Tracking Income and Expenses From Separate Business Segments

The Classes feature in QuickBooks (QB) allows you to track income and expenses for separate segments of your business. These segments might be departments, business locations, profit centers, funds, phases of completion, or something else.

It is important to understand that classes should only be used to track one aspect of a business. Don't use classes to track income and expenses by both location and product line. (But this can be done using subclasses. Search the QB help file for more information on subclasses.) In other words, you classes must be of a similar type. Also, you should understand that class tracking does not allow you to segment the balance sheet. To maintain a separate balance sheet, you must maintain a separate company data file.

Class tracking allows you to track business segments that are independent of customers, jobs, and vendors without bloating the Chart of Accounts. Once you've turned on class tracking in your company data file, you can assign each transaction to both a class and an account.

First, you must turn on the class tracking feature in QB and enter the appropriate classes in the Class list. Go to Edit > Preferences > Accounting > Company Preferences, and check the box next to Use Class Tracking. The Prompt to Assign Classes checkbox will prompt users to enter a class when they are entering transactions.

To add items to the Class list, go to the Lists menu and choose Class List. Use the New option on the menu button to add a new class.