean a plan upgrade. Once you’re on a tier that includes it, you switch it on in the account’s settings. From that point a Class field becomes available on your transactions; turning it on changes nothing about the accounting itself, it just opens the segment dimension.
Part 02 · Define a class list of business segments
You create the classes you want to track — a location, a department, a program, a property, a product line. These are the segments the business is run by, and they’re yours to define. The list can be flat or use sub-classes for a little structure, but the point is to name the few segments whose performance you actually want to see separately, not to model every possible split.
Part 03 · Tag each transaction with a class
With class tracking on, a Class field appears on invoices, expenses, bills, and other transactions, and you assign the right class as you enter each one. This is the daily discipline the whole feature rests on: a transaction without a class simply isn’t counted in any segment, so the value of the reports tracks directly with how completely transactions are tagged.
Part 04 · Run a profit-and-loss by class
The payoff is the profit-and-loss by class report, which breaks income and expenses out by segment so you see each one’s bottom line side by side. Instead of one company-wide total, you can tell which location, program, or product line is carrying the business and which is losing money — the question a single P&L can’t answer, which is the whole reason multi-segment businesses turn classes on.
Part 05 · Classes and Locations are separate tags
QuickBooks Online also offers a Locations tag, and it’s easy to confuse the two. Classes and locations are different fields: a business can use one, the other, or both — for instance classes for departments and locations for physical sites. Deciding which real-world dimension each field represents is a setup choice; using both well gives a two-way view, using them interchangeably just creates confusion.
The limit · What classes can’t fix: an inconsistent file
Class tracking reports faithfully on whatever is tagged — and only on what is tagged. It can’t infer the class of a transaction nobody labeled. So a file that’s half-tagged produces a profit-and-loss by class that looks precise but quietly leaves amounts out of the segments. The feature doesn’t enforce consistency for you; that discipline, or a back-tagging cleanup, is what makes the segment reports trustworthy.
How to use class tracking well.
Six steps, in order. The first three set the structure up; the rest are the habits that keep the segment reports true instead of letting a half-tagged file mislead you.
- 1
Confirm you’re on Plus or Advanced
Class tracking is only in QuickBooks Online Plus and Advanced, so first confirm your plan includes it; if you’re on Simple Start or Essentials you’ll need to upgrade, which is an Intuit subscription matter. Once you’re on a tier that has it, turn class tracking on in the account’s settings so the Class field becomes available on transactions.
- 2
Design a small, clear class list
Define the few segments you actually want to see separately — locations, departments, programs, properties, product lines — and keep the list short. A handful of well-chosen classes you’ll tag consistently beats a sprawling list nobody maintains. Name them plainly, and if you need structure, use a shallow set of sub-classes rather than many overlapping ones that blur the segments.
- 3
Decide classes vs. locations deliberately
If you’ll use both class and location tags, decide upfront which real-world dimension each represents — for example classes for departments and locations for physical sites — and document it. Treating the two fields as interchangeable is how files end up with the same split recorded two ways and reports that contradict each other. One clear convention, applied the same way every time.
- 4
Tag every transaction, every time
This is the step the whole feature lives or dies on. Assign a class to each transaction as you enter it — invoices, expenses, bills, journal entries — so nothing slips through untagged. The value of the segment reports tracks one-to-one with how completely the file is tagged; a habit of tagging everything is worth more than any amount of report formatting later.
- 5
Review the unclassified amounts regularly
Run the profit-and-loss by class periodically and look specifically at anything sitting in an unspecified or untagged bucket. That figure is your consistency gauge: if it’s large, the segment reports aren’t trustworthy yet. Catching and tagging strays as they appear keeps the file clean and stops a small gap from growing into a back-tagging project.
- 6
Run the P&L by class at every close
Make the profit-and-loss by class part of your month-end close, not a once-a-year curiosity. Reviewing it each period confirms the segments add up to the company total, surfaces tagging gaps while they’re small, and turns class tracking into a real management report rather than a field people fill in and never look at. Consistency in, insight out.
When a ProAdvisor should help.
Designing the class structure
Choosing the right classes — few enough to maintain, meaningful enough to manage by, and mapped cleanly against locations if both are used — takes judgment about how the business actually runs. Getting the structure right at the start is far cheaper than re-tagging a whole file after the segments turn out wrong, and it’s exactly the design work a ProAdvisor does before the first transaction is tagged.
Back-tagging a half-tagged file
When class tracking was turned on late, or applied inconsistently, the history is full of untagged transactions and the profit-and-loss by class doesn’t add up. Working back through that file — assigning the right class to past transactions without disturbing the accounting — is real cleanup work, and it’s what makes the segment reports trustworthy. This is where a ProAdvisor saves the most time and rescues the most reporting value.
When segment reporting drives decisions
If you’re using the profit-and-loss by class to decide which program to fund, which location to keep, or how to price a product line, the numbers have to be complete and correct — a half-tagged file leading a real decision is worse than no class tracking at all. That’s a file review and a fixed-fee scope to get the structure and the history clean, after which the reports can be trusted to steer the business.
A QuickBooks ProAdvisor designs class tracking inside your own books.
Turning classes on takes a minute; designing a class structure that actually answers the owner’s questions — and getting every transaction to carry the right class — is the real work. A QuickBooks ProAdvisor defines a small, clear class list that maps to the real segments of the business, sets the file up so new transactions are tagged as they’re entered, and back-tags the history that matters so the profit-and-loss by class reads true from the start. Where a file has been half-tagged and the segment reports don’t add up, we reconcile the structure and fill the gaps — against a written scope, inside your own QuickBooks Online file.
What people ask about QuickBooks Online classes.
How does class tracking work in QuickBooks Online?
You turn class tracking on (it’s in Plus and Advanced), define a list of classes that represent your business segments — locations, departments, programs, properties, product lines — and then tag each transaction with the right class as you enter it. With classes applied, you can run a profit-and-loss by class that breaks income and expenses out by segment, so you see how each part of the business is performing rather than one company-wide total.
Which QuickBooks Online plans have class tracking?
Class tracking is available in QuickBooks Online Plus and Advanced. It is not included in Simple Start or Essentials, so if you’re on a lower tier you’d need to upgrade to use it, which is an Intuit subscription matter. Once you’re on a plan that includes it, you switch it on in the account’s settings and the Class field becomes available on your transactions.
What is the difference between classes and locations?
They’re two separate tags. A class usually marks a segment like a department, program, or product line; a location usually marks where the activity happened. They’re different fields, and a business can use one, the other, or both — for example classes for departments and locations for physical sites. The two are easy to confuse, so it’s worth deciding upfront which real-world dimension each field represents and applying that the same way every time.
Why are my profit-and-loss-by-class numbers wrong or incomplete?
Almost always because the file isn’t tagged consistently. Class tracking only reports on transactions that carry a class — anything untagged falls outside the segments, so the report can look precise while leaving amounts out. Check the unclassified or unspecified bucket on the report; if it’s large, the fix is back-tagging the missing transactions, not reformatting the report. A half-tagged file produces misleading segment reports.
Can you set up class tracking in my QuickBooks Online file?
Yes — that’s operational work we do inside your own books: designing a clear class list that fits the business, turning class tracking on, setting the file up so new transactions are tagged, and back-tagging the history that matters so the profit-and-loss by class is true. We start with a free file review, then a focused design or back-tagging scope is one fixed fee, scoped in writing, or a broader bookkeeping cleanup ($1,200–$15,000+) if the books are already behind. A plan upgrade or Intuit account issue stays with Intuit.
Should I use classes, or just create separate accounts for each segment?
Classes are usually the better tool for tracking segments. Splitting the chart of accounts into a separate set for every location or program quickly becomes unwieldy and still won’t give you a clean side-by-side P&L. Classes keep one tidy chart of accounts and add a second dimension on top, so you can run a profit-and-loss by class across the same accounts. The trade-off is the discipline of tagging every transaction — which is the whole game with classes.