Divisions vs. Class in QuickBooks
The ability to track by division and by class in QuickBooks provides owners and operators with valuable insights as to what areas of their business are most profitable and which areas are not.
However, the difference between what is a division and what is a class can be confusing for bookkeepers and business owners alike. As such, the features often get underutilized or even completely overlooked.
A general way to define the difference between a division and a class is to say that a division represents a broader category, whereas classes are sub-categories which drill deeper into any division.
Using a construction business for an example, store locations would make good divisions. Sub-categories or classes within the separate store divisions could be residential, commercial or new construction.
Classes further allow bills and invoices to have separate class designations on each line item. Particularly in a construction business, tracking by class, using a job number on each line item is a valuable way to analyze a job’s profitability.
Contact Chris McGee at (360) 303-5798 if you have any questions or if you’d like to learn more about setting up divisions or tracking by class in QuickBooks.
ProFound Impact is a division of Business Support Services Northwest, LLC. Chris McGee has been a Business Coach for over 20 years and specializes in (cloud based) Accounting Software such as QuickBooks and FreshBooks. Based in Bellingham, WA and proudly serving onsite or remotely throughout Whatcom, Skagit, Island, San Juan, Snohomish and North King Counties as well as OR, ID and AK.