What are Classes in QuickBooks

What Are Classes?
QuickBooks allows users to create classes to classify income and expenses by department, business office or location, separate properties owned, or any other meaningful breakdown of a business. Because users can generate reports by class, the use of classes may be better than creating a large chart of accounts with separate subaccounts for each group.

For example:

A contractor might create a class for residential work and another class for commercial work and assign each transaction to one of those classes. Then, at the end of an accounting period, the contractor could create separate reports for the residential and commercial parts of the business.

A retail company could use classes to track income and expenses at each store location or to track income and expenses for each product line or department (e.g., garden, hardware, tools).

A restaurant could use classes to track income and expenses by restaurant location, profit centers (e.g., restaurant and bakery), or type of business (e.g., catering and restaurant).

Creating Classes
Before classes can be created and used, the preference to use classes must be enabled.

To enable Classes preference:

1. Choose "Preferences" from the "Edit" menu and select the "Accounting" icon from the list of icons that appear on the left side of the "Preferences" window.
2. Click the "Company Preferences" tab.
3. Check the "Use class tracking" box. We also suggest you check the "Prompt to assign classes" box to remind users to include a class when booking transactions.
4. Click "OK".

After the preference is enabled, create classes by choosing "Class List" from the "Lists" menu, selecting "New" from the "Class" button, and entering the class name. (If it is a subclass, check the box indicating it is a subclass and select the parent class.) Using classes is fairly straightforward--simply specify the appropriate class each time a transaction is entered in QuickBooks.