• "What are ‘Classes’ in QuickBooks Online and how are they used?"

Resolution Steps

  1. In QuickBooks Online, Classes are a feature that allows businesses to categorize income and expenses by different segments of their operations.
  2. The purpose of using Classes is to gain deeper insight into the profitability and financial performance of specific areas within a business.
  3. Setting a Class does not replace the specific income account set for an item — it adds additional detail that helps identify which part of the business the transaction came from.
  4. Example use case:
    • The item “Quart of Oil” is assigned to the Income Account ‘Sales of Product Income’.
    • If it was invoiced from a service job, the marina could assign the Class ‘Service’. This transaction still impacts ‘Sales of Product Income’.
    • If it was sold over the counter, the marina could assign the Class ‘Counter Sales’. This also impacts ‘Sales of Product Income’.
  5. To enable and manage Classes in QuickBooks Online:
    • Go to Settings ⚙️ > Account and Settings > Advanced.
    • Find the Categories section and toggle on Track Classes.
    • Choose whether to assign classes per transaction or per line item.
    • Save changes.