United States
Staffed with 100% US Employees

Using QuickBooks Class Tracking to Optimize Business Performance

November 20, 2013 by Ed Becker

Is there an important segment of your business that requires special attention? QuickBooks class tracking makes it easy to categorize transactions based on your own custom criteria. For example, a local restaurant chain can use class tracking to analyze the profit/loss at each location. The report could be further refined to track the profit margin of each menu item. Class tracking is a powerful tool that can help business owners create robust internal financial reports.

Getting Started with Class Tracking

Class tracking was implemented into QuickBooks to provide users with a customizable tool for internal financial reporting. As a general rule of thumb, it should be used to single-out areas of your business that require close monitoring. Follow these three easy steps to get started with class tracking:

Class Tracking

  • Step 1: Determine which segments of the business you would like to see separated, such as departments, product types, locations, etc.
  • Step 2: Turn on class tracking under the QuickBooks account preferences.
  • Step 3: Create a new class for the segment of the business you would like to track.

All transactions will now contain a new field to select the appropriate class.

After the class has been assigned to individual transactions, it will be able to generate its own specific financial reports. Great, but how can class data optimize business performance?

Optimizing Marketing Expenditures

Gauging the return on investment of a marketing campaign is rarely a straightforward task. Class tracking makes marketing analysis far easier from an accounting standpoint. A common strategy is to organize marketing transactions into unique classes, such as website, print media, trade shows, and radio. Instead of just looking at your total marketing spend each month, your custom classes will provide a far more detailed breakdown of marketing expenses. Each class can be independently analyzed to provide a general snapshot of ROI. This data can help managers allocate funds to marketing projects will provide the greatest value.

Analyzing Management Performance

Virtually all businesses rely heavily on the competence of their management team. Law and consultancy firms can use class tracking to monitor transactions related to individual employees or partners. By simply creating a custom class based on the employee’s name, it will be possible track their contribution to the company. Businesses with multiple locations can use this same principle to measure the overall financial performance of each location. These hard numbers are extremely useful when creating goals and rewards for managers. QuickBooks class tracking provides an excellent way to gain a deeper insight into the strengths and weaknesses of your management team.

Identifying Areas of Wasteful Spending

As a business grows in complexity, so does the potential for wasteful spending. QuickBooks class tracking offers an effective internal control to quickly identify areas of unnecessary spending. Try creating a unique class for every department within your company, such as sales, administrative, and customer service. Now you will have the ability to see how much each department contributes to your expense accounts. If you find that the sales department spends 5 times more on office supplies, you can investigate the cause of the this anomaly.

Final Thoughts


Class tracking will make transaction entry more tedious in QuickBooks, but the analytic benefits often outweigh the drawbacks. You will need to decide if a couple extra seconds entering every transaction is worth having customized financial statements. When used diligently, class tracking provides QuickBooks users with a powerful method to measure financial performance.

Need help deciding what to consider a “class” in QuickBooks or with the technical setup? Check out our QuickBooks consulting service.

Related Posts