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QuickBooks Class Tracking: Setting Up Classes for Programs, Locations and Funds

Sherman Hsieh
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QuickBooks Class Tracking: Setting Up Classes for Programs, Locations and Funds

Last updated: October 16, 2026 · Independent guide · We do not sell rankings or coverage.

QuickBooks class tracking lets you label each transaction line with a segment, such as a program, department or fund, so you can run a Profit and Loss report for that segment without adding new accounts. It is available only in QuickBooks Online Plus and Advanced, and Plus caps you at 40 classes and locations combined. Below you will find when to use classes, locations or custom fields, sample class lists, the settings and reports, and the signs you have outgrown classes.

Before you start

Classes vs locations vs tags: which one to use

QuickBooks Online gives you three ways to label a transaction, and they behave differently. Intuit’s own explanation is that classes are assigned to each detail line, while a location applies to the entire transaction (Intuit blog, June 11, 2024).

Feature Assigned to Best for Main limitation
Class (Plus, Advanced) Each row or the whole transaction Programs, functions, departments, product lines No reliable Balance Sheet by class
Location (Plus, Advanced) The whole transaction Stores, offices, properties, nonprofit funds One location per transaction
Tags Transactions Existing users only Reporting ends after May 15, 2028
Custom fields (all plans) Sales and expense forms Reference data such as grant or PO number No Profit and Loss by custom field

Many older guides still recommend tags. Intuit says customers who never used tags lost the option by May 19, 2025, and that viewing tags and running tag reports end after May 15, 2028 (Intuit, custom fields and tagging, August 5, 2026). The same page says you cannot create a Profit and Loss by custom field, so custom fields cannot replace classes. Plus allows 4 custom fields and Advanced allows 12 (Intuit, add custom fields, August 5, 2026).

Step 1: Design the class list

Intuit advises keeping the class list simple so reports stay readable, and it allows subclasses nested up to five levels (Intuit, August 3, 2026). Give classes one job, or your reports will mix programs with grants.

Class list for a nonprofit (illustration)

Most small nonprofits use classes for function and program, because Form 990 Part IX requires 501(c)(3) and 501(c)(4) organizations to split expenses among program services, management and general, and fundraising (IRS, Form 990). The layout below rolls up to those three columns. All names are illustrative.

Parent class Subclasses Use it for
Program Services Youth Tutoring; Food Pantry; Housing Navigation Direct program costs and program revenue
Management and General None, or Finance; Board and Governance Accounting, audit, insurance, executive time
Fundraising Annual Gala; Grant Writing Event costs, donor software, development staff time
Shared Costs None Rent and utilities awaiting month-end allocation

At month end, move the Shared Costs balance to programs and functions with a journal entry; our guide to functional expense allocation shows the bases and the entries.

Because classes already carry the functional split, many nonprofits put funds (General Operating, a restricted grant, a capital campaign) in locations. Intuit supports a Balance Sheet with columns by location but says columns by class are not accurate (Intuit, run a balance sheet by class or location, September 8, 2026). The trade-off is that a bill shared by two funds must be entered as two transactions. For the net asset entries that sit behind fund tracking, see restricted funds accounting.

Class list for a multi-location business (illustration)

Intuit’s retail example uses locations for stores and classes for departments within each store (Intuit blog, June 11, 2024). For three branches selling equipment, service and parts:

  • Locations: Denver, Boulder, Fort Collins, Corporate (for head office costs you do not want to push into a branch).
  • Classes: Equipment Sales, Service, Parts, Overhead.

That is 8 entries against the Plus limit of 40. Building Denver Service, Denver Parts and so on as classes would use 12 entries and lose the branch Balance Sheet.

Step 2: Turn on class tracking

  1. Go to Settings > Account and settings > Advanced and find the Categories section.
  2. Turn on Track classes.
  3. In Assigned classes, choose One to each row in transaction or One to entire transaction.
  4. Select Save.

These steps are from Intuit, turn on class tracking, August 3, 2026. Choose per-row assignment if one bill or invoice can cover several programs or departments, which is normal for nonprofits.

Step 3: Make classes required (as far as QuickBooks allows)

In the same Categories section, check Warn me when a transaction isn’t assigned a class (Intuit, August 3, 2026). Intuit describes this option as a way to be notified about unclassified transactions and does not say it stops a user from saving, so you still need a review step.

As a control, run Profit and Loss by Class weekly and clear the “Not specified” column before you close the month. That is the label QuickBooks gives amounts not tied to a class (Intuit, September 8, 2026).

Step 4: Turn on location tracking (if you use it)

  1. Go to Settings > Account and settings > Advanced.
  2. In Categories, select the edit icon and turn on Track locations.
  3. Select Save, then Done.

Then add each location under Settings > All lists > Locations > New (Intuit, set up and use location tracking, August 4, 2026).

Step 5: Build the class list

  1. Go to Settings > All Lists > Classes and select New.
  2. Enter the name and select Save.
  3. For a subclass, check Is a sub-class and pick the parent class before saving.

To retire a class, open the dropdown next to Run report and choose Make inactive (reduces usage). Inactive classes keep their history and no longer count toward the plan limit (Intuit, August 3, 2026). On Plus, this is how you stay under 40.

Step 6: Assign classes on transactions and payroll

On any form under + Create, pick the class in the Class dropdown (whole transaction) or the Class column (per row). Bank downloads that match an existing transaction keep its class; others need one added (Intuit, track transactions by class, August 4, 2026).

For QuickBooks payroll, go to Settings > Payroll settings, edit the Accounting section, then edit Class Tracking. Use one class for everyone or a class per employee; the setting affects only new payroll transactions (Intuit, August 3, 2026). Staff who split time between programs need a monthly reallocation entry from timesheets.

Step 7: Run reports by class

Under Reports > Standard reports, Intuit lists Profit and Loss by Class, Sales by Class Summary, Sales by Class Detail and Purchases by Class Detail. For any other report, select Display and set Display columns by to Class (Intuit, run reports by class, August 5, 2026). Intuit’s US tagging page lists Sales by Class Detail and Sales by Location Detail as Advanced-only.

For budgets, go to Reports > Financial planning > Budgets, create a Profit and Loss budget, choose a subdivided budget and pick class or location. Run Budgets vs. Actuals from the budget’s Options dropdown (Intuit, create budgets, August 21, 2026).

Common mistakes and how to fix them

  • Building classes into the chart of accounts. Accounts such as “Rent, Food Pantry” duplicate the class and use up the 250-account cap on Plus. Merge them and move the detail to classes.
  • Using whole-transaction assignment when lines differ. Switch to per-row under Advanced > Categories and recode split transactions.
  • Expecting a Balance Sheet by class. Intuit says columns by class on the Balance Sheet are not accurate and that A/R and A/P land in “Not specified” (Intuit, September 8, 2026). If you need balances by segment, use locations or a different system.
  • Hitting the limit mid-year. Make finished projects inactive and count classes and locations together.

Limitations of native class tracking

Classes give you one line-level dimension and locations one transaction-level dimension. Anything else, such as grant or project phase, must live in subclasses, projects or custom fields that cannot drive a Profit and Loss. Intuit also notes that payments that cannot be split by location may leave A/R, A/P or payroll under “Not specified” unless you divide the transaction by location or post a journal entry.

Allocations are manual. None of the Intuit articles cited here describe automatic allocation of shared costs across classes, so teams prepare the entry in a spreadsheet.

Signs you have outgrown classes, and what companies add

  • You need more than two dimensions on the same line, for example program, fund and grant together.
  • Funders want balanced books per fund, and the location workaround creates too many split transactions.
  • You are near 40 classes and locations on Plus, and Advanced would not add dimensions.
  • Allocation and reclassification entries take longer than the rest of the close.

Some firms first add a spreadsheet or reporting tool for allocations. When the issue is the number of dimensions, the usual move is a system built on them. Intuit Enterprise Suite uses dimensions that nest up to five levels and can be shared across companies (Intuit, create and manage dimensions, September 2, 2026). Sage Intacct offers standard dimensions such as class, department, location and project, plus user-defined dimensions that may cost extra (Sage Intacct help, October 8, 2026; Sage sells the product). If NetSuite is the destination, our QuickBooks to NetSuite migration guide covers the rebuild.

How we researched this

We worked from Intuit’s US help articles for every menu path, limit and report name, and noted the “updated” date each page showed when we checked it in October 2026. We also read the top search results (Intuit’s blog, Accounting Department, SaasAnt) and added what they omit: plan limits, the tag retirement, the Balance Sheet by class limitation and sample class lists, which are illustrations.

Related guides

Frequently asked questions

Which QuickBooks Online plans have class tracking?

Only QuickBooks Online Plus and Advanced. Plus allows 40 classes and locations combined, and Advanced allows an unlimited number. Simple Start and Essentials have neither.

Can I make a class mandatory in QuickBooks Online?

Not strictly. Intuit describes Warn me when a transaction isn’t assigned a class as a notification, not a required field. Review the “Not specified” column on Profit and Loss by Class before each close.

Should a nonprofit use classes or locations for funds?

If classes already carry programs and functions, locations are the usual choice for funds, because QuickBooks Online can show a Balance Sheet by location but not an accurate one by class. The cost is that a bill shared between funds must be entered as separate transactions.

Can I still use tags instead of classes?

Only if your company already used tags. Intuit stopped offering tags to customers who had never used them by May 19, 2025, and tag viewing and reporting end after May 15, 2028.

Can I run a budget by class in QuickBooks Online?

Yes. Under Reports > Financial planning > Budgets, create a subdivided Profit and Loss budget by class or location, then run Budgets vs. Actuals from the budget’s Options dropdown.

Sources

Sherman Hsieh

CEO & Editor-in-Chief, Business-Software.com
Independent analysis of enterprise software — ERP, CRM and more
Sherman Hsieh is the founder, CEO, and editor-in-chief of Business-Software.com. He leads the site's independent, buyer-focused coverage of ERP, CRM, and other business systems, including vendor-neutral comparisons, pricing analysis, and implementation guidance. Before founding Business-Software.com, Sherman was an executive at Siebel ...

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