How to set up classes in QuickBooks

Class Tracking in QuickBooks

How to set up classes in QuickBooks

Expanding into class tracking gives you a flexible way to track individual expenditures, categorise mutual expenses through various accounts, and account for one-time and irregular expenses that aren’t usually associated with a specific account form. QuickBooks has an easy-to-use system for setting up class monitoring so that you can get started right away. The most significant advantage of class monitoring is that it gives you more control over how you categorise your expenditures, making it easier to sort them.

You can create classes in QuickBooks and allocate them to transactions. This helps you keep track of account balances by department, business office or venue, different assets you own, or any other practical business breakdown. Many business owners have specific business segments that they want to keep an eye on; you can identify these segments and monitor their associated account balances on invoices, bills, and other documents using the class tracking function. 

Companies with several departments or locations may use classes to record account balances for each department. For instance, if your restaurant has three areas, you might build a Midtown, Midtown, and Downtown class to monitor account balances by location. A farmer might establish a class for each of his or her businesses, such as Corn, Hogs, and Soybeans. The restaurant could generate separate reports for each location at the end of an accounting period. Similarly, the farmer might produce different reports for each company.

It takes some time to set up class monitoring, but it pays off in the long run. You get a good picture of your company’s spending and can see where your money is heading. It’s a lot easier to keep on top of your budget now that you have these details.

How to create classes in QuickBooks

To create classes in QuickBooks, follow these steps:

  • Open the QuickBooks application’s main tab.
  • Your company profile now includes a class tracking feature.
  • Then, from the menu bar at the top of the screen, pick your lists. To build class groups for your expenditures and accounts, go to “Class List.”
  • At the bottom of the list, click the arrow next to the “Class” button. To make a new class, click “New.” Outsourcing costs, technological solutions, travel costs, and other standard payments can all be accounted for using the class types you make.
  • The class’s name should be entered here. Put a check in the box next to “Sub-class” and fill in the text fields’ details if this class can be broken down further.
  • Select the class on the cost input form when entering the details to connect it with a particular expense. Classes can be associated with any QuickBooks entry, but they’re beneficial for bills and payroll costs.

How to set up classes in QuickBooks

In QuickBooks Desktop, you can use different classes to monitor account balances. Account balances can be tracked by department, business office or site, different assets, or any other realistic breakdown of your business with class tracking. This helps you to keep track of segments that you want to keep an eye on.

For example, if your restaurant has three locations, you can build classes for Uptown, Midtown, and Downtown to track account balances by venue. If you’re a farmer, you can make a class for each of your businesses: corn, hogs, and soybeans, for example. You may create different reports for the restaurant and the farm per position and enterprise at the end of an accounting period.

Step 1: Switch on class tracking in QuickBooks Desktop

  • Open the file for your company.
  • To access Preferences, go to the Edit menu and pick Preferences.
  • Go to the Company Preferences tab after selecting Accounting.>
  • Check the box that says, “Use class monitoring for transactions.”
  • Click the Prompt to assign classes checkbox if you want a reminder when you haven’t assigned a class yet.
  • Choose OK.

Switch on class tracking in Macintosh:

  • Pick Preferences from the QuickBooks menu.
  • Select Transactions from the Workflow section.
  • To save the changes, select the Use class monitoring checkbox and then close the Transactions window.

Before you move on to the next step, please note that classes can only be used for one group. If you’re using classes for departments, don’t use them for store locations. You may use the Industry Sample Classes as a reference.

Step 2: Build cost and account type categories in QuickBooks Desktop: 

  • Select the Class List option from the Lists menu.
  • Select New from the Class drop-down menu.
  • Fill in the class name.
  • If it’s a subclass, search the Subclass of the box and look for the class it belongs to.
  • To add it, pick OK.

Build cost and account type categories in the Mac version of QuickBooks: 

  • To access the Classes menu, go to the Lists menu and select Classes.
  • To build a new class, click the plus (+) button.
  • Fill in the name of the class you’d like to be in.
  • To render a subclass, check the checkbox and the class it belongs to.
  • To build a class, click OK.

Writer’s Note

QuickBooks Desktop software is filled with features and functions. That is one of the main reasons behind this software being so popular and regarded by all categories of bookkeepers and accountants. The whole idea of this blog is to help you understand class tracking in different versions of QuickBooks. I hope that this blog helps you understand the topic and was worth the time that you’ve spend while reading it.

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