Clients often ask us why and when they should use a “Class” on their invoices in QuickBooks. We advise clients to think of classes in QuickBooks as though they were departments within a company. This should be something you need to run a profit and loss report on. For example, in a store, certain areas are named according to the customer base around which they are centered. In a clothing store, you will encounter different departments for men, women, and children. You can go down up to 5 levels for classes as needed. So you can have Men as a header class with Shoes as a subclass.
In the same way that different departments make it easier to find what you’re looking for in a store, the class distinction within QuickBooks makes it easier to look at specific portions of your company’s invoices. In other words, using classes can provide an additional level of organization to your company’s invoices. It also enables you to run budgets and Profit & Loss statements according to class. This organization is important for analyzing and understanding the success of various portions of your company. Here are some good industry specific examples of class tracking that we have seen clients use:
1) Non Profit Organization uses Classes to track their Grants.
2) Ticket Broker for local bars and clubs uses departments like, sales, marketing, accounting, to run budgets for each of their internal departments
3) Subdivision of a University uses classes to separate their book and video education side from their classroom education